The door has finally opened and the Senate draft bill, the Better Care Reconciliation Act, has emerged. So far, a host of conservative and moderate Senators have indicated that they won’t vote for it. The draft is broadly the same as the House bill with some notable modifications. What make the BCRA different and what is in it for you?
One of the most widely publicized provisions in both is the elimination of the individual mandate. People would no longer be required to purchase health insurance or face an IRS penalty. The Trump administration has already directed the IRS to ease up on the enforcement of the mandate. Although the mandate is generally disliked, the idea is to spread the risk to the insurers and reduce the cost of the plans to all. Without the mandate, it is likely that costs will rise.
If you’re under age 26, you could stay on your parents’ health insurance plan. This popular provision of the ACA is part of both the House bill and the Senate draft. Keeping young adults on employer sponsored health plans does help to limit the premium increases.
If you’re under age 65, aren’t covered by an employer plan and are looking for health insurance, things could get a little dicey. In the AHCA, you would see tax credits to pay premium based on age, not income, and max out at $4,000, much less than under the ACA. The oldest people under age 65 could be charged five times more than the youngest people, unlike the ACA where the maximum is three times more. Depending upon the state, the percentage could be even higher. In the Senate draft, the oldest people under age 65 would pay five times more than the young people. Subsidies to help pay for insurance would end at income of 350 percent of the poverty level, with adults age 59-64 paying up to 16.2 percent of income. Health insurance would become significantly more expensive for those under 65 should either of these bills become law.
Under the ACA, those individuals with pre-existing conditions must be covered and can’t be charged more. That would change under either the House bill or the Senate draft. Under the AHCA, states would be able to secure permission to let insurers charge more for some pre-existing conditions, and exclude some people altogether. The BCRA requires the insurance companies accept everyone regardless of health status. That said, states would be allowed to reduce coverage, thereby limiting “essential health benefits”. This would give insurers some leeway in what they offer in their plans and possibly change what they charge consumers.
In order to fund various ACA provisions, a 3.8 percent wealth tax has been imposed on corporations and investment income for those individuals with $200,000 in modified adjusted gross income (MAGI) and couples filing jointly with $250,000 in MAGI. Both the House bill and the Senate draft would repeal this tax.
These are just a few of the alternative provisions of ACA, AHCA, and BCRA, that could impact you and your family. While it is unlikely that either of these bills will pass in their present form, you should keep up-to-date with what’s happening. Open enrollment is just around the corner and you’ll have decisions to make.