Tuesday, 7 March 2017

The AHCA: is it just 'Obamacare-lite'?

For months, President Trump has been saying that his number one priority with regards to health policy is to “repeal and replace” the Patient Protection and Affordable Care Act (aka Obamacare). Immediately, questions were raised about what it would be replaced with and how many people might become insured as a result. Last night, the Republicans unveiled the American Health Care Act (AHCA) – the healthcare bill which will replace the PPACA and which may become ‘Trumpcare’.

What immediately strikes me about the bill is how like Obamacare it is. Children can remain on their parent’s plan until the age of 26 still and insurers cannot discriminate against people with pre-existing conditions by jacking up prices. The stark similarities have caused many Republicans to condemn the AHCA as ‘Obamacare 2.0’ or ‘Obamcare-lite’.

Even some of the changes are minor. Under Obamacare, people without health insurance were penalised in the form of a tax. Under the AHCA, although there is no tax for people who go without cover, if they decide to re-enrol after being uninsured for more than 63 days, insurers can add a surplus charge of 30% for the first year of being covered again regardless of their health. The effect of this resemble that of Obamacare: US citizens are better off owning health insurance and keeping it.

Under Obamacare, insurers could only charge old people 3x more than they would charge young people however under the AHCA, insurers can charge old people 5x more than young people. Many predict that this will make health insurance slightly cheaper for young people but slightly more expensive for old people.

Many are pleased that Medicaid (the health care program that assists people on low-income) will continue to expand until 2020. After that, it will ‘freeze’ and be re-evaluated.

However, basic insurance plans will not be required to cover paediatric and maternity care from 2020 onwards.

The changes to tax credits are where things get slightly more complicated and the effects become more unclear. Under Obamacare, any individual with an annual income less than approximately $24,120 would be able to get a midlevel insurance plan for no more than 6.4% of their income. People earning more than that figure would not be entitled to any tax credits.

Under the AHCA, any individual earning less than $75,000 will be entitled to tax credits. The amount depends vastly on age though and varies from $2000 for those under the age of 30 to $4000 for those over the age of 60.

Accurate statistics regarding who will benefit and who will not are still emerging. As are the Congressional Budget Office’s figures showing how much the AHCA will cost the US government.

All of this might not matter anyway, the bill is currently facing intense scrutiny from Senators and congressmen both sides of the aisle and Trump is yet to endorse it. The future of the AHCA/Trumpcare may still look very different to the bill released yesterday.