For those seeking health care reform in 2017, it’s been a rough road so far. The first two repeal-and-replace TrumpCare bills both failed in the Senate, but now there is a third one under debate, which proposes to gut the Affordable Care Act in an attempt to make health care more affordable for more Americans. Here is a rundown of how it may affect you:
No more individual or employer mandates:
Health insurance will no longer be mandatory. As an employee, you will no longer be obligated to be insured or face a tax penalty. Likewise, the fines for employers who do not offer sufficient, or any, insurance will also be removed. While this has the potential to save the voluntarily uninsured $950 per year, it is also likely to make insurance more difficult to obtain, since smaller employers and those averse to benefits will probably cut coverage as soon as they are able to.
Dismantle the ACA Marketplace
There will no longer be a centralized federal exchange for individuals to compare and buy health insurance coverage. States that have their own exchange will be allowed to retain it, but the Obamacare plan levels (bronze, silver, gold, platinum) will no longer be relevant, and insurers can choose what services are covered in each plan. Getting coverage will become a direct deal between you and your insurer, and plans will no longer be required to meet national and state standards for price and coverage. One positive here is the return of catastrophic plans, specialized low-budget insurance which only covers long stays in hospital and life-threatening conditions, and may not cover more expensive treatments or pre-existing conditions like cancer and diabetes. But without the ability to comparison shop, buying plans directly or on state markets in the states
No protection for pre-existing conditions
Without the ACA’s changes to the pre-existing condition policy, insurers were able to require a physical exam as a prerequisite for obtaining insurance. Based on what the doctors found, insurers could choose to offer higher rates, or not to cover a patient at all. Graham-Cassidy will devolve the pre-existing condition protection to the states, allowing state legislatures to decide whether everyone, or only the relatively healthy, will be eligible for health insurance in their state. While this may lower healthy and young patients’ insurance rates, it does so at the expense of bringing back a class of uninsured, uninsurable Americans in need of expensive medical care, and the inevitable rash of GoFundMe’s for the patients suddenly losing coverage.
Per capita funding limits for Medicaid
Medicaid currently holds a special open-ended status in the federal budget. While there are specific requirements that individuals must meet to be eligible, and set prices paid to health care providers for treatments, the nationwide spending on the program is unlimited. Graham-Cassidy proposes national and state limits on Medicaid spending — not just federal spending but state Medicaid extension — which would allow Medicaid to run out of money and become unable to provide care until emergency funding was approved. To make matters worse, these limits are lower than current spending, which virtually guarantees cuts in coverage as soon as this year.
Repeal of subsidies, and replacement with block grants
This one has much more impact politically than for the average individual. However, the end result is a shift in burden for paying for health care, from the federal government to state governments, which will initially be offset by grants to the states roughly equal to what their share of federal Medicare and Medicaid-expansion funding would have been. The eventual problem here is that these are subject to the federal budget, unlike the previously open-ended spending, and the framers of this bill have already shown their intent to cut and eventually eliminate these funds after 2020, which will result in higher state taxes, decreased Medicaid eligibility and/or loss of care for some people struggling with the poverty line.
This is a confusing time for the health care and health insurance industries. If you are struggling with understanding the health care marketplace for yourself or your employees, consult a financial advisor for an in-depth, personalized look at your insurance options, no matter what health bill is in effect.