How the American Health Care Act May Affect New Health Insurance Marketplace Coverage Options

The Republican bill that seeks to repeal Obamacare (the Affordable Care Act (ACA)) continues to be tweaked after the House of Representatives passed it on May 04, 2017. Called the American Health Care Act (AHCA), the GOP bill intends to expand consumer choice and decrease public healthcare costs.

However, it may produce unintended negative effects on coverage, policy prices and the number of insured or underinsured. Here’s what hospitals need to know about the possible impacts of the AHCA on new health insurance marketplace coverage options.

Essential Health Benefits May Vanish

While Obamacare protects 10 essential health benefits, the AHCA does not, as it authorizes states to ask for a waiver that will enable them to define their own essential health benefits by 2020.

AHCA’s Impacts on New Health Insurance Marketplace Coverage Options

A significant consequence is that insurance providers would unlikely cover benefits for diseases with expensive treatments or if they will, the price would be extremely high for many consumers. The federal government may be reducing its healthcare costs with AHCA but the out-of-pocket medical expenses of many Americans will most likely increase.

Pre-Existing Conditions Would Lose Protection

The AHCA can result in the worthlessness of coverage for pre-existing conditions. You may have cancer as part of your policy but if treatments like chemotherapy are not covered, then the policy is useless to you. Patients would have a harder time paying for their medical bills as comprehensive treatments are excluded in future coverage options.

Insurers cannot deny coverage directly to individuals with pre-existing conditions; however, the AHCA allows them to charge higher premiums. In connection, states can ask for a waiver from the ACA's community rating provision that prevents insurers from charging sick people higher insurance than those with better health.

To obtain the waiver, states would acquire money from the Patient and State Stability Fund to fund solutions to the problem of expensive health insurance coverage, such as the development of high-risk pools, which aim to diminish costs for sick people. A recent report from the American Association of Retired Persons (AARP) discovered that premiums may reach more than $25,000 per year for high-risk pool participants. The AHCA has allocated $138 billion for these pools to control costs. However, experts assert that this amount is insufficient to cover pre-existing-condition treatment costs.

Tax Credits Would Fall

Under the AHCA, subsidies will depend mostly on age, while tax credits shall be decreased for the highest earners. The new healthcare bill will cut the amount of money people may get to pay for their insurance, a system that is in favor of the youngest and healthiest enrollees. Particularly, those who are 30 and under will pay only $2,000 a year, whereas those who are 60 and above will pay double this amount.

Medicaid Would Take a Hit

The AHCA would significantly alter Medicaid by eliminating Obamacare's expansion that offered coverage to an additional 10 million people with low income. People who are part of the expanded Medicaid program only have three more years as enrollments are guaranteed only up to 2020.

Beyond this year, states can freeze the program and possibly cut it further. The AHCA plans to decrease federal Medicaid costs by around $840 billion for a decade which may result in benefit reductions for 74 million Americans who depend on it, particularly low-income beneficiaries. Affected Americans will rush to find new health insurance marketplace options and would need ample assistance to get proper coverage.

The AHCA may adversely impact not only the most disadvantaged - the poor, the sick and the elderly - but also the middle class with pre-existing conditions. To help patients get sufficient assistance in wading through the complex changes once AHCA becomes law, consult with a company that can help patients access new and better coverage. A medical eligibility management services firm can screen them for eligibility and provide strong direction in accessing suitable coverage options.


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Robert Griffin

Robert is the Business Development Manager at DECO Recovery Management. He covers the Southeast region and specializes in ACA related topics. It is DECO’s Mission to maximize reimbursement to our clients by leveraging innovative technology, processes and compassionate advocates to provide exemplary service.

Categories: Affordable Care Act