Replace Obamacare? What the New Plan Would (and Wouldn’t) Change for Americans

Paul Ryan holds up a copy of the American Health Care Act

House Speaker Paul Ryan holds up a copy of the American Health Care Act, the Obamacare replacement bill. | Chip Somodevilla/Getty Images

Republicans have had seven years to devise a plan for taking down one of their most hated pieces of legislation: the Affordable Care Act. Seven years, it seems, would be plenty of time to stitch together a cogent Obamacare replacement bill. Now, we’re finally getting a glimpse of their proposed “repeal and replace” strategy in the form of the American Health Care Act. There’s a lot to like or dislike about Obamacare. But repealing it without a plan in place would hurt millions of people.

So, will the American Health Care Act — the fabled Obamacare replacement bill from the Republicans — win everyone over? It doesn’t look like it.

The initial reaction to the bill hasn’t been good. Although President Donald Trump has come out in support of it, numerous Republicans have voiced strong opposition. Powerful conservative groups are making it clear they’re dissatisfied, including FreedomWorks, which is calling the proposed law “Obamacare Lite.” And obviously, Democrats are unanimously against it.

For these reasons, the American Health Care Act might be dead on arrival. If that’s the case, Republicans will have to head back to the drawing board.

The bill has a few goals: lower costs, expand choices, and give people more control over their health care choices. The issue, however, is the Republicans’ Obamacare replacement plan falls short in many areas. Experts are saying it could do more harm than good. As with any piece of legislation, it’s long, complicated, and difficult to comprehend. What should Americans expect to see if it actually hits the president’s desk and is signed into law?

Here are some of the key takeaways about how this bill would affect you, your family, and your wallet.

It would remove the individual mandate

Medical bill and health insurance forms

The individual mandate made sure you didn’t wait until you were sick to buy insurance. | iStock.com/everydayplus

Republicans are scrapping the most hated element of Obamacare: the individual mandate. This was the part of the law that required people to purchase an insurance policy or get hit with a fine (or tax). People hated this concept, but it was a pretty fundamental part of the law. It essentially made it so you couldn’t wait until you got sick to purchase insurance and then go to the doctor. The replacement plan gets rid of that, but it makes changes in other areas to make up for it.

It would reduce the number of insured

A couple meeting with their doctor

A couple meet with their doctor and try to figure out their insurance situation. | iStock.com

One of the biggest headlines you’ll see regarding the replacement bill is it would reduce the number of those insured. One of Obamacare’s chief goals was to get more people insurance. And with the way the replacement plan is structured, fewer people would actually remain insured. More than 20 million people get their insurance through Obamacare. As many as 10 million could lose it under the Republicans’ plan.

If you’re older, your costs could increase (a lot)

Grandparents and grandkids

The replacement would be more expensive for older people. | iStock.com

Here’s one of the biggest issues people have with the Republicans’ new plan. Older people tend to have more health problems, and as a result, they are more expensive to cover. Obamacare had rules that dictated how much more they could be charged — a ratio of 3 to 1. Under the new bill, that would rise to 5 to 1. In other words, health care is about to get more expensive depending on your age.

Tax credits would remain

A tax refund check

The new plan would keep tax credits in place to an extent. | Mark Wilson/Getty Images

Another essential part of the Affordable Care Act is the subsidies and tax credits that shuffle money around and help poorer people purchase policies. The new plan keeps that in place to an extent. But there would be a reduction. That is part of the reason why the number of insured would shrink. Eligibility would still depend on age and family size. A tax credit would be available “for low- and middle-income individuals and families who don’t receive insurance through work or a government program.”

Pre-existing conditions would still be covered

x-ray images of brain

The replacement still might lack younger, healthier people. | iStock.com

One of Obamacare’s most popular elements, the ability for young adults to remain on their parents’ policy until the age of 26, would be preserved. For obvious reasons, a lot of people liked this provision. But it did cause complications. The system depended on younger, healthier people to subsidize older, sicker people (hence the need for an individual mandate). With fewer younger people paying for insurance, there’s less to keep the system stable.

What about Medicaid?

Piggy bank balancing on seesaw against medicine

Medicaid expansion under the new plan would be phased out by 2020. | iStock.com/Pogonici

What happens to Medicaid under the American Health Care Act? Obamacare expanded the program to help cover more low-income families. Under the new plan, the Medicaid expansion would be phased out in 2020, when a freeze would be put on new enrollees. Other restrictions would be put on, as well. But the important stat is this: Of the 20 million people who gained coverage thanks to Obamacare, half of them did so thanks to the Medicaid expansion.

Tax cuts are included (for the wealthy)

The Wolf of Wall Street counting his money

The Wolf of Wall Street would be sitting pretty under the new plan. | Paramount Pictures

One major criticism of the new plan? It’s basically a giant tax break for the rich. But that is, in some ways, exactly what Republicans intended. In many ways, the rich subsidize the poor in America. And that’s true with health care, too. The Obamacare replacement would, as the Washington Post reports, lower taxes for households that make more than $200,000.

Copays and deductibles would rise

Broken piggy bank with coins and hammer

The new plan might break the bank in terms of copays and deductibles. | iStock.com/wpd911

What everyone is really wondering is whether this new plan would help curb the costs of deductibles and copays. This was a major problem with Obamacare. These costs have been rising for many households, and in some cases, it’s making health care completely unaffordable. Well, we don’t know for sure, but initial analyses indicate these costs might actually rise instead of drop.

Essential benefits and lifetime limits would remain

a man visits the doctor

The new plan would keep coverage for “essential” health care. | iStock.com

Obamacare put a few baseline things into place, most notably “essential benefits” and “lifetime limits.” This required insurance policies to include several “essential” coverage stipulations, such as covering costs related to prescription medications and hospitalization. Again, these are fairly popular. And the good news is the Republican plan intends to keep these essentials in place.

It doesn’t look like the plan would help those who need it most

Patient tells the doctor about her health

A patient tells the doctor about her health. | iStock.com/AlexRaths

Yes, this is a subjective take. But it’s important to try to take a look at the American Health Care Act as a whole and figure out whether it’s actually an improvement. By most measures, it doesn’t look like it. Many Republicans aren’t happy as it’s more or less a pared-down version of Obamacare. Democrats don’t like it because it’s fairly regressive. In its current state, it’s unclear whether the bill has a shot at passing. If it does, the American people would be in store for big changes.

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