Today the American Health Care Act was passed in the House by a slim margin. What are the major differences between the AHCA and the ACA?
Similarities Between AHCA and ACA.
1. Pre-Existing Conditions Will Still Be Covered
Under the Affordable Care Act, insurance companies are required to cover pre-existing conditions. This is still the case under the AHCA, but the creation of High Risk Pools, funded with $8 billion dollars was an added amendment to the AHCA. Pools provide coverage if you have been locked out of the individual insurance market because of a pre-existing condition, and are subsidized by a state government. The premium is up to twice as much as individual coverage. Individuals who have a lapse in coverage of more than 63 days will be required to pay a 30 percent premium surcharge for 12 months when coverage is purchased.
2. Adult and College Aged Children Up To Age 26 Can Still Remain on Parents’ Health Plan
People who are under 26 years old can stay on their parents’ health insurance plan under both the ACA and the AHCA.
3. No Lifetime Cap
Before the Affordable Care Act many plans set a lifetime limit, a maximum dollar amount that were covered in the plan. The ACA prohibited this, and it is still prohibited under the AHCA.
4. Tax Credits
The AHCA includes an advanceable tax credit, but it is based on age and family size rather than income level.
Differences Between AHCA and ACA.
1. No More Mandate to Purchase or Provide Coverage
The plan eliminates the individual and employer mandate penalties. This means people will no longer be fined for lack of insurance, and large companies do not have to pay if they do not offer insurance to their employees. However, the plan allows for insurance companies to charge if a person was uninsured for 63 continuous days during the previous year.
2. Medicaid Expansion
The ACA’s plan to grow Medicaid is being halted. New enrollment freezes in 2020.
3. Abortion Funding Is Restricted
4. Taxes on the Health Care Law Would Be Repealed
The plan removes the taxes on prescription drugs, over-the-counter medications, health-insurance premiums, and medical devices that the ACA used to pay for their plan.
5. Essential Health Benefits
The AHCA eliminates the requirement for Essential Health Benefits. The AHCA allows limited policies that are only in case of major illness or injury.
6. HSA and FSA
HSA contribution limits would be increased to match high deductible health plan out of pocket limits, and spouses would be able to make catch-up contributions to the same HSA.
The AHCA would change several current rules that apply to health Flexible Spending Accounts (FSAs) and Heath Savings Accounts (HSAs).
HSA and health FSA could be used for over the counter medications. Currently, HSA and health FSA funds cannot be used for over the counter medications without a prescription.
The next step is for the legislation to be moved on to the Senate, where it will likely face serious challenges. Senator Rand Paul has proposed S.R 222 that is different from the AHCA. The CBO has yet to score this bill with the amendments.
Stay tuned to the HealthcareExchange blog for more information.