Winners and losers: How the new health care plan could affect you

By Lynn Fulstone

Wednesday, March 15, 2017 | 2 a.m.

The journey to reform health care in the United States that began in the 1960s with Medicare continues with the American Health Care Act, the current version of health care reform purporting to “repeal and replace Obamacare.”

Obamacare, or the Affordable Care Act, went into effect in 2010 and is still in its infancy by a Medicare evolutionary timeframe. However, with the election of Donald Trump and the change in both the House and Senate majorities, we are being catapulted into reforming the American health care system once again, with the promise of “repeal and replace” in some form likely to be a reality. Whether this will be good, bad or ugly depends on your politics and points of view.

Although there is much uncertainty and controversy surrounding the bill, what is certain is that the current version of the AHCA that passed through the first two House committees last week will not be the final version of the legislation. In fact, if conservative Republicans have their way, this version would be scrapped completely and Obamacare would be repealed — period. A replacement would come later. Liberal Democrats also want to scrap the current proposal but leave Obamacare in place, and could end up voting with the conservative Republicans against the bill.

For now, some will likely love the AHCA while others will hate it in its current form. Here is why:

• Employers with 50 or more full-time employees may love it. The penalty for large employers that do not provide health benefits would be deleted retroactive to Jan. 1, 2016, although the “Cadillac tax” is still in play (pushed out to 2025).

• Small employers could hate it. Tax credits for low-wage small employers would be repealed effective Jan. 1, 2020. Effective in 2018, small-business tax credits cannot be used to purchase insurance plans that cover abortions (with Hyde Act exceptions for rape, incest and to save the mother’s life).

• Young, healthy individuals may love it and hate it at the same time. The tax penalty for not having minimum coverage would be deleted effective Jan. 1, 2016. However, if those young, healthy individuals let their coverage lapse and subsequently need insurance, they would pay a penalty equal to 30 percent of their premium in order to obtain coverage.

• Patients may love or hate it, depending on their age and income levels. Those on Medicare would likely not be affected. Premiums for older adults not on Medicare could be age rated at 5:1, rather than 3:1 as provided under Obamacare. All subsidies under Obamacare would disappear, but certain tax credits would remain based on age rather than income. These tax credits cannot be used for plans that cover abortion, but could be used to purchase catastrophic plans and any qualified health plans covering essential health benefits sold outside of the exchange, as well as qualified health plans on the exchange. Tax credits would not available to those who are not U.S. citizens, nor to legal immigrants, incarcerated individuals, and those covered through an employer plan, or Medicare or Medicaid.

• Hospitals and providers will probably not like it because the enhanced federal match for the Medicaid program would be eliminated as of Jan. 1, 2020. In addition, federal Medicaid financing would be changed to a per capita cap in FY 2020. Some “safety-net” hospitals may like it because Medicaid Disproportionate Share cuts would be repealed and there would be an additional fund for safety-net funding in nonexpansion states.

• Most everyone should love the prohibition on discriminatory premiums (e.g., pre-existing condition exclusion), extending dependent coverage until the age of 26 and increasing annual tax-free contribution limits for health savings accounts.

Provisions such as selling insurance across state lines, restricting drug prices and capping medical malpractice damages, or anything not related to federal spending or taxation, would have to be proposed in separate legislation to use the budget reconciliation process not subject to the filibuster in the Senate. Even so, there could be constitutional challenges to current provisions that deal with the 30 percent premium penalty for noncontinuous coverage and perhaps others. The Congressional Budget Office has estimated that 24 million Americans may lose health insurance by 2026 under the AHCA, which could dramatically affect how this bill takes shape. The CBO also predicts that although premiums will rise initially, the federal budget deficit will shrink by more than $300 billion over the next decade.

Lynn Fulstone is an attorney with the Fennemore Craig law firm of Las Vegas. A former medical technologist, she focuses her practice in health care law and commercial transactions. She also represents health care and insurance clients before the Nevada State Legislature and regulatory agencies.