Observers have long suggested that the most effective way for the GOP to repeal the Affordable Care Act of 2010 (ACA) is to introduce an alternative. In June, House Speaker Paul Ryan (R-Wisc.) unveiled the beginnings of a replacement. Here’s the least you need to know about the plan.
Individual mandate: Many Republicans for years have called for ending ACA’s individual mandate that requires all Americans to have some source of healthcare coverage. Not surprisingly, the GOP plan drops the mandate.
Medicaid expansion: The GOP plan would end ACA's Medicaid expansion and use some type of lump-sum payments for states to help them operate Medicaid. It also would allow them to add work requirements and premium payment requirements for able-bodied beneficiaries.
Exchange marketplaces: The plan unplugs ACA’s regulated insurance marketplaces and replaces them with an open market that allows consumers to buy health plans across state lines, offering them more choices.
Tax credits: A tax credit based on age would help consumers afford healthcare coverage, rather than the income-based subsidies offered through the marketplace exchanges under ACA.
Taxes on employer coverage: Today, neither employers nor employees pay taxes on their group health coverage plans—a model many believe skews the market toward higher-end policies. The GOP proposal aims to draw a line on where the benefits are no longer tax-free, but the actual dollar amount was not specified.
Pre-existing conditions: While ACA will not allow insurers to charge higher premiums to people with health conditions, the GOP plan seeks to modify the provision slightly. New standards would allow insurers to charge higher premiums for individuals who haven’t had continuous healthcare coverage. They still would not be able to deny coverage for pre-existing conditions, but they ultimately could charge more for lack of coverage.
Medicare eligibility: According to Forbes, the plan would gradually shift Medicare enrollment by increasing the age qualification from the current age 65 to age 67 by 2020. By the way, the recently released 2016 Medicare trustees’ report projects that Medicare will be broke in 2028.
Adults on parents’ plans: Young adults will be able to stay on their parents’ health plans until age 26, maintaining the status quo of ACA.
A cost estimate for the GOP plan was not included. The most recent Congressional Budget Office report states that ACA projected costs from 2016 to 2025 equal about $1.2 billion.