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The American Health Care Act 101: A primer on what the bill passed by the House would do if enacted into law

UPDATED: Thu., May 4, 2017

Rep. Cathy McMorris Rodgers, R-Wash. walks into the House Chamber on Capitol Hill in Washington, Thursday, May 4, 2017. (Andrew Harnik / Associated Press)
Rep. Cathy McMorris Rodgers, R-Wash. walks into the House Chamber on Capitol Hill in Washington, Thursday, May 4, 2017. (Andrew Harnik / Associated Press)

The House of Representatives on Thursday passed a revamped bill to replace the Affordable Care Act, also known as Obamacare.

This is the second effort by congressional Republicans to pass a sweeping health care bill that would undo or change many parts of Obamacare.

The U.S. Senate must pass the bill before President Donald Trump can sign it into law.

The bill has not been scored by the nonpartisan Congressional Budget Office, so it’s unclear how much money it might cost or save. Also unknown: how many people would gain or lose coverage under the act.

The CBO scored the first Republican bill, which had some similar provisions, and found it would increase the number of uninsured Americans by 24 million by 2026, lower the federal deficit by $337 billion in a decade and reduce premiums for young, healthy Americans while increasing them for seniors and sick people.

Here’s what the new American Health Care Act would do.

Pre-existing conditions: Under Obamacare, insurers cannot deny coverage for people with pre-existing conditions or charge them more for coverage.

This bill changes that on a state-by-state basis. States that set up high-risk pools – subsidized markets for sick people to get coverage – could choose to let insurers charge more to insure sick people.

High-risk pools allow people with pre-existing and expensive health conditions to buy state-subsidized insurance. The bill allocates $8 billion to states to subsidize high-risk pools, and another $130 billion to states which could be used to fund pools, among other things.

The Kaiser Family Foundation, a nonpartisan health policy think tank, found high-risk pools in place before Obamacare were expensive to maintain and likely insured only a fraction of people who were unable to get individual coverage due to pre-existing health conditions.

Their analysis suggests the current bill does not provide enough funding to cover many of the people who could lose coverage due to pre-existing conditions.

Essential benefits: All health plans under Obamacare have to cover a basic set of benefits, including maternity care, prescription drugs, mental health treatment and hospitalization.

The new bill would allow states to get rid of those rules and set their own requirements for plan coverage.

Coverage under age 26: Children could still stay on their parents’ insurance plans until age 26 under the new bill.

Seniors: Currently, insurers can charge seniors up to three times as much as they charge their youngest customers. This bill would allow insurers to charge seniors up to five times as much. Individual states could set an even higher ratio.

Coverage mandates: Obamacare requires people who can afford health insurance to buy it. Instead of mandating coverage, the bill would penalize people who have been uninsured for more than 63 days with a 30 percent surcharge on their premiums, for one year, when they do buy coverage.

Obamacare also requires employers with more than 50 employees to offer coverage to full-time employees. This bill would get rid of that rule.

Tax credits: Under Obamacare, Americans can receive a tax credit toward the cost of buying individual insurance based on income. The bill would use age, rather than income, to determine subsidies, effectively benefiting wealthier and older Americans. Credits would be lower for high-income Americans: people making over $75,000 a year and families making over $150,000.

Medicaid: Thirty-two states expanded Medicaid coverage under Obamacare. Those states would continue to receive federal funding as they do now until 2020. Then, cuts would kick in.

Right now, Medicaid is an entitlement program, meaning anyone who qualifies can enroll and get coverage. The bill ends that, giving states a fixed amount per person using Medicaid. States could also choose to take a block grant to cover Medicaid costs.

Total Medicaid cuts would total $880 billion over 10 years, according to the New York Times.

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