10 Things You Need to Know About the House GOP Health Care Bill
Policy + Politics

10 Things You Need to Know About the House GOP Health Care Bill

REUTERS/Carlos Barria

The House on Thursday narrowly approved a GOP plan to repeal and replace the Affordable Care Act, breaking a months-long partisan logjam and sending the highly controversial measure to an uncertain future in the Senate.

The 217 to 213 vote marked a major legislative victory for President Trump and House Speaker Paul Ryan (R-WI), who overcame unanimous opposition from the Democrats and many more moderate Republicans who fear that the plan will disrupt the nation’s health care system and cost millions of their constituents their Obamacare and Medicaid coverage.

Related: Think the GOP Health Care Plan Doesn’t Affect Your Insurance? Think Again

Just when it seemed the House GOP American Health Care Act (AHCA) was about to fail for the third time in little more than a month, last minute agreements, including an additional $8 billion for people with pre-existing medical conditions, helped to unite the party. The final vote was a nailbiter, and the Republicans picked up just one more vote than the 216 needed for passage.

Here is a summary of ten things you should know about the legislation:

1. The plan eliminates most Obamacare mandates. Uninsured Americans no longer would be subject to a tax penalty for failing to purchase coverage under the Affordable Care Act – the so-called “individual mandate” that is so reviled by Republicans. However, a few popular provisions will be preserved, including allowing children to remain on their parents’ health insurance policies until age 26. 

2. It would replace Obamacare’s premium subsidies for low and middle-income people with a “refundable” tax credit plan that would help many more Americans buy insurance on the open market. All but wealthier Americans would qualify for set premium supports ranging from $2,000 to $4,000 a year, with the highest support level going to older people who generally have higher premiums and medical costs than younger, healthier people.

3. The bill would slash taxes for mostly wealthier Americans.  Obamacare subsidies and operational costs have been financed by a series of tax increases that have largely fallen on high-income earners, including a 3.8 percent tax on investment income and a 0.9 percent hike on income over $200,000 for individuals and $250,000 for married couples filing jointly.

Related: The GOP’s Bizarre Gamble on Health Care Reform

There are other taxes on medical device manufacturers and tanning salons. The AHCA would do away with most of the Obamacare taxes that add up to $883 billion over the coming decade, according to the Congressional Budget Office (CBO).

4. States could opt out of two of the most important Obamacare mandates that are preserved in the GOP bill:  requiring insurers to provide consumers with all 10 “essential benefits” called for under Obamacare --such as pregnancy care, prescription drugs, emergency care and mental health and drug treatment -- and barring insurers from charging people more based on their pre-existing medical conditions.

Under the AHCA, insurers could qualify to dramatically scale back those essential benefits to reduce premiums and bolster sales to younger, healthier consumers who don’t need or want many of those benefits.  While the Obamacare requirements tended to push up insurance premiums and co-payments because there was more to cover, they also provided consumers with high-level, standardized coverage and protection.

5. The revamping of the pre-existing medical condition protection could create the possibility that millions of Americans with problems like cancer, diabetes or high blood pressure will be charged more for their health coverage – something explicitly prohibited under the Affordable Care Act. Some analysts warn that the new approach would make it possible for insurance companies to bring back things like lifetime benefit caps and out of pocket expenditure limits.

Related: Can the GOP’s Contrived Health Plan Rescue Consumers from Obamacare’s Collapse?

House Speaker Paul Ryan (R-WI), President Trump and others insist that the compromise amendment drafted by Rep. Tom MacArthur (R-NJ) would essentially preserve the ban on price discrimination against those with pre-existing conditions, except in cases where there is a break in coverage for consumers.

They also say that the older and sicker people who generally will be forced to pay more for their coverage will have access to state-run “high-risk pools” or reinsurance to subsidize their insurance costs. But states have had mixed success in operating high-risk pools in the past because of inadequate funding. And critics and analysts warn that the $123 billion that the federal government would set aside for those subsidies in the coming decade for risk pools, including $8 billion added as a sweetener under the MacArthur amendment, would be woefully inadequate.

6. The state benefits opt-out provision could also have important significance for employers nationwide who are not part of Obamacare but provide health care benefits to their employees. A never-used provision of existing law allows companies to choose any state-approved package of essential benefits when negotiating the terms of a group insurance package for their employees.

In the likely event that some states decide to seek waivers to scale back their coverage requirements for insurers drastically, private employers could choose to adopt the skimpiest, least expensive package, according to some analysts.

Related: The White House Fires a Warning Shot on Obamacare, but Are They Firing Blanks?

7. The expanded Medicaid program would be phased out. The Affordable Care Act expanded traditional Medicaid to cover able-bodied single adults making up to 133 percent of the federal poverty level. Thirty-one states and the District of Columbia chose to take part in the program largely funded by the federal government. More than 11 million people previously uninsured signed up for the program. 

Under the House bill, the expanded coverage would remain in place through 2019, but no newly eligible people could be added after that. Low-income people typically move in and out of the Medicaid program, depending on their incomes and job situation. That means that once the phase-out begins, there will be a steady shrinkage in Medicaid coverage.

8. Medicaid would be nicked in other ways. The bill would transform the program from an entitlement to a block grant. States for the first time would receive a lump sum instead of a per-capita payment for tens of millions of Medicaid patients throughout the country.  As time goes by, states must assume a larger share of the cost.

States will also be granted more leeway to alter eligibility requirements, such as having some families pay a premium and imposing work requirements for able-bodied people. The non-partisan CBO has calculated that the net effect of the changes would be 14 million fewer people on Medicaid.

9. There is no way of knowing how much the House GOP plan would cost over the coming decade, how many millions of people would lose their coverage or opt out of being covered, how much premiums would cost and what impact the new approach would have on the long-term deficit.

CBO analyses of previous iterations of the bill projected that that as many as 24 million people would not be covered over the coming decade (14 million by choice). But Ryan (R-WI) and White House officials said they saw no need to wait for another CBO analysis before voting on the plan.

10. In the end, members of Congress will be subject to the terms of the bill. At one point, the House GOP bill as amended exempted members of Congress and their staff members from the effects of the legislation, including a possible downgrading of benefits and subsidies.

Members of Congress received special treatment under Obamacare, including top of the line coverage and substantial premium subsidies. The question became whether lawmakers would continue to get preferred treatment under the new House GOP plan. But House members amended the bill before final passage on Thursday to remove their special treatment from the bill.