While GOP leaders are pushing to roll out the new alternative to the Affordable Care Act or Obamacare by Easter, Democrats and some Republicans are saying “not so fast.”
Critics say the Republican-sponsored healthcare bill, known as the American Health Care Act, would leave millions of lower income individuals without coverage.
Currently, 20 million people have health coverage under Obamacare. About 1.2 million are enrolled in California. Subsidies from the federal government are used to buy health plans through California’s marketplace, known as Covered California.
Republicans are still tweaking the proposal, but here are key differences and similarities to Obamacare:
The good news is premiums will not go up for those with pre-existing illnesses and adult children can stay on their parents’ plans until age 26. That is where the similarities end.
Obamacare requires everyone to have coverage or pay a penalty. AHCA would do away with the mandate, but would impose a 30% penalty if insurance lapses.
AHCA would use tax credits to subsidize insurance coverage, and those credits would be based on a person’s age instead of income. Individuals 30 and younger would receive a $2,000 tax credit. People between 31-59 would get $3,000 in tax credits and those 60 and older would receive $4,000.
A low income man interviewed by “NBC Nightly News” said he wouldn’t be able to afford coverage under the GOP plan. He makes about $30,000 a year and pays $1,000 in income tax. The government would give him a $1,000 tax credit and issue a check for the balance. He currently received a $4,200 subsidy under Obamacare, so he would lose $1,200.
“I don’t see the credits as enough to offset the cost of buying insurance on the private market,” he said.
The AHCA would freeze expansion of Medicaid, known in California as Medi-Cal, in 2020. In California, Medi-Cal provides coverage to more than a third of California residents.
Under Obamacare, states received money for their Medicaid programs, which are jointly funded by state and federal governments. California currently receives $15.3 billion in federal funding for the Medicaid expansion, according to the state’s Legislative Analyst’s Office.
Under Obamacare, the federal government reimburses states for their programs’ expenses regardless of the amount. AHCA would put a cap on the amount of money.
While supporters of the new bill say capping Medicaid would force states to handle funds more efficiently, health care economists say the only way funds could be curtailed would be to drop people from the program.
“Such a change would effectively reverse a 50-year trend of expanding Medicaid in order to protect the most vulnerable Americans,” according to a recent report from the Commonwealth Fund.
AHCA would also ban federal funding for Planned Parenthood and other health facilities that provide abortion services. In addition to abortions, Planned Parenthood provides a host of other women’s health services, including breast and vaginal exams, and birth control. If the bill were to pass as is, low income women would see these vital services disappear.
“The losers are lower income people who really need financial assistance,” said Sara Rosenbaum, a professor at George Washington University.
It is not clear how much the GOP plan would cost.