House Republicans unveiled Monday the American Health Care Act, their long-promised plan to replace Obamacare. The bill is similar to, and arguably more generous than, a draft that leaked a few weeks ago, and conservative members are already denouncing it as “Obamacare Lite.”
- Keeps the extremely popular provisions barring insurance companies from discriminating against people because of their preexisting conditions and forces them to continue allowing young adults to stay on their parents’ plans until they’re 26
- Does away with the much-loathed individual mandate
- Keeps Obamacare’s Medicaid expansion until 2020
- Contains tax credits
It’s this last point that will determine whether people on the individual market are richer or poorer under Ryan/Trump/PriceCare than Obamacare. Unlike Obamacare, which determined subsidies for insurance by income, the new plan would weight the tax credits by age and then phase them out in increments by income.
Under the GOP’s plan, a 30-year-old would receive $2,000 to put toward insurance, and a 60-year-old would get $4,000. But the important thing is that those amounts would apply to anyone who makes up to $75,000 (or $150,000 if it’s a married couple filing jointly). After that threshold, they would titrate down in 10 percent increments. (Vox’s Sarah Kliff has a more thorough rundown here.)
Compare this to Obamacare, under which people who earn more than about $48,000 don’t get any subsidies—no matter how old they are. As I’ve interviewed Trump supporters at the inauguration, in Pennsylvania, and in Tennessee, I’ve found that many of them make just over that threshold, and they’re angry that Obamacare doesn’t seem to take them into account. If they earn, say, $60,000, they don’t feel rich—in fact, their incomes are about average for American households—yet they can’t afford health insurance. They’re also resentful that people on Medicaid are getting something for nothing. Perhaps that’s one reason why people who earned between $50,000 and $100,000 were more likely to vote for Trump.
A comparison tool released by the Kaiser Family Foundation (based on the February 10 draft of the GOP plan) shows that in most of the country, a 40-year-old making $50,000 would be better off with the GOP’s age-rated tax credits than they were under Obamacare’s:
Of course, the new GOP plan also allows insurers to charge older people five times as much as they do younger people. That might not matter for the 40-year-old making $50,000, but it will almost certainly eat up the extra funds a 60-year-old making the same amount would receive under the GOP plan.
Because of that, older people in that $50,000 to $75,000 band might not actually find cheaper premiums under the GOP plan than they did under the Affordable Care Act. Still, they might feel they’re getting some help—any help—from the government, where before they received none, and feel less resentful as a result.