On May 4, 2017 the House of Representatives passed the American Health Care Act (AHCA) by four votes. The next day news outlets and social media were bombarded with articles stating that Congress hates women, the poor, the elderly, and anyone that has ever been sick. You probably read some of those articles, became infuriated, and shared with your friends on social media. The problem with these articles is that they are not true. There is a ton of misleading information out there that needs to be clarified. It’s time to find out...what exactly is in the AHCA?
Pre-existing conditions...can I still get insurance?
Yes! Under the AHCA you cannot be denied health insurance if you have a pre-existing condition. However, according to the MacArthur Amendment of the AHCA you can be charged more for having a preexisting condition depending on which state you live in.
Why does it matter what state I live in?
The MacArthur Amendment was added to the AHCA to empower states to choose if they want to eliminate three major regulations of the Affordable Care Act: Essential Health Benefits, Community Rating, and Age Rating. The waiver allows states to require fewer benefits in their plans, which is great for the healthy because they can purchase lower premium plans without all the bells and whistles required by the Affordable Care Act. But Americans with more complex health issues will mostly likely see an increase in their premiums. In order for states to be able to wave the essential health benefits, they must set up a high risk pool to help underwrite insurance for the uninsured or high risk.
What is community rating and why is it important?
If you have had a lapse in insurance coverage community rating is important to you because it prevents health insurers from charging more to customers with pre-existing conditions. Under the Affordable Care Act insurers could no longer evaluate a customer’s health record and charge according to their health status. The new bill will allow insurers to charge more to sick customers who have let their insurance lapse for more than 63 days. States that choose to waive community rating would be required to set up a program to help people with high healthcare costs buy insurance in what is called a high risk pool (essentially all the sick people would be lumped together to buy insurance at a higher price).
What is age rating?
Age rating is a set of rules regarding how much more insurance companies can charge older customers than younger ones. Under the Affordable Care Act the rule was set at 3x, meaning that an older customer cannot be charged more than 3x the cost of younger person. For example, if a young, 26-year old person costs $1,000, then a 64-year-old can only cost $3,000 in a 3x scenario. The new bill raises the limit to 5x difference, so if a young person costs $1,000, an older person could be charged up to $5,000.
A bigger age rating means that the young can see premiums drop, but older customers will see premiums rise and have overall more expensive plans. States would have to apply for the Age Rating waiver if they want to establish an even higher ratio under the amendment.
One thing to keep in mind is that tax credits are available to help with these costs - $2,000 for the young and $4,000 for the old.
The future of the bill is still unknown and it might take some time before we see this shake out. The next steps for the bill include a Senate vote and a scoring from the CBO. As it is currently written, the American Health Care Act would cause the number of uninsured to rise due to being priced out of the market. Most likely there are a ton of revisions to be made before the next vote. Take Command Health will be keeping an eye on their progress and we promise to keep you updated along the way.