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4 Ways The American Healthcare Act Could Hurt Families

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From his days on the campaign trail, President Donald Trump has always promised to repeal the Affordable Care Act — sometimes referred to as Obamacare — which was put in place by his predecessor. While the Affordable Care Act was an imperfect solution to the disparity in access to healthcare for the American people, millions of people were able to get health insurance through Obamacare. On Monday, President Trump revealed his intended replacement for the ACA, and many people are concerned that their families could lose coverage. Here are four ways the American Healthcare Act could hurt families.

On Monday evening, the House GOP released President Trump's bill for the American Healthcare Act, intended to be the replacement for the Affordable Care Act, which the GOP has been gunning to repeal since day one. The GOP also provided a fact sheet and FAQ for the public, since the bill itself is very long and full of legal jargon that most of us would have a hard time sifting through and making any sense of. The key takeaways from the bill are that it will:

  • Take away the subsidies that Obamacare put in place, which helped low and middle-income families pay for coverage
  • Eliminate the mandate requiring coverage for employers and individuals

But, there are a few things that are staying:

  • Young adults can still stay on their parents' plan until they turn 26.
  • Insurers can't deny coverage because someone has a pre-existing condition, and they can't impose lifetime caps on coverage

While the American Healthcare Act looks a lot more like Obamacare than it was expected to, there are some crucial ways in which it will be different, and some of these changes could pose challenges for families — especially if they are low-to-middle income.

What Insurance Won't Be Required To Cover

The bill specifically states that after Dec. 31, 2019 (when the full repeal of the ACA is meant to go into effect) insurance companies will no longer be required to cover what's laid out in Section 1302 of the ACA. So, what's in that section? Things that the ACA referred to as "essential benefits," like emergency room visits, lab tests, maternal and newborn care, prescription drugs, rehabilitation services, hospitalizations, and preventative/wellness checkups.

Since the ACA required insurers to provide a certain level of coverage, more people were able to access these types of healthcare services. Preventative care especially is vital, and not just for your kids: As we get older, there are a number of preventable and treatable conditions — not to mention several cancers — that can be detected through annual screenings.

Prenatal care is likewise not just important for new moms, but for keeping track of the health of a developing fetus — which may include detecting and preparing for any possible complications during labor and delivery, or spotting possible conditions that could put a newborn at risk.

How Tax Credits Will Work (Or Not)

Under the ACA, your family could get a tax credit based on your income, and that helped a lot of families afford the cost of their monthly premiums. That's gone under the American Healthcare Act, and will be replaced by tax credits that are based on age rather than income. Full tax credits will be available to individuals earning less than $75,000 a year (and households earning less than $150,000). But, for people under the age of 30, those credits are only going to be about $2,000 a year — regardless of income. That credit will go up by $500 each decade until one reaches 60, by which time it will have doubled. For many, those tax credits are not going to be as helpful as the subsidies provided by Obamacare, meaning they'll be paying more for (possibly less) coverage.

Under Obamacare, those subsidies were based on income, so lower-income families got more help, but the American Healthcare Act gives the same tax credits to anyone within a certain age group regardless of how much money they make. That means higher-income folks will benefit from tax credits that they don't really need, while lower and middle-income families may not be able to get enough. Obamacare used a family's income in relation to poverty levels to figure out how much of a tax credit they'd be eligible for, depending on how many people were in their family. If your family's income was between 100 and 400 percent of the poverty level, you were eligible for subsidies. As an example, for a family of 4, the maximum income cutoff to be eligible for subsidies would be around $97,000 a year under Obamacare. But the amount of subsidy that family got wouldn't have been as much as the subsidy a lower-income family of the same size would have been eligible to receive.

But Tax Credits Won't Apply If...

Of course, it should be noted that none of these tax credits can be used to pay for an insurance plan that would cover abortions. The American Healthcare Act also prevents Medicaid from covering any services provided by Planned Parenthood. It's worth noting here that Planned Parenthood hasn't used any government funds for abortions for decades as the result of the Hyde Amendment, and that the government money is primarily used for prenatal care, cancer screenings, birth control, and breast exams (and referrals to doctors who provide affordable mammograms). So, in other words, this will likely make it harder for low-income women to seek care through health clinics like Planned Parenthood.

Penalties For Having A Gap In Coverage

Say you or your partner plans to take a new job, and you're no longer going to have insurance through your current employer. It may be that you'll get on a new plan at your new job. You might be considering getting a plan through the private market — if you can afford it. Under the American Healthcare Act, if you take too long to get a new plan, you'll pay a penalty. If it's longer than 63 days — that's basically two months — you'll get slapped with a 30 percent surcharge on premiums for the first year of your plan.

The thing is, a lot of people are going to be switching plans as the ACA is phased out, and they may well get trapped in that coverage gap. And families especially would be wary of going uninsured, even if it would save them money. Kids often suffer more injuries and accidents just because they're kids, so to give up insurance in an effort to save money (or avoid higher costs that result from Trump's age-based tax credits) could mean they'd be responsible for the full cost of a trip to emergency room or doctor's office if a family member was hurt or sick.

While the bill still needs to be approved by Congress and signed by President Trump to be made official, it's been widely supported by the GOP since its inception, so it's just a matter of time until it's passed. It's a lot to try to unravel, and knowing how it could impact your family is an important thing to start thinking about now, as the bulk of the new provisions will go into effect in 2018 and 2019. You can start by using this great tool by the Kaiser Family Foundation to find out if you'll pay more under the American Healthcare Act than you did (or do) under Obamacare.