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Repeal and Replace: What You Should Know

When President-Elect Trump was asked about the Affordable Care Act (“ACA”) at his press conference yesterday, he asserted that “[i]t’ll be repeal and replace. It will be essentially, simultaneously. It will be various segments, you understand, but will most likely be on the same day or the same week, but probably, the same day, could be the same hour.” Immediately, voices started to speak up about the logistical impossibility of replacing such far-reaching legislation immediately, especially since the only alternative legislation that currently exists to be voted on is a bill written by Congressman Tom Price, Trump’s nominee for HHS secretary, which does not replace most of the most important protections of the ACA that provide health insurance to more than 20 million Americans.

Here are some key protections from the ACA that any replacement would need to address to maintain coverage for the 20 million plus Americans who gained insurance because of the ACA, including 15% of New Yorkers. There are many more consumer protections, and cost containing strategies created by the ACA that any replacement should address, but just understanding these three will help you evaluate if any “repeal and replace” plans will maintain insurance coverage. The following protections are not addressed by Congressman Price’s “Empowering Patients First Act.”

Creating a Federal insurance marketplace, and enabling state-based marketplaces, where individuals can purchase insurance plans using tax subsidies.

The Marketplaces created by the ACA, including HealthCare.gov and the New York State of Health Marketplace allow individuals to purchase health insurance. In New York State in 2015 (the last year with available data), 2.8 million people, or about 15% of the state, received their health insurance through the Marketplace. 

New Yorkers enrolled in private insurance plans through Qualified Health Plans and the Essential Plan, as well as the public programs of Medicaid and Child Health Plus. Of those, more than 95% received financial assistance, including about 69% who were enrolled in Medicaid at no cost. Any repeal of the ACA would eliminate their insurance coverage.

Requiring individuals to purchase insurance or pay a fine, in the form of a tax.

This requirement of the ACA has been reviled by many, but exists to broaden the risk pools of insurance companies. If everyone, even those who are healthy, have to pay premiums to the insurance companies, that guarantees profits for insurers, since on balance they can still take in premiums from people who do not use services. It is not clear how overall system costs will be lowered without this provision, since allowing people to choose to purchase insurance creates a market where healthy people do not buy insurance, causing the cost of insurance to rise.

No lifetime limits on coverage, offering insurance to all despite their pre-existing conditions, and no higher premiums for women.

Prior to the ACA, insurance companies had monetary limits, e.g. after a person receives $1 million in cancer treatment, the rest of the cost is on the individual, these were eliminated by the ACA. In fact, now plans have “maximum out of pocket” amounts, where after an insured person pays a certain amount beyond their premiums, from around $6,000- $17,500 for plans in New York, the insurance company pays for the rest of their covered care. Guaranteed issue, where insurance companies must accept all enrollees regardless of their pre-existing conditions has another benefit we don’t often hear about in the news. In New York State, prior to the ACA, insurance plans had to insure everyone, but if you had a pre-existing condition, they could refuse to pay for any care related to that condition. So you were “insured,” but the insurance wouldn’t pay for the care you needed relating to your condition. Look out for requirements to sell insurance to all regardless of pre-existing condition without the requirement to also cover care for those conditions.

Finally, insurance companies used to charge higher premiums for women, something that Congressman Price’s bill explicitly allows for again.

Congress is working on repealing the ACA this week, the Senate has already begun taking votes to allow a repeal measure to be passed. If your ability to purchase health insurance is impacted by any potential repeal of the ACA, look up your representatives in Congress and call or email them this week. This guide, written by former Congressional staffers, has clear advice about how to effectively get your elected representatives attention. Simply, tell them your story, and either thank them for supporting the ACA or ask them to make sure you stay insured.