The New American Health Care Act
On March 6, 2017, the U.S. House of Representative Committee on Ways and Means proposed a list of changes to be made to the Affordable Care Act, commonly known as Obamacare. While it left many of common provisions intact, such as prohibition of denial of coverage due to pre-existing conditions, and letting young adults staying on parents’ insurance plan until age 26, there are important changes. Most of the changes are funding, premium, and subsidy related.
We attempted to summarize the proposed changes below. There are sure to be changes to the legislation, so this is accurate as of March 6, 2017. Great attempts are made to be as accurate as possible.
References:
US. House of Representative Energy and Commerce Committee, http://bit.ly/2mlOP75
US. House of Representative Ways and Means Committee, http://bit.ly/2lDP5zO
WHAT INDIVIDUALS NEED TO KNOW ABOUT THE NEW PROPOSED AMERICAN HEALTH CARE ACT
WHAT | WHAT IT IS NOW | WHAT IT WILL BE | WHEN |
PREMIUM & SUBSIDY | |||
Subsidy Payment | To Households with income <400% of federal poverty level | Repayment required if income > 400% during the year | Tax Years 2018 & 2019 |
Use of Subsidy | Exchange plans only | Exchange plans OK Non-Exchange plans OK Catastrophic plans OK |
Subsidy to discontinue in 2020 |
Young Adults | Premium was high to subsidize older adult | Premium will be lower Can stay on parents’ until 26 |
|
Older Adults | Was paying lower | Premium will be higher | |
Premium Surcharge | N/A | 30% premium surcharge if has a lapse in insurance coverage | |
Individual Penalty | Higher of $695, or 2.5% | $0, or 0% | Jan 1, 2016 |
Employer’s Insurance | Required to provide MEC* | Not Required | |
HSA* and FSA* | |||
HSA for OTC meds | Not Permitted without Rx | OK to use | Jan 1, 2018 |
HSA for Non-Medical Expenses | 20% Penalty | Proposed to be lower | Jan 1, 2018 |
HSA Annual Limit | $6,550 Self / $14,100 Family Catch-up Contributions OK |
Jan 1, 2018 | |
HSA Effective Date | Established Date of HSA | Date of HDHP* Taking Effect | Jan 1, 2018 |
FSA Contribution Limit | $2,500 | No Limit | Jan 1, 2018 |
NEW TAX CREDIT | |||
New Tax Credit to Purchase Insurance (including COBRA coverage)Tax Credit proposed to be advanceable, and refundable | N/A | Eligibility: No insurance through work, or government | |
Age <30: $2,000 Age 30-39: $2,500 Age 40-49: $3,000 Age 50-59: $3,500 Age >60: $4,000 |
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Max $14,000 per family | |||
Income Limit: $75,000 Single / $150,000 Joint |
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Phased out by $100 per $1,000 of income over above limit | |||
OTHER | |||
Medical Expense Limits for Itemized Deductions | > 7.5% for <65yo > 10% for >65yo |
7.5% for all | Jan 1, 2018 |
Medicare Tax | Previously increased by 0.9% | Reduced by 0.9% | Jan 1, 2018 |
Other | Medicaid Expansion to be reduced starting in 2020 |
Abbreviations: MEC (Minimum Essential Coverage), HSA (Health Savings Account), FSA (Flexible Spending Account), HDHP (High-Deductible Health Plan), COBRA (Consolidated Omnibus Budget Reconciliation Act)