Six years after the Democrat-supported Patient Protection and Affordable Care Act was signed into law, Republicans submitted their recommendations for changing the law.
Democrats wrote the law, commonly known as Obamacare, to expand health insurance and benefits to individuals and reduce health care costs. The law mandated that all Americans have health insurance and that large employers provide coverage. It imposed regulations on insurance companies, expanded Medicaid and opened Marketplaces where individuals could buy coverage, often at a subsidized cost.
Since its implementation, more Americans reportedly have health insurance, but critics say that health insurance costs rose, coverage choices are fewer, and employers and healthcare providers have more rules and regulations to follow.
Republicans in the U.S. House of Representatives formed the House Republican Task Force on Health Care Reform. Their 37-page proposal, which they released in June, is not a law, but a template for a future law.
Here are a few of the highlights of the proposal, which proponents say is designed to give consumers more choices at lower costs, pave the way for more cutting-edge cures and treatments, and strengthen Medicare:
The proposal does not change some of the most popular parts of Obamacare:
- Allows children to stay on their parents’ health plan until age 26, regardless of their student, employment or marital status.
- Prohibits insurers from denying coverage to people with pre-existing conditions.
If the proposals are implemented, here are some of the changes that would affect you:
- Expanding consumers’ ability to contribute to and use Health Savings Accounts (HSA).
An HSA allows individuals to save money tax-free to use for dental, vision and medical expenses. Republicans want to offer new incentives to use HSAs to increase consumer choice and increase competition among providers.
- Limiting the cost of an older individual’s plan to no more than five times that of a younger person. Obamacare mandates a three-to-one ratio (older adults charged only three times more than younger adults), but Republicans believe the low ratio is driving away younger Americans, since they are now shouldering a higher proportion of insurance costs than the actual cost of paying their claims.
- Allowing consumers to buy health insurance across state lines.
- Allowing employers to offer wellness programs tied to a financial reward or surcharge.
- Creating universal access programs funded by innovation grants to give financial support for those who cannot afford coverage.
- Giving block grants to states to run Medicaid programs for the poor.
- Gradually raising the Medicare eligibility age from 65 to 67.
- Ensuring taxpayer dollars are not used to fund abortion services.
- Establishing a refundable tax credit for people who do not have insurance through their jobs. Obamacare provides subsidies for people to buy insurance if they do not qualify for Medicaid.
- Eliminating the excise tax and capping the tax deductibility of employer-based plans based on the value of the benefits.
Obamacare’s excise tax, also referred to as the Cadillac Tax, is a tax on expensive health plans offered by employers. Beginning in 2018, health plans that cost more than $10,200 for an individual or $27,500 for a family plan will be subject to the tax, which is 40 percent of the amount that exceeds those thresholds. The purpose of the plan was to reduce excess healthcare spending by employees and employers by not encouraging them to get extensive coverage that pays for everything.
- Allowing states that have already expanded the number of people eligible for Medicaid under the law to maintain the additional coverage, although it would prevent any new states from doing so.
- Protecting employers’ rights to self-fund their own health coverage — a right they have now, although there has been some movement by the administration to impose more federal regulation.
Republicans hope that if they gain control of both the Congress and the White House in November, they will be able to turn the proposal into law.
Insuring Your College Student
The consumer protections under the Affordable Care Act also apply to student health plans, with several adjustments due to the unique nature of these plans:
Annual limits. Like other health plans, student plans cannot put annual dollar limits on coverage of “essential health benefits.” That does not mean that your plan has no limits — it just can’t limit coverage of “essential health benefits.” These include services in ten essential areas, including outpatient care; emergency room visits; inpatient care; pre- and post-natal care; mental health and substance use disorder services; prescription drugs; rehabilitation services and devices, including physical and occupational therapy and more; lab tests; preventive services; and pediatric services, including dental and vision care for children under the age of 18.
Self-funded plans (or plans funded by an institution such as a university, rather than an insurer) typically do not have to meet the requirements of the ACA. Therefore, the annual loss limit and a few other rules do not apply to self-funded student health plans.
Covering your college-bound child under your existing policy could prove the simplest and most cost-effective way to provide quality coverage. The ACA requires health insurance policies to allow children to stay on a parent’s plan until they turn 26 years old, regardless of their marital or student status.
If your child is going out of state, check your plan’s list of network providers to see whether it includes any near your child’s college. Many PPO and HMO plans cover services from non-network healthcare providers, but at significantly lower percentages. This could greatly increase your out-of-pocket costs.
Some families buy student health insurance and keep their child on the family plan. When you have more than one applicable insurance policy, “coordination of benefits” rules decide which one pays first.
We can help you evaluate health insurance options for all your family members. Please contact us for information.