Health

How the new Trumpcare bill could affect health care consumers

Image result for How the new Trumpcare bill could affect health care consumersAfter weeks of wrangling, protests and pressure from the White House, a new health care bill was passed by the House of Representatives today. The new bill has changed multiple times since Republicans first introduced it back in March.

Here are some key takeaways about the newest version of the American Health Care Act (AHCA), also referred to as Trumpcare.

Pre-Existing Conditions

Technically people with pre-existing conditions cannot be barred from receiving insurance coverage under the AHCA, however their coverage options could still be seriously affected by this bill. States can apply for waivers that will allow insurance companies to no longer be held to a “community rating” provision and charge far higher premiums for people who have pre-existing conditions.

The community rating provision is a way of setting premiums and is designed to ensure risk is spread evenly across a larger community. This means that people are charged the same rate regardless of different factors like health status. Under the ACA, insurance companies could only change rates for different plans based on a person’s age, geographic location, the number of people on a plan and their tobacco use, according to the Kaiser Family Foundation.

Under the new AHCA people in certain states could face far higher premiums for pre-existing conditions. States that apply for this waiver would have to implement high-risk insurance pools to accommodate them. But health care experts are skeptical that these high-risk pools would have enough money to fully cover people in need.

Karen Pollitz, senior fellow at the Kaiser Family Foundation, told ABC News that if there is no protection from higher costs for their specialized insurance plans, people with pre-existing conditions will likely be priced out of coverage. In the 1990’s, she added, people with pre-existing conditions who had recently lost their jobs were supposed to be protected by the Health Insurance Portability and Accountability Act and not be barred from insurance coverage. However, in practice, insurance companies charged far higher premiums for those people with pre-existing conditions.

“To actually protect someone with pre-existing condition … they need full protection otherwise it’s like giving someone half a bulletproof vest,” Pollitz told ABC News.

High-Risk Pools

The newest version of the bill allocates $8 billion over five years for states that apply for the waiver, to help cover the costs of care for people with pre-existing conditions. Most likely, the states would use this money to help fund a high-risk insurance pool for consumers with pre-existing conditions.

Pollitz said it’s unclear why $8 billion was picked as an appropriate number to fund a high-risk insurance pool, especially since it’s unknown how many states would apply for the waiver and how many people with pre-existing conditions would need help paying for care.

“Eight billion is not a number that bears any resemblance … to what this would cost,” she told ABC News.

Prior to the Affordable Care Act, 35 states had high-risk pools to cover residents who otherwise would not be insured because of pre-existing conditions. The Kaiser Family Foundation found that state high-risk pools often had significantly higher premiums and likely included just a small fraction of people who needed coverage.

Healthcare Mandate

The Trumpcare bill does away with the mandate under the ACA that requires people have health insurance or pay a fine. However, under the new bill people who go 60 days without health coverage will be penalized when they rejoin a health plan.

They will face a 30 percent penalty on their insurance policy for one year.

Christine Eibner, senior economist and professor at the Pardee RAND Graduate School, told ABC News in an earlier interview that some people will likely not view insurance as a necessity and be more willing to bet that they can afford the 30 percent surcharge on health insurance down the line.

“It doesn’t seem that punitive,” said Eibner. “You’re still guaranteed that you can get health insurance … for some people that might be affordable and you might end up with employer coverage in the interim.”

Essential Health Benefits

Under the ACA certain essential health benefits including maternal care, prescription coverage and mental health care must be a part of any insurance plan. Under the new Trumpcare bill, states could apply for a special waiver that would exempt insurance plans from including these benefits in their plan. To qualify, the states would need to prove they could either lower the cost of healthcare for people or increase the number of people covered by insurance.

Health experts say that if this amendment is passed, the costs for people in need of specific essential health benefits will likely face higher premiums. This is because insurance companies will assume if someone signs up for a plan with maternal care or prescription benefits, they are going to use these benefits.

“If somebody needs maternity care, it will be much more expensive,” Eibner said.

Pollitz said insurance companies will likely offer cheaper plans, but under those plans people will be left vulnerable to high medical costs.

“If you waive hospitalization or prescription drugs then it starts to make the policy cheaper for sure,” Pollitz. “But you’re also back to part of the [bullet proof] vest again.”

Tax Credits Changes

Under the new bill, qualifications for tax credits to help pay for health insurance will change significantly.

While the ACA offers a scale of credits that take into account family income, cost of insurance and age, the Trumpcare plan offers flat tax credits per individual that will be focused on age. The House GOP bill would provide tax credits between $2,000 and $14,000 a year for individuals who don’t get insurance coverage from an employer or the government. The credits would be based on age instead of income, but capped for higher income earners.

People who are older, lower-income and live in areas with high insurance premiums would likely receive fewer tax credits under the new bill than they would have under the ACA. Those who are younger, with higher income, and live in areas with lower insurance premiums will likely receive more government assistance than they currently do, according to the Kaiser Family Foundation.

A 64-year-old who makes $26,500 a year could see their net out of pocket costs increase from $1,700 a year under the current law to $14,600 a year under the GOP plan, according to Congressional Budget Office estimates. A 40-year-old making the same amount would pay a few hundred dollars more after the tax credits, from $1,700 under Obamacare to $2,400 under the GOP bill.

Medicaid The new bill will have major changes to the way Medicaid is funded. First, the federal support of expanded Medicaid to 133 percent of the federal poverty line will be rolled back. States that currently offer Medicaid to people below 138 percent of the poverty level will no longer receive extra funds for new expansion candidates after 2020, Kaiser Health News said.

People who receive Medicaid will be required to work unless they are disabled, pregnant or elderly.

Beginning in 2020 federal Medicaid financing will be changed to a per capita cap rather than a matching program, under which the federal government has supplied funds based on the number and needs of the enrollees.

Additionally, after 2020 state Medicaid plans will no longer be required to provide “essential health benefits” including emergency services, pregnancy and newborn care, prescription drugs and pediatric services. Capping federal funds for Medicaid could have a huge impact on seniors and disabled children who depend on that coverage, according to Pollitz.

“There are 75 million people on Medicaid today it’s the second largest source of coverage,” she said. Employer coverage is the largest.

She pointed out that, without federal funds to help with Medicaid coverage, states may have less money to help fund high-risk pools or other subsidies to help people afford healthcare. The changes will reduce $880 billion in federal spending on Medicaid over the next decade, pushing more of the financial burden for covering more than 74 million people in the program onto the states, according to the Kaiser Family Foundation

“It would be a big hit for states,” Pollitz said. “It matters for the coverage and what states are going to be willing to spend in addition to this federal grant money. They’re going to have their hands full.”

Older Adults vs. Younger Adults

Under the ACA, insurance companies could charge up to three times the amount for an older person’s insurance plan compared to a younger person, or a three-to-one ratio. The new plan would allow health insurers to charge five times the amount, which could greatly increase the premiums older people would have to pay for comparable plans. States would be able to set their own age ratios.

Eibner said that Americans who are in the oldest age bracket before being eligible for Medicare would be at risk for expensive premiums.

“They will face higher premiums than they currently do and the younger people will face [smaller] premiums.”

ABC News’ Devin Dwyer and MaryAlice Parks contributed to this story.

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