PhotoHouse Republicans have released a long-awaited bill that would "repeal and replace" the Affordable Care Act (ACA), otherwise known as Obamacare. Consumers who have health insurance policies through the ACA exchanges may be understandably anxious about what it would mean for them.

If you'd like to read the bill for yourself, you may do so here.

As expected, the bill keeps some of the more popular provisions of the current law. Adult children can stay covered under their parents' policies until age 26. Consumers cannot be denied healthcare coverage because of a pre-existing condition.

For consumers who now have a policy under an expansion of their states' Medicaid coverage, there would apparently be little change. But it would be up to the state to determine the extent to which the coverage would continue.

Mandate eliminated

The replacement would end the requirement that everyone purchase health insurance and the financial penalty against those who do not. Health insurance companies pushed for that mandate under the original law, saying without it healthy people wouldn't buy insurance and the companies would only be covering the sick.

In place of the mandate, the replacement bill would allow health insurance companies to increase premiums by 30% on consumers who were uncovered by a policy for 63 days or more. That's designed to discourage healthy consumers from going without coverage until they are faced with an illness.

The replacement bill specifically eliminates the tax that was imposed to subsidize policies purchased on healthcare exchanges. That subsidy came in the form of an instant tax credit that reduced the monthly premium cost.

Tax credits

The replacement bill, without specifying how it would be paid for, gives tax credits to people with incomes under $75,000 a year who purchase private health insurance. It is not clear whether they would pay more or less out of pocket than they now do, which is obviously a key question consumers currently covered under Obamacare might ask.

Older consumers with private health insurance obtained under the replacement law would likely pay more. The ACA limits the amount insurance companies can charge older consumers to three times what they charge younger policyholders. Under the replacement law, that increases to five times what young people pay.

The outlook for "replace and replace" is far from certain. Conservative lawmakers' initial reaction has not exactly been favorable. Rep. Justin Amash (R-Mich.) called it "Obamacare 2.0" in a Tweet. Democrats can hardly be expected to support the repeal of President Obama's signature piece of legislation.

Hearings on the bill may begin in two House committees later this week. Stay tuned.


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