A couple months ago, we released an article talking about the effects of the American Health Care Act. We noted that the failure of the bill most likely meant that health care reform was over in the Trump Administration. Rumors of it’s demise seems to have been greatly exaggerated. Several weeks ago, the Republican House passed the AHCA with a few new amendments that won over moderates and tea partiers alike.

This week the Congressional Budget Office released the forecasts of the new AHCA. (For a breakdown of the original version, please check out our last article.)

The projected results of AHCA remain similar the the original version.

  • 23 Million people will lose their health insurance by 2026, with 14 million losing their health insurance by 2018. This is compared to 24 million and 14 million respectively in the original version
  • There will be 100 billion dollar reduction in the deficit over 10 years, compared to 200 billion in the original version
  • Premiums would rise up to 20% until 2020, at which point premiums may decrease depending on the state (more on that later)

Congressional Republicans have been trumpeting the 100 billion in savings from cutting the ACA. However, take a closer look at this bill & we see that  many people would lose health insurance. There would be an $880 billion dollar reduction in Medicaid spending that so cleverly partners with the proposed $700 billion dollar tax cut. This tax cut reduces the tax burden of those earning over $250,000 and pharmaceutical executives. (See Chart HERE)

So what changed?

The big change that won over Tea Party Republican and Moderate Republicans was the MacArthur Amendment. This Amendment lets states opt out of requirements that health insurance provide “essential benefits” and requirements that insurance companies must treat people with pre-existing conditions the same as healthy people when pricing insurance. The CBO projects that a sixth of all states would take up this offer and opt out of these regulations.

These changes explain why for some, their premiums may actually decrease. Since states can waive requirements to cover essential benefits, the cost of that health care would decrease. This wouldn’t be an apples to apples comparison of health insurance. “Services or benefits likely to be excluded from the [Essential Health Benefits] in some states include maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits. In particular, out-of-pocket spending on maternity care and mental health and substance abuse services could increase by thousands of dollars in a given year….” Resulting in lower premiums since our insurance would no longer cover these expenses.

For some living in states that waive Obama-era requirements, those with pre-existing conditions would be hit particularly hard. By definition, if people with pre-existing conditions can be charged differently than healthy people, the cost of health insurance for those with pre-existing conditions would go up. The CBO predicted the outcome of these changes, “In addition, premiums would vary significantly according to health status and the types of benefits provided, and less healthy people would face extremely high premiums, despite the additional funding that would be available under H.R. 1628 to help reduce premiums. Over time, it would become more difficult for less healthy people (including people with preexisting medical conditions) in those states to purchase insurance because their premiums would continue to increase rapidly.”

The projected effect this would have on people with pre-existing conditions could be devastating. The CBO predicted that premiums for people with pre-existing conditions that live in state that waive the Obama-era requirement could see their premiums increase by as much as 850%, costing over $15,000 for health insurance premiums.

The MacArthur amendment does place people with pre-existing conditions in a “high risk pool”. More information on that will come in a future article.

What do you think of this bill and the MacArthur amendment? While AHCA has passed the U.S. House, it has still not been debated by the Senate. So please, call your Senators and let them know what you think!