Republicans are seeking to overhaul America’s health care laws, yet many remain uncertain as to what will replace Obamacare.
Some conservatives believe the government should not fund health care. Furthermore, they view insurance as an undesirable means to cover most medical expenses.
1. Increased state control
The Affordable Care Act’s combination of federal standards and subsidies with state regulatory authority resulted in significant improvements to insurance coverage nationwide. Unfortunately, its federalist structure – established through statute, altered through regulations and court decisions – has caused geographic variation on key performance indicators related to coverage and access.
State control over health care may not be reduced with a replacement that increases it. Raising federal minimum standards and expanding subsidies as an effective means to decrease states’ influence relative to the ACA could help address this disparity.
Similar, reducing federal funding to state governments could constrain their choices. This would prevent states from maintaining Medicaid expansions and preexisting condition protections in the individual market, potentially increasing the risk that young people in good health could opt out of participation.
2. Continuous coverage
Republicans may look into replacing Obamacare with continuous coverage, which allows individuals to keep their health insurance for an extended period of time despite changes in circumstances. This would provide vulnerable groups such as those with pre-existing conditions or low incomes the option of maintaining affordable healthcare coverage.
Furthermore, continuous coverage offers protection from gaps in coverage caused by unexpected events. It also helps people steer clear of large medical bills that could leave them financially strapped if they lack coverage.
The new AHCA plan would replace the individual mandate with a premium surcharge that people would pay if they don’t have health insurance. It is likely that this will make healthy people less likely to purchase coverage, leading to higher prices for those with chronic illnesses or other health issues.
3. Tax credits
Tax credits are state and federal subsidies that can reduce a company’s taxes. They can be used for various reasons, such as research and development, new equipment purchases or hiring disadvantaged workers.
To be eligible for a tax credit, you must meet certain requirements. A reliable tax software should help determine which credits you are eligible for and how to claim them.
Many Americans find a tax credit more advantageous than a deduction, as it puts more money in their pocket. According to Deborah Todd, CPA and president of iCompass Compliance Solutions, taking an income-based deduction reduces one’s taxable liability more quickly than using a tax credit does.
4. HSAs
HSAs (health savings accounts) allow you to set aside pretax dollars for qualified medical expenses. With your money, you can cover deductibles, copays and other out-of-pocket costs that insurance plans do not cover.
An HSA (Health Savings Account) differs from FSAs (flexible spending accounts). That means if you leave your job, retire, or lose health coverage, your HSA remains with you.
Additionally, rolling over unused funds from year to year allows you to build an investment portfolio specifically for health care expenses.
HSAs are a popular tax-saving option for higher income individuals, but they’re not the ideal solution to help low and middle-income Americans afford health care. The CBO’s analysis indicates that the BCRA’s new HSA provisions would effectively price most low-income enrollees out of the market entirely.
5. Medicaid expansion
The Affordable Care Act (ACA) seeks to expand access to health insurance for low-income Americans by encouraging states to expand Medicaid, offering private health coverage through online exchanges, and setting stringent regulations on insurers.
The Affordable Care Act (ACA) has extended Medicaid eligibility to millions more Americans, but many states have chosen against expansion due to concerns over cost and health outcomes.
Research has demonstrated that states participating in the ACA-expansion have seen their uninsured rates and health outcomes decrease. Furthermore, some studies have even discovered evidence to support that ACA expansions reduce racial disparities in health care access.
