8 Insights To The Republican Replacement Plan

2017-newsletterGranted, I am an insurance agent and not a lawyer.  What I am about to share is based on what I read in this morning’s proposal.  As you read my thoughts, keep in mind that nothing is “official” until after President Trump signs a bill into law.  Even then, insurance company lawyers will need to determine what can, and cannot be done.

Remember that all this morning’s proposal does is give America an idea of what the politicians in D.C. are thinking about.

To put it another way, consider that what was proposed this morning is like a child’s letter to Santa.  It is nothing more than a wish list that may, or may not, be fulfilled.

Having said that, there are a few things on the “wish list” from this morning that I found interesting.

  1. The top issue is the Individual Mandate.  Most of my clients have expressed concerns about potential “penalties” if they do not have Obamacare compliant health insurance.  Assuming this bill passes both houses of congress, the Individual Mandate will not be applied to 2016 or any tax year after it.  That means that individuals are free to use STM plans, if they want, for their health insurance in 2017.  (Just keep in mind that March 30 is the deadline for locking in premiums and benefits for 2017.)
  2. The proposal does not eliminate tax subsidies immediately.  The Advanced Premium Tax Credits will be gradually phased out over the next 3 years
  3. The proposed legislation will change, drastically, how the Federal government will pay its portion of Medicaid.  It does not eliminate the Medicaid program but changes the way money is paid to states for Medicaid to a more efficient manner.
  4. The proposed legislation will eliminate most, if not all, of the additional taxes created by the Affordable Care Act.
  5. If I read the proposal correctly (once again I am an insurance agent and not a lawyer), it appears that the federal government will “reinsure” medical claims between $50,000 and $350,000.  That alone should take a great deal of pressure off of health insurance premiums.
  6. This morning’s proposal would add a penalty for people who go for 12 months without paying for health insurance and then obtain insurance protection after they have been diagnosed with a major health issue.
  7. In addition to the new “penalty” all people will be given the option to enroll in health insurance at a standard rate, but those who lapse their policy and then want to return to the system after they have been diagnosed with a problem would be subject to medical underwriting.  If they are still in good health, they will get standard rates.  However, if they now have a serious health issue, they will obtain coverage through a state-based high risk plan.
  8. The proposed legislation would allow health insurance companies to charge older people 5 times what they charge young adults rather than just 3 times.  (Harry Reid’s idea when he changed the ratio in the PPACA to 1:3 was that health insurance companies would lower the premium they charged to older Americans.  However, health insurance companies did just the opposite of what was intended.  They raised the premiums for young adults to meet the 1:3 ratio.   This change merely returns things to the way they were before federal politicians started messing around with something they know nothing about.)

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