A top priority for the new administration was to propose a plan changing the Affordable Care Act.  Many taxpayers believed that new changes would remove the penalty for not carrying health coverage.  The IRS informed taxpayers that they must still carry insurance as it is the law.  But when filing they could choose to not check the box confirming coverage and their return would not be rejected.  The IRS will request proof of health coverage from taxpayers individually.  The new plan unveiled by House Republicans creates tax credits for Americans and puts a stop to the ACA individual mandate.  Republicans state the American Health Care Act will drive down costs, encourage competition and would offer every American affordable healthcare.

What the proposed plan offers:

  • The new bill eliminates the individual mandate requiring Americans to obtain health insurance or pay a penalty.
  • To help Americans purchase health insurance an age-based tax credit will be created.  The proposed tax credit would range from $2,000 to $4,000 depending on age.  With this credit, a verification process exists for employed individuals that shows they do not have access to coverage through their employers.
  • State expansions to Medicaid will no longer continue as of January 1, 2020.  Medicaid is a government program that provides medical coverage to low income families and individuals.
  • The new bill proposes to stop government funding to Planned Parenthood.  The organization can continue to receive funding under the condition to no longer perform abortions.

What the proposed plan does not change:

  • Two provisions from Obamacare that will remain on the proposed bill include
    • Americans with pre-existing conditions will not be denied coverage.  But this new plan gives insurers the opportunity to charge higher premiums if coverage lapses to individuals covered.
    • Another provision the new plan proposes is to allow young people to remain on their parent’s health insurance until they reach the age of 26.
    • New proposed plan will strengthen the individual insurance market.  The new plan will allow insurers to charge older adults up to five times as much as younger adults.  With the Affordable Care Act insurers currently can only charge insured’s three times as much in premiums.