Over the weekend I was able to read a “leaked” copy of the proposed Repeal & Replace legislation that has been referred to a House Committee to be reviewed. There were a few things that stood out to me.
FIRST: The proposed legislation does not appear to be a full repeal of Obamacare but a partial repeal of some of the most objectionable provisions of Obamacare, including, but not limited to, the Individual Mandate and Medicaid Expansion.
SECOND: Rather than retaining regulatory rights over health insurance through federal government, the bill appears to return regulation of health insurance to state politicians. The bill provides billions of federal dollars for Medicaid, for each state, but relies on each state to define who is eligible. It also provides for a new form of payment to the states called “State Innovation Grants & Stability Programs.”
This new program, if instituted, would provide grants to states to help them help citizens who are not eligible for health insurance through their employer. It would give states the money required to help “high risk” individuals obtain adequate health insurance, regardless of their economic condition.
The claim that Medicaid is going to be defunded and people are not going to have access to health insurance is false propaganda by the liberals who want to save Obamacare.
THIRD: The proposed “Replacement” plan is much shorter and less complicated than the PPACA, at least right now. The final PPACA ended up being over 900 pages of legal language. That does not count the consolidation bill that was passed the next day by congress to harmonize the House and Senate versions of the Patients Protection And Affordable Care Act that was forced on America by a purely partisan vote in March 2010.
The proposed “Replacement” plan is only 105 pages long, at this time. Keep in mind that it is starting out small. However, unlike the PPACA, it is likely to be amended by both Representatives and Senators. It is likely that after congress finishes adding amendments, it will be longer, but even if it doubles in size, it will still be 20% of the length of Obamacare (and consequently less complicated.)
FOURTH: Liberals are scaring the American public by saying that IRS subsidies will disappear immediately. Once more that is false propaganda. The proposed legislation does not eliminate the IRS Tax Credits (aka subsidies). It proposes a gradual phase out of them.
For 2017, there would be no change. For 2018 & 2019 subsidies applied will be lower percentages of the premium in effect at that time. Subsidies (Tax Credits) do not disappear totally until 2020.
FIFTH: The proposed legislation will replace the tax penalty for not having government approved health insurance on otherwise healthy Americans with a premium penalty of 30% of the premium for people who remain uninsured and then apply for guaranteed issue health insurance when they have a problem.
SIXTH: The proposed legislation would repeal the “Essential Benefits” definition and leave it up to the states, after 2020, to define what is an “Essential Benefit” in their state. (As far as I am concerned, unless the TX legislature is made up of fools and idiots, this would mean the end of plans that automatically have maternity coverage for males and females who cannot have children. If things return to the way they were before Obama started meddling, maternity coverage will once again be optional and only then apply for a potential mother.)
Unless states continue to define “Essential Benefits” the way Harry Reid did, 60 year-old men & women will no longer be forced to pay for maternity or substance abuse coverage. If they want that type of coverage, and it is available as an optional supplement, they are free to add it to their portfolio, at their own expense.
Maternity coverage, alone, represents 30-40% of the cost of health insurance. This move, alone, should help bring down premiums in states that do not include maternity as an “Essential Benefit” for every person.
SEVENTH: The PPACA states that there can be no more that a 1:3 ratio between the premiums for a young adult vs. someone in their 60s. That was intended to lower the cost for older American to pay for health insurance. The fact is that the insurance companies did exactly the opposite of what congress intended. They raised the premium on young adults to satisfy the ration. The result is that one of the biggest problems that Obama and HHS had was getting healthy young adults to participate.
The proposed “Replacement” plan restores the 1:5 ratio that existed before. That means that the health insurance companies are free to lower the premium for young adults.
EIGHTH: The proposed legislation reiterates the Grandfathered Plan provision from the PPACA. It allows people to keep pre-ACA plans in force, if their health insurance company continues to offer them. However, like the PPACA, the legislation does not require health insurance companies to continue to offer older plans. They are still allowed to discontinue a plan line at any time, and for any reason they want.
NINTH: Under the proposed legislation, health insurance exchanges still exist, but they are not as vital for individuals as they are now. They exist to help facilitate Advanced Premium Tax Credits (APTX) from the IRS.
APTX subsidies will only be available for health insurance plans purchased through health insurance exchanges. It is important to remember a couple of things about the exchanges.
- Unlike the last few years, if/when the “Replacement” legislation is made law, the entire population of the nation needing individual type health insurance will not be required to enroll through the health insurance exchanges. There are supposed to be more plans available outside of the health insurance exchanges. The only people who are required to use exchanges are those seeking IRS money to help pay for health insurance, and qualify for APTX.
- In the past the exchanges were available for Open Enrollment from November 1 – January 31. That is expected to change in 2017. This year, the exchanges are only scheduled to be open, for the Annual Open Enrollment from November 1 – December 15.
This post contains some thoughts about things found in the first 58 pages of a 105 page proposal. There are more issues that are about to be changed.
As you hear things through the media, keep in mind that anything you hear, including this newsletter, if nothing more than speculation or partisan propaganda. Nobody, including Paul Ryan, Mitch McConnell or Donald Trump, is able to tell you what will and will not be available for health insurance in the future. There is still much debate and at any time amendments to the proposed legislation can be made in committee, in the senate or during Reconciliation before the bill goes to the president to be signed into law.