A draft of a bill that could replace the Obamacare was “leaked” on February 16th.
The plan would use the tax code to create subsidies/tax credits for people to purchase health insurance plans in their state. The tax credits are not going to be based on household income, but on age. The draft gives insight on the amount of subsidies, which goes from $2,000 -$4,000 a year.
- Under age 30 would be eligible for $2,000 a year.
- Age 30-39 would be eligible for $2,500 a year.
- Age 40-49 would be eligible for $3,000 a year.
- Age 50-59 would be eligible for $3,500 a year.
- Age 60+ would be eligible for $4,000 a year
With health insurance premiums based on age, this looks to be a fairer subsidies system. For people with incomes in the 200%-300% of FPL, premiums would need to come down to insure it’s affordable. Changing the age bands, which plans are rated on, could help with affordability.
The draft also increases the benefit of health savings accounts. Essentially, it would allow the insured to save the health plans out of pocket max on a tax-free basis.
There is interesting information on grants for high risk pools. It looks like states would have flexibility with federal grant money, state could develop high risk pools or any health insurance purpose they wish. States would have a great deal of control on what health reform solutions they develop.
The draft, goes into Medicaid reform. The Federal government will fund 60% of the cost. This is a big difference from the 90%, the fed paid for the Medicaid expansion. The states that did not expand Medicaid are not losing federal dollars.
With the repeal of the ACA, there must be funding for this reform. The bill intends on tax employee benefits that exceed the 90th percentile in value. This may be difficult to get approved. The employee benefit industry, is fully aware of what will happen if group benefits become taxable. It will cause the erosion of employer sponsored health plans.
Indiana Health Insurance Company