On May 4, the U.S. House passed the American Health Care Act with a narrow 217-to-213 vote. The bill represents the first phase of a three-part strategy to overturn the Affordable Care Act, also known as Obamacare. Because Republicans have only a simple majority in the U.S. Senate and not a 60-vote filibuster-proof majority, the phase one bill is a reconciliation bill, dealing with only the financial and budget aspects of the ACA.
Phase two provides Health and Human Services Secretary Tom Price the ability to overrule the 1,440 discrete regulatory measures in the ACA. Phase three requires bipartisan votes in Congress to overturn the remaining features of the ACA.
While the Affordable Care Act has unquestionably helped some people, it has been a dismal failure at reaching its goals. Obamacare has not come close to providing universal health insurance, it has caused health insurance premiums to rise dramatically, and it has forced millions of people out of their existing insurance into government-controlled plans.
The original AHCA bill that was introduced earlier this year was not acceptable to some moderates and some conservatives in the House. Consequently, it underwent changes before a formal vote was taken. The bill retains some features of the ACA but more importantly repeals many of the failing parts of Obamacare.
The bill would expand our freedom by ending the individual and employer mandates and would eliminate virtually all of the taxes imposed by the ACA. It would provide a generous refundable tax credit of up to $14,000 per family to help low-income people buy health insurance.
The AHCA would expand tax-free health savings account (HSA) contributions to $6,550 per year for individuals and $13,000 per year for families, further expanding people’s ability to pay for care.
The bill would reform Medicaid. States would receive per capita federal grants and would have more control to make the program work better for their citizens. This would be the first major entitlement reform in decades.
States could receive waivers to change several insurance mandates in the ACA. For a state to receive a waiver, it must show it will decrease insurance premiums, increase the number of insured, stabilize the insurance market, stabilize premiums for people with pre-existing conditions and increase the number of plan choices in the state.
The bill would provide $138 billion for high-risk pools and insurance market stabilization. The AHCA would use high-risk pools to cover people with pre-existing conditions. When properly funded, high-risk pools are very effective at financially protecting high-cost and high users of health care without forcing everyone else to pay higher insurance premiums.
We’re just getting started on comprehensive reform that will benefit all Americans. The U.S. Senate will craft its own bill. Most, if not all, Democrats in the Senate say they will oppose the new bill, and moderate and conservative Republicans will seek compromise with the House.
For now, Obamacare remains the law of the land. However, passage of the new AHCA is a good start at meaningful health care reform that includes lower costs for everyone while caring for the most vulnerable people in our country.
Roger Stark, a retired physician, is a health policy analyst for Washington Policy Center.
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