11 Ways the GOP Health Care Proposal Could Impact Your Wallet

18,007 Views
Trumpcare
House Speaker Paul Ryan of Wis., center, speaks during a news conference on the American Health Care Act on Capitol Hill in Washington, Tuesday, March 7, 2017. AP Photo/Susan Walsh

On March 6, House Republicans released the long-anticipated plan known as the American Health Care Act that could potentially replace the Affordable Care Act, aka Obamacare.

While nothing in the bill has passed yet, there’s lots of buzz surrounding the proposal informally known as Trumpcare.

It’s not yet known how much the plan would cost overall or how many people would retain their health insurance if the changes become law.

But in case you’re wondering how the plan could affect you or your family, we’ve outlined some key changes, plus a few things that won’t change. Here’s what you need to know.

1. You wouldn’t pay a tax penalty for not having insurance — but when you finally decide to purchase insurance again, you could pay extra.

Under Obamacare, if you could afford health insurance but didn’t have it for three consecutive months, you face a tax penalty. According to NerdWallet, that penalty is whichever is higher: 2.5% of your total household adjusted income; or a flat fee of $695 for an adult, $347.50 for a child and up to $2,085 for a family in the 2016 fiscal tax year.

The proposed House Republican bill eliminates that tax penalty. It does, however, allow insurers to implement a 30% surcharge on your premium for a year if your coverage lapses for 63 days or more.

The 30% surcharge aims to encourage people to keep their insurance even if they’re healthy to help lower costs.

But if you opt to never get health insurance, you won’t pay the surcharge, whereas Obamacare penalizes you.

2. An insurer still couldn’t reject you, even if you have pre-existing medical conditions or a poor health history.

This part of Obamacare would remain intact. The new bill would not allow insurance companies to refuse you because of pre-existing health conditions or base your premiums on your health history.

3. …But insurers could charge you even more if you’re older.

The GOP plan allows insurers to charge older customers five times as much as younger ones, and states could set their own ratios. Under Obamacare, insurers can charge older patients up to three times as much as younger ones.

4. You’re more likely to qualify for tax credits, and that amount will increase with age.

If you earn $75,000 or less, or your household earns $150,000 or less, you’ll be eligible for tax credits. That means more people would be eligible for tax credits than under Obamacare, which only gives you subsidies if your income is under about $48,000 for individuals.

However, the amount of the credit will depend not on how much you make, but on how old you are. If you’re under 30, you’ll get a $2,000 credit. That credit gradually increases with age, eventually capping at $4,000 when you’re over 60.

Credits decrease by $100 for every $1,000 your income goes over the above thresholds.

5. You may no longer receive help with out-of-pocket expenses.

Obamacare offers subsidies to many lower-income individuals to help them pay for deductibles and copayments. Starting in 2020, these would no longer be available, according to The Wall Street Journal.

6. This bill allows adult children to stay on their parents’ coverage until they’re 26.

Thank goodness.

7. Even if you work for a large employer, it would no longer have to pay for your health insurance.

Large companies would no longer face huge fines if they don’t provide you with health insurance. Most reports say the plan is unlikely to change your coverage if you have an employer-sponsored plan. But still, if your employer did drop your coverage, it would become your responsibility to seek your own.

8. The plan would stop paying for new enrollees in the Medicaid expansion in 2020.

Thirty-one states and Washington, D.C. adopted Medicaid expansion under Obamacare to help cover those who don’t earn enough to afford health insurance. But according to The Washington Post, the federal government would no longer pay to cover new enrollees starting in 2020, although it would continue to cover those who remain enrolled.

9. If you purchase coverage under a plan that provides abortions, you wouldn’t receive a tax credit.

Even if you don’t get an abortion, just the mere fact that your insurance is willing to cover one would hit your wallet big time. The new bill would strip you of the $2,000 to $4,000 tax credit for buying one of these policies.

10. If you use Planned Parenthood, services might become more expensive or go away completely.

Under the GOP plan, federal funds for Planned Parenthood would disappear completely for a year. Current laws prohibit federal funding specifically for abortions, but the proposed bill would cut off all funding, including money that goes toward health screenings or supplying birth control at low costs.

On Planned Parenthood’s “Take Action” page, it argues that “2.5 million patients could be cut off from life saving care” under federal defunding.

11. You’d be able to save more money in a tax-free health savings account.

The new basic limit for an individual would be at least $6,550, and families would have a limit of $13,100, starting in 2018. This is an increase from $3,150 for an individual and $6,350 for a family allowed under Obamacare.

Your Turn: How would the GOP health plan affect coverage for you and your family? Let us know in the Facebook comments below.

Kelly Smith is a junior writer and engagement specialist at The Penny Hoarder. Catch her on Twitter at @keywordkelly.