Benefits Insights, Summer 2017
This spring, the House passed the American Health Care Reform Act (AHCA) of 2017, a bill aimed at changing portions of the current health care system. Though their initial attempt at passing a reform bill failed, the House later made a series of amendments that gained support from certain conservative groups while maintaining backing from moderates. Here is a look at what could be expected under the AHCA as it stands now:
- Individual Mandates: Continuous coverage would replace mandates as the new requirement. Failure to keep coverage may result in a 30% premium increase.
- Essential health benefits: States would now determine the base level of coverage that insurance carriers are required to offer.
- Pre-existing Conditions: States would be allowed to decide whether insurance carriers can charge more for people with pre-existing conditions.
- Cost assistance: Tax credits would be provided to individuals who need help paying for their insurance. This would be based on the person’s age rather than income.
- Age rating ratio: The ratio would increase from 3:1 to 5:1, meaning that carriers can charge older demographics five times more for insurance than a person of a younger demo.
- Tax deductions: People may be able to deduct the full cost of their health insurance premiums from their federal tax returns each year.
The bill will now need to pass the Senate, who is expected to revise some of the language. If the Senate passes a version of the AHCA, the House must again vote before the bill goes to the President. The AHCA would take effect beginning January 1, 2018.