The more things change, the more they stay the same. That was never more true than with the recent unveiling of the Republicans’ long-awaited “Repeal and Replace” plan, called the American Health Care Act (AHCA). To the surprise of many, under their plan large swaths of the existing Affordable Care Act (ACA) would remain.
Given the likely continuity of key provisions of the Affordable Care Act, the upcoming Money Series presentation by Laverna Witkop of Ford Insurance Agency couldn’t be better timing. For those interested in learning more about ways to access today’s health insurance market, Laverna’s grasp of both the current ACA’s rules as well as her knowledge of the Republicans’ proposed changes under AHCA will be on full display.
To begin, let’s first describe a few major similarities between the proposed AHCA and the existing ACA.
The ban on denying insurance coverage for those with pre-existing conditions will remain unchanged. In addition, the rule allowing young adults to stay on their parents’ health insurance policy until age 26 would also remain. And, perhaps most controversially for some GOP members, the AHCA maintains the granting of health insurance premium subsidies through tax credits.
Of course, there are also major differences between the ACA and the proposed AHCA.
Where the ACA provides premium subsidies based solely on income, the Republican’s AHCA instead bases its subsidies on age alone. This change favors those with greater income and those who are older. Additionally, health savings account contribution limits would also rise substantially, a change that mostly benefits those with higher incomes.
Further, many of the new taxes created under ACA would disappear under AHCA. Among others, gone are the taxes on some medical devices and the extra tax applied to investment income for very high income households. Finally, penalties imposed on certain employers for failing to offer “affordable” insurance plans are eliminated too.
Aside from the loud critique that the proposed AHCA simply looks too much like the existing ACA, the new plan’s decision to maintain many of the same benefits along with the repeal of taxes may have created a tall political hurdle for certain Republicans; a possible widening budget deficit.
Leaping this hurdle may prove difficult and might add some political intrigue. Passing the law may require the Republican leadership to either make the new AHCA more palatable to the conservative wing or require them to convince enough Democrats to vote for it. Democrats might pragmatically view the new AHCA as just close enough to the old ACA. After all, their acronyms alone look awfully similar! That’s politics for you.
Moving beyond the politics and into the realm of financial education, join Laverna Witkop at the Front Street Foundation’s Money Series on March 22 at 6:30pm in the McGuire Room of the Traverse Area District Library where she’ll speak about the nuances of the Affordable Care Act and your health insurance choices. Register at frontstreetfoundation.org or call (231) 714-6459.