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What You Need to Know About the AHCA

Judges Gavel And Medical Equipment On Black Wooden BackgroundBilled as a “replacement” for the Affordable Care Act, House Republicans have now released their American Health Care Act (AHCA). However, “replacement” isn’t an entirely accurate term, since the AHCA will retain some aspects of the ACA while eliminating others.

The Act is far from being signed into law, and might undergo some changes during that process, but the following changes are considered key aspects of the new proposal.

Some things will likely stay the same. As we mentioned, the AHCA won’t completely repeal all of the ACA. Some aspects of the older healthcare act will likely remain in place, such as:

  • Those with pre-existing conditions cannot be discriminated against by insurers
  • All applicants will be offered coverage, regardless of health status
  • Young adults can stay on their parents’ insurance plans until age 26
  • Lifetime and annual out-of-pocket limits remain
  • Open enrollment periods stay the same
  • Federal funding for Medicaid will continue in those states that chose to extend Medicaid coverage, until 2020. At that point, funding will be based upon a fixed amount, not the cost of services

Quite a few changes are in store. With those basic provisions in place, the AHCA also promises more than a few key changes to nationwide healthcare law:

  • Those who do not purchase health insurance will not face a tax penalty
  • There will be no mandate requiring large employers to provide health insurance to employees
  • The limit on premiums charged to oldest enrollees, is changed from three times to five times the premiums charged to youngest enrollees
  • A late enrollment penalty of 30 percent (of premiums) can be charged to those whose health insurance lapses 63 days or longer
  • Premium tax credits and cost-based subsidies are replaced with an age-based tax credit
  • The 0.9 percent Medicare payroll taxes on high wage earners, and the 3.8 percent unearned income tax on high-income taxpayers will be repealed
  • Contribution limits for Health Savings Accounts will be increased
  • No more annual limits to health Flexible Spending Accounts
  • The Cadillac tax is suspended for years 2020-2024

Again, the AHCA is far from passing into law, and might be altered to some degree before it is finalized. We will keep you updated on changes to healthcare law, so that you can anticipate the potential impact on your health insurance plan.