How To Read The American Health Care Act, & Figure Out How It Will Affect You
Last week President Donald Trump and his administration released the initial draft bill of their proposed replacement for the Affordable Care Act (also known as Obamacare). The American Health Care Act, as with most bills of its kind, is a fairly long and complex document that touches both on repeals from its predecessor and introduces new content. Here's how to read the American Health Care Act and figure out how it will affect you — because it's not just about health insurance coverage.
The bill itself, while still technically in draft format, is available as a PDF and has been provided by the GOP for Americans to review. The House GOP also created a website (and accompanying hashtag: #ReadTheBill) that attempts to break down some of the bill's more complex concepts and language. The GOP also provides a lot of commentary about how the AHCA is different (and better) than Obamacare, but doesn't provide a direct link to the Affordable Care Act bill (available online as a PDF too, via the Department of Health and Human Services), which is helpful to have for the purpose of comparison.
Whether you're looking at the explainer or the bills themselves, there are a few key phrases to understand before jumping in. If you already have health insurance, you're probably familiar with a few terms like premiums, deductible, copayment, coinsurance, and in- and out-of-network coverage. Understanding how they apply to real life, however, can be difficult.
I mean, it's one cell phone, Michael. What could it cost, thirteen thousand dollars annually with a $200 per-visit deductible? pic.twitter.com/hkpqirQ12b— von (normal) rosceau (@VonRosceau) March 7, 2017
Two terms that are the foundation of health insurance are premiums and deductibles. As helpfully explained by Healthcare.gov's glossary, your premium is basically how much your plan costs per year, which is then broken down into monthly premiums that you pay every month. The other major cost is your annual deductible, which is how much money you pay for health services (like a doctor's appointment) before your insurance coverage will kick in. Whether you get insurance through work, you get it through the marketplace, or you're on a government insurance plan — deductibles are always there. Not all plans have the same amount of deductible, though. Plans with a higher deductible usually have a lower monthly cost, and those with lower deductibles tend to have a higher monthly cost, according to Healthcare.gov. And to further complicate things, not all the services you use your health insurance for will count toward your deductible — so you have to check your individual plan.
When you go to a doctor's office and give them your insurance card, they'll usually tell you how much your co-payment is for the appointment. Co-payments are set amounts that your insurer decides you'll pay for different services. Sometimes co-payments can be as little as $10-$15 for a visit, depending on your plan. Going to the doctor's office usually has a lower co-payment than, say, a trip to the emergency room. Once you meet your annual deductible, you usually don't have to make those co-payments anymore.
Sometimes people confuse co-payments with co-insurance, which is another type of payment that you make — and one that doesn't stop just because you meet your deductible. After you've met your deductible, you may not be paying co-payments, but you usually pay co-insurance. It's usually figured as a percent of what your insurance pays. So, if your insurance pays $100 for a doctor's appointment and you have a 20 percent co-insurance, you'll pay $20.
Depending on where you get services, you may have to pay more because your insurance will pay less. In-network providers are doctors who are in your insurer's network, which means those services are covered. Out-of-network providers are those who are not considered to be in your insurer's network. You still might get some coverage if you see an out-of-network provider, but it won't be as much as it would have been for an in-network provider, and you'll probably wind up paying more yourself. Even if you're seeing a doctor or going to a hospital close to your regular doctor, don't assume they're in-network: sometimes individual departments of hospitals may be "out-of-network" if they are contracted out to third-parties (like laboratories or radiology departments sometimes do), according to FairHealth.
Both the ACA and the AHCA are fairly long documents that are divided up into multiple sections and subsections. Often policymakers will refer to key points by their section number. In the AHCA, for example, Section 111 and 112 have been referenced directly because they refer to the repeal of the Medicaid expansion set forth in the ACA.
When words like "strike," "repeal," and "termination" appear in a section of the bill, that indicates that the bill intends to get rid of what's mentioned. They may also, in the next sentence or two, use words like "add," "amended," or "inserting" to show what their idea for replacement is. Words like "prohibited" come up too, and the most notable example in the ACHA is in one of the very first sections, which says clinics providing abortion services are "prohibited entities." That means they won't be eligible to receive government funding under the new bill. As many people have already figured out, that's essentially a reference to defunding Planned Parenthood.
The sections that are of most interest, and use, to the American people who are wondering if they'll have health coverage over the next few years are those that deal with subsidies, tax credits, and coverage. Under the ACA, there was something called the "individual mandate" that was meant to incentivize people to get covered. If you didn't sign up for insurance (or didn't have coverage through your job or your parents), you'd have to pay a penalty. The AHCA is getting rid of that mandate, which means people can choose to be uninsured. It should be noted, however, that choosing to be uninsured is not the same as people who will not be able to afford to keep or get coverage.
Millions of people were able to afford insurance plans under the ACA because of government subsidies. Subsidies are kind of like need-based financial aid: under the ACA if your income was at a certain level, you qualified to get a subsidy that meant you'd pay less. You might also hear about premium tax credits for health insurance, which are kind of like subsidies except the money isn't the government's — it's yours. If you qualified for a tax credit to help pay for the cost of healthcare, what that meant is that you'd get an advance on the money you would have been paid back in the form of a tax credit after filing your taxes, and that money could be used to pay for your insurance. With tax credits under the ACA, you could choose to use some, part, or all of that money toward buying insurance.
If you're looking at the AHCA, however, you'll notice that one of the things from the ACA it wants to get rid of ("repeal") are the subsidies. The AHCA will still offer tax credits for people who qualify, but the requirements to get a tax credit are different from the ACA. Under the ACHA (Sec. 201) tax credits will be available based on age rather than income. Everyone in the same age group will get the same tax credit regardless of how much money they make. People in their 20s will get less of a tax credit than people in their 60s — but people in their 60s often have higher medical costs, and they may or may not be able to get coverage through Medicare.
As the Kaiser Family Foundation has pointed out in its interactive map, under the ACHA many people will be getting less help through tax credits for buying health insurance. For example, a 27-year-old who makes $30,000 a year and lives in Queens, New York, will get $1,970 less under the ACHA than they did under Obamacare — a 50 percent reduction. On Monday, the Congressional Budget Office released its report regarding the projected economic impact of the ACHA's implementation and estimated that by 2020, 21 million Americans would be uninsured, and by 2026, that number could jump to 52 million.