The process of repealing Obamacare will impact 22 million Americans who were able to get coverage under the health law, and will also affect both current and future Medicare beneficiaries. Consequently, the abolishment will directly touch nearly everyone in this nation. So what’s at stake for health insurance in 2017?
The Affordable Care Act comprises 165 provisions that impact Medicare, ranging from improving benefits for current beneficiaries to building up its long-term financial resources to benefit future beneficiaries. Moreover, the program is susceptible to future cuts in order to fund the new health law.
These are the crucial areas of focus when it comes to evaluating the Obamacare Repeal:
Expanded Medicare Benefits
Since the start of 2011, beneficiaries of Medicare have been getting free preventive screenings like colonoscopies and mammograms. Obamacare also implemented free annual wellness visits.
Prior to Obamacare, Medicare beneficiaries had to pay a co-payment to avail of preventive screenings and tests as well as a percentage of the doctor’s bill. Bearing in mind that about 50% of beneficiaries had individual incomes of less than $24,150, the savings that they received with the expansion of Medicare benefits were significant.
The law also included provisions designed to close the coverage gap in Medicare Part D drug plans. For this year, the coverage gap starts once you spend a combined $3,700 on medication, and ends when your own spending reaches $4,950. Before the ACA, beneficiaries paid 100% of their drug costs. Today, it’s 51% for generics and 40% of brand-name drugs. By 2020, the donut hole is scheduled to close, and beneficiaries will be responsible for 25% of the generic drugs and brand name drugs they need after their deductible is met.
Medicare’s Stronger Finances
Republicans insist Medicare is already “broke”, but while the program’s spending rate has been increasing, its financial standing has actually improved. The Affordable Care Act implemented several cost-cutting provisions. On the other hand, the repeal of the ACA would lead to higher premiums and deductibles, which is, of course, bad news for the beneficiaries.
Millions of people now have government-subsidized health plans, largely thanks to the ACA. However, to be able to make this possible, the government had to raise the taxes of the rich, with a 3.8% tax imposed on specific net investment incomes as well as another 0.9% tax levied on individuals making over $200,000 annually (or $250,000 for married couples who file together.)
A large chunk of this tax hike will most probably disappear from any replacement plan, if you’re to take into account the desire of the Republicans to eliminate these new tax increases. However, since the Republicans also want to keep people covered while keeping premiums and deductibles low, it’s likely that they will cut funding in other programs like Medicaid and you guessed it – Medicare.
In a Nutshell
The American Health Care Act provides refundable tax credits based on an individual’s income and age. It gives states the ability to waive some protections for those who have pre-existing conditions and at the same time, allow insurance companies to charge higher premium rates to older consumers. Those whose coverage has lapsed are also levied a 30% surcharge on their insurance premium.
What all these provisions mean is that young, healthy individuals may be able to get cheaper health plans, while high-income Americans could get tax breaks and perks. It’s also possible for low-income Americans to lose their coverage, as the bill will end the Expanded Medicaid funding. Those with health issues may also discover that their policies no longer cover all their health care expenses, as individual states already possess the ability to allow insurers to offer skimpier plans. However, as with all political shifts, time will only tell as to how these changes actually affect the world of insurance and medical healthcare.
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