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How the GOP health care bill may affect you

House Speaker Paul Ryan makes his case for

House Speaker Paul Ryan makes his case for the GOP's long-awaited plan to repeal and replace the Affordable Care Act on March 9, 2017, at a news conference on Capitol Hill. Photo Credit: AP / J. Scott Applewhite

WASHINGTON - President Donald Trump and Republicans who control Congress are advancing a sweeping health care bill that would make some significant changes to Obamacare. But it would not completely repeal the current national health care law. In fact, the GOP proposal would keep some significant elements of former President Barack Obama’s Affordable Care Act.

Here is a look at what would change, what wouldn’t and how the modifications might impact people in different income and employment situations.

What would be the biggest change if the bill, known as the American Health Care Act, replaces Obamacare?

The mandate that every individual get health insurance or pay a penalty to offset health care costs would be eliminated. Also, large employers would no longer have to cover workers or face a penalty if they don’t.

Philosophically, this is the crucial hinge for many Republicans: Switching from mandates to choices.

“It comes down to whether you want government playing a predominant role in determining what [health care coverage] should be offered in or whether you think [insurers] should be allowed to offer plans” that fit the market, said Rep. John Faso (R-Kinderhook), the lone New York Republican on the House Budget Committee. “The ACA represents a centralized approach. The Republican approach lets the market work and lets individuals decide what to buy.”

What are the other major changes under the GOP plan?

The Republican plan would replace Obamacare tax credits with a different kind of tax credit. In short, Obamacare provided tax credits based on incomes and costs of policies; the GOP would base it on age. Further, the GOP plan would cap the maximum credit at $4,000 for people 60 or older; under Obamacare, the credits could be $10,000 or more.

The GOP plan would keep federal funding of Obamacare’s Medicaid expansion through 2020, but halt it after that. The expansion had allowed people who earned just enough money to be excluded from Medicaid to join it. That will end. People in this income category will be among those most affected in the future, by the proposed changes.

The GOP also would ban federal funding for health care providers that offer abortion, such as Planned Parenthood, for one year.

What parts of Obamacare would be maintained?

The GOP would keep some key parts of the ACA that are popular: Insurers wouldn’t be able to deny coverage to people with pre-existing conditions; children would be able to stay on their parents’ policies until age 26; insurers can’t cap annual or lifetime medical expenses.

If I get health insurance coverage through my job, will I see major changes?

“It’s not going to have a huge effect,” said Bill Hammond, a health care policy analyst at the Empire Center for Public Policy, a fiscally conservative think tank.

About 49 percent of New Yorkers get coverage through their employer — about the same as the national average. The overwhelming majority of companies provide health insurance not because of the threat of the penalty, but because it is part of the traditional package offered to attract employees or “because they think it’s the right thing to do,” Hammond said. The removal of the penalties likely won’t spur companies to suddenly drop coverage.

That said, companies could alter what their policies cover based on how the market shakes out. The Congressional Budget Office projected that up to 7 million fewer people would be covered through work-offered insurance by 2026 because companies no longer face a penalty. Republicans called that estimate overstated.

In New York, about 24 percent of residents get health coverage through Medicaid — a rate slightly higher than the national average, in part because it has one of the most generous Medicaid plans among states. About 13 percent get coverage through Medicare and 7 percent through the individual (nongroup) market. About 6 percent of New Yorkers still aren’t insured, according to the Kaiser Family Foundation, which tracks health care.

Well then, who will see the most impact?

Like the ACA, the Republican plan primarily affects those who must buy insurance on their own — especially young adults and senior citizens. And the impact depends on a person’s circumstances. A few examples of how the tax credits might change:

  • If you are a Long Islander 60 or older and your income is $30,000, it’s essentially a wash: you’d be eligible for $4,000 in tax credits under the GOP plan and $3,930 under Obamacare, according to Kaiser. That same person earning $75,000 in income would fare better under the GOP plan because his or her income level is too high to get any tax credits under Obamacare. (If that person earns $100,000 or more, he/she could get $1,500 in tax credits in the GOP plan.)
  • If you are a Long Islander who is 27 (no longer covered by your parent’s policy) and are earning less than $50,000, you’d fare better under Obamacare. If you were earning more than that (up to $75,000), you’d fare better under the GOP plan.

But it’s not just tax credits that would change, it’s also likely premiums would too. Examples:

  • Younger individuals likely would see lower insurance premiums. That’s because the GOP plan, according to supporters, recognizes that young people have fewer health costs and should pay less.
  • Persons 60 or older who are buying on the individual market likely would see premiums rise. Under Obamacare, insurers could charge older adults up to three times more than young adults. The GOP would change that ratio to 5-to-1.

Obamacare relied on some taxes to help pay for coverage expansion. What happens to them?

Most of them would go away. The GOP would eliminate the mandate penalty, fees on insurers and prescription drug manufacturers, taxes on the sales of certain medical devices, a surcharge on investment incomes and the 10 percent tax on indoor tanning services.

But, importantly, the GOP would keep the so-called Cadillac tax. Scheduled to begin in 2020, this Obamacare provision would impose an excise tax (paid by insurers and employers, not individuals) on health plans that cost more than $10,200 for individuals and $27,500 for families. The GOP would delay the phase-in by five years. Supporters say the tax is a control on health care spending. Some Republicans, though, want to kill all the taxes imposed by Obamacare.

“My view is this: After spending seven years talking about the harm being caused by these taxes, it’s difficult to switch gears now and decide that they’re fine so long as they’re being used to pay for our health care bill,” Sen. Orrin Hatch (R-Utah) told The Hill political website.

What about abortion and women’s health services?

The GOP would freeze Planned Parenthood funding for one year. The organization gets nearly half its funding from the federal government, according to The Associated Press, and the aid doesn’t pay for abortions but rather other services such as birth control and treatment of sexually transmitted diseases.

Further, the GOP plan prohibits the use of tax credits to purchase any health plan that covers abortions.

Though many in the GOP applaud the proposals, two female Republican senators (Lisa Murkowski of Alaska and Susan Collins of Maine) have said the Planned Parenthood ban shouldn’t be part of the legislation.

What is the debate about substance-abuse treatment under Medicaid and how it is affected?

For the 31 states that expanded Medicaid under Obamacare (including New York), the GOP plan would eliminate (in 2020) the requirement that Medicaid cover mental-health and substance-abuse treatment. That doesn’t mean states won’t continue to cover those services, but they will be among the mix of coverage choices.

Some Democrats and some health-policy groups view this as a “major retreat” from substance-abuse treatment.

What is the projected impact on enrollment and premiums?

The Congressional Budget Office projected that health care premiums would spike 20 percent for those buying in the individual market during the first 10 years, but decline by 10 percent overall in a decade. But again, individual circumstances can vary widely.

The CBO said that a 64-year-old with a $26,500 income would pay $1,700 in premiums in 2026 under Obamacare — and $14,600 under the GOP bill. Yet a 27-year-old and a 40-year-old would see premium decreases.

Those who currently earn too much to qualify for Medicaid or Obamacare subsidies likely would fare better under the GOP plan. For example, a 40-year-old who earns $68,200 annually would pay $6,500 in premiums under Obamacare but $2,400 under the GOP plan.

What is the political reaction on Capitol Hill?

By and large, the Democrats have been united in opposition. The Republicans are very much divided — for different reasons.

Conservatives have blasted the plan as lukewarm reform and “Obamacare Lite.” Moderates, in contrast, are worried about the projection by the CBO that the bill would mean 24 million people would not have health insurance 10 years from now. And some Trump allies called the plan a “trap” that will bog down the presidency.

“Abandon Obamacare Lite now. It’s a bad law and can’t pass,” Sen. Rand Paul (R-Ky.) urged his colleagues.

Sen. John Thune (R-S.D.) said the legislation needed to be “more helpful to people on the lower end” of the economic scale. Rep. Mo Brooks (R-Ala.) called it the “largest welfare program ever advanced by the Republican Party.”

Yet House Republicans have advanced the bill rapidly, hoping to set up a vote before the end of the month.

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