President45.doc. 6-17.

BACKGROUND. Obama Care based on a unitary approach that placed federal bureaucrats in charge of our health care. This travesty caused higher health care costs and less access to quality health care. Obama Care has driven several health insurance companies out of the marketplace in NE. Obama Care taxes and mandates have harmed job creation, increased insurance premiums, made insurance unaffordable for some, and severely limited options for patients and health care providers. Our health care system is collapsing, threatening to leave some Nebraskans without access to needed health care coverage. The American Health Care Act (AHCA), sponsored by President Trump and conservative congressmen, returns control of health care from Washington, D.C. to states and restores the free market system, so that Nebraskans can obtain quality, affordable health care options that serve varying needs. The AHCA will give control and choice to individuals and families who wish to select health care best for themselves. This plan will offer the freedom and flexibility that states, employers, and health care providers require to offer quality, reasonably-priced health care options.

HELPS EMPLOYERS. The bill would end the unpopular coverage mandates for employees at larger companies. Employers usually offer benefits to attract employees, not because of federal mandates. It will encourage businesses to hire additional full-time employees. Retail, restaurant, and agricultural businesses will benefit most. No longer fines for large employers who do not provide health plans. Unfair small business tax credit subsidies ended.

STATE BENEFITS. AHCA transfers decision-making by providing funding to and permitting states flexibility to handle expensive preexisting conditions, providing reinsurance and other stop-loss protections that allow insurers to function effectively, and trusting state insurance regulators to operate their markets. AHCA permits states to apply to the feds for waivers to change or eliminate the definition of essential benefits. States could prove that such waiver would reduce annual premiums, increase enrollment, stabilize the health insurance coverage market, or increase the choice of insurance plans in the state. The Trump Administration is eager to bestow waivers and block grant options. A total block grant amount for the initial FY bases on the state target per capita medical assistance expenditures for the FY multiplied by the number of enrollees in the category(ies) elected and the federal average medical assistance matching rate for the state for FY 2019. In future FYs, the total block grant amount for the prior FY increases by annual CPI for urban consumers. States can roll over unused block grant funds into the next FY, if they continue to use the block grant option. States must contract with a private company to audit their expenditures for each FY to ensure spending is consistent with these provisions. States must submit a plan to the HHS Secretary, deemed approved unless Secretary determines within 30 days that plan is incomplete or actuarially unsound. For states electing the community rating waiver, granted for 10 years, then extended, an additional $8 billion in Patient and State Stability grants allocated over 5 years, 2018-2023. States can use these funds to provide subsidies to help high-risk patients, promote access to preventive services, or provide cost-sharing subsidies. Community rating waiver states may use this additional allocation only to provide assistance to reduce premiums or other out of pocket costs of individuals subject to health status rating under the waiver. States can opt out of requiring the same premiums for all people of the same age, so there is no limit on the cost of that insurance. States could continue their exchanges, though many insurance companies have left them or refuse to participate.

POSITIVE POINTS. The plan permits adults up to age 26 to stay on parental plans. Younger, healthier people would see premium reductions that would make insurance more affordable and desirable. Their signing up would lower insurance rates nationally. Repeal of the individual mandate forcing people to buy health insurance or pay a fine. Obama Care standards for health care actuarial values and premium subsidies all repealed. Elimination of the Obama Care cost-sharing subsidies that lowered costs for only some poor Americans. Nebraskans with income from $40,000 to $75,000 who buy an individual insurance plan will benefit because of no requirement now to subsidize the poor. It modifies age rating limits to permit variation of 5:1, unless a state adopts different ratios, beginning in 2018. In 2020, $15 billion for maternity services and infant care, mental health, and addiction disorders. Provides supplemental funding of $422 million for community health centers for FY 2017. Repealed funding of the Prevention & Public Health Fund at the end of FY 2018. Short-term non-renewable policies can continue to set premiums based on health status. Such policies can continue to exclude pre-existing conditions. Requirements not changed for all plans to report transparency data and to provide standard, simple summary of benefits and coverage. Provides 5% federal matching funds for activities carried out by the state and approved by the HHS Secretary to implement work requirements. The bill specifically would prohibit insurers from engaging in anti-competitive practices, including price fixing, bid rigging, and market allocation that could hike health care costs.

MEDICAID. Medicaid would not change until 2020. Until that year, states that chose to expand Medicaid could continue to enroll people. In 2020, states will receive fed funding on a per capita basis. By converting Medicaid to a per capita allotment and putting the massive program on a budget, it would shield taxpayers from rapidly escalating costs, encourage innovation, and transfer power from Washington to state capitals. Medicaid eligibility restricted, with reduced federal support and caps on coverage. No longer required are mental health and addiction services. Limits growth in fed Medicaid spending beginning in 2020 by using 2016 as a base year. States have options to receive block grants. In states selecting Medicaid block grants, family planning no longer a mandatory covered service. Block granting Medicaid to the states through a per capita allotment will ensure that states retain flexibility to implement a system that best fits their individual needs. Eliminates option to extend Medicaid exchange coverage to adults above 133% of federal poverty level (fpl). States can require work as a condition of eligibility for non-disabled, younger, and non-pregnant adults. No Medicaid funding for Planned Parenthood clinics. $10 billion over 5 years (FY 2018 – FY 2022) to non-Medicaid expansion states for safety-net funding. Payments 100% funded by the federal government in FY 2018-2021 and 95% in FY 2022. Repeals increase in Medicaid eligibility to 138% of federal poverty level for children ages 6-19 as of December 31, 2019. The minimum federal income eligibility limit for these children will revert to 100% fpl. The federal deficit will drop, because major entitlement reform capping Medicaid spending will save taxpayers almost $840 billion. Medicaid financing reformed to send money to states based on population, prioritizing funding for the most vulnerable and economic recessions. Repeal of hospital presumptive eligibility provisions and presumptive eligibility for Medicaid adults. Require states to include lottery winnings (and other lump sum payments including gambling winnings and liquid assets from an estate) as income over a period of months to determine Medicaid eligibility for individual and spouse. States can intercept lottery winnings for Medicaid recoupment. Require states to limit home equity to federal minimum (removes the option to expand the limit from $500,000 to $750,000 (adjusted for CPI), effective 6 months after the bill enacted or longer, if states must pass legislation to change. Require eligibility redeterminations every 6 months for Medicaid-expansion enrollees. Increases civil monetary penalties up to $20,000 per individual for intentionally claiming Medicaid matching funds for an individual ineligible for expansion. Streamlining the funding process will ensure that Medicaid enrollees have access to more appropriate care, curtail waste, and promote more efficient allotment of resources.

MEDICARE. Repeals the Medicare payroll tax increase on high salaries and other Obama Care revenue provisions.
Authorizes an Independent Payment Advisory Board to recommend ways to reduce Medicare spending, if the rate of growth in spending exceeds a target growth rate. Establishes several quality, payment, and delivery system changes, including a new Center for Medicare and Medicaid Innovation to test, evaluate, and expand methods to control costs and promote quality care.

PLANNED PARENTHOOD. Complete defunding of Planned Parenthood, now funded mostly through Medicaid, for only 1 year. Subsidies cannot pay for health insurance that covers abortion.

INDIVIDUALS. Elimination of tax penalty for not having minimum essential coverage. Late enrollment penalty applied for special enrollments during the 2018 plan year, for all other enrollments beginning with the 2019 plan year.

TAX CREDITS. An efficient age-adjusted tax credit is superior to the Obama income-based credits. The bill implements an advanced refundable tax credit administered and based on a taxpayer age ($2,000 for individuals under 30 scaling upward for individuals over 60). Tax credits will range from $2,000 to $14,000 a year and will adjust to guarantee that older Americans receive proper support. The credit indexed yearly to Consumer Price Index inflation plus one percentage point and applies to the oldest five individuals in a family, used by anyone not receiving employee insurance or Medicare/Medicaid. U.S. citizens not jailed and not eligible for coverage through an employer plan are eligible. Premium tax credits individuals can use to buy qualified health plans sold outside Obama Care exchanges and for catastrophic policies but not for advance-payable or short-term policies. Married couples must file jointly to claim the credit. Eligibility for the tax credit phases out starting at income higher than $75,000. The tax credit reduced to zero at income of $95,000 for a single person up to age 29, $115,000 for those age 60 and older. For joint filers, credits begin to phase out at $150,000, reduced to zero at income of $230,000 for couples age 60 and older. Taxpayers also enrolled in qualified small employer health reimbursement plans that apply to non-group coverage will see their tax credit reduced by the amount of such benefit. States will certify plans eligible for the credit. Federal premium tax credits cannot apply to plans that cover abortion services, except to save the life of the woman or in cases of rape or incest. Disqualifies small employers from receiving tax credits, if their plans include such abortion coverage, effective in 2018. Poorer Americans will receive monthly, advanceable, and refundable tax credits to help pay for health care premiums. Tax credits empower the less affluent to make their own health care decisions in the private marketplace rather than relying upon inefficient and expensive government programs.

HEALTH SAVINGS ACCOUNTS. Increased contribution limits to HSAs to encourage their use. Here, you can set aside a portion of your income for medical expenses federal tax-free. $6,550 for self, $13,100 for family coverage, and indexed for inflation. The legislation permits spouses to make catch-up contributions. HSAs incentivize keeping health costs low. They allow people direct control over the funds, so that they can make health care decisions that best fit their needs in the most efficient way. Qualified medical expense definition expanded to include over-the-counter medications and specific expenses incurred up to 60 days prior to date HSA established. Tax penalty for HSA withdrawals used for non-qualified expenses reduced from 20% to 10%. Income threshold for medical expense deductions increased from 5.8% to 10%. No limit on contributions to Flexible Savings Accounts.

HIGH-RISK POOLS. States can use Patient & State Stability Fund grants to pay for high-risk pools. A federal reinsurance program will offset claims costs of particular high-risk individuals covered by participating individual health insurance companies. States will operate this program starting in 2020. The fund will make direct payments to health insurers in all states. The feds will designate a dollar threshold for claims for eligible individuals and a proportion of claims above that threshold that the feds will pay to insurance companies.

NEEDY PROTECTED. The AHCA maintains protections for those with pre-existing conditions by preventing insurers from using medical underwriting to deny coverage. However, those who do not maintain continual coverage would fall subject to underwriting and possible higher premiums if and when re-enrolling. Requirement not changed for individual and group plans to cover preventive benefits with no cost sharing. Prohibition unchanged on gender rating and on pre-existing condition exclusions, including pregnancy, prior C-section, and history of domestic violence. AHCA protects those with pre-existing conditions but accomplishes such without enormous price hikes for everyone else. After one year, any new entrant in the market must enjoy the same rates as those who have paid through their lifetime. Insurance companies banned from increasing premiums for or turning away patients from renewing their plans only because they are sick. $79 billion restored to hospitals that provide a high proportion of care to the most vulnerable.

LOWER TAXES. President Obama promised that the middle class would not see their taxes raised “by a single dime,” but the Joint Committee on Taxation found a $377 billion tax hike. Obama levied a tax for failing to buy government-mandated insurance, a tax on health insurance, a tax on medical equipment, a tax on innovative medicines, taxes on Health Savings Accounts and Flexible Savings Accounts, and a tax on those paying high medical bills. Repeal of all these and the annual fee paid by branded prescription drug manufacturers. Eliminated is the 3.8% net investment income tax on unearned income for high-income taxpayers and taxes on tanning beds and health insurers. AHCA will reduce federal spending while lowering taxes for Americans. It ends 14 taxes that siphon off almost $1 trillion from mostly middle-class taxpayers. Nebraskans, including middle-income and small business owners, will gain this tax relief. Those with incomes of $200,000 or more, or with investment income, will see a lower tax bill. Tax penalties associated with individual and large employer mandates reduced to zero.

ILLEGAL ALIENS. President Trump wants tight enforcement of immigration laws to lower health care costs. Bestowing health care on illegal aliens costs $11 billion yearly. Medicaid funding for illegal aliens totals $2.5 billion annually. Enforcing immigration laws and restricting the loose granting of visas could relieve health care costs for state and local governments.

HELPS INSURERS. The legislation increases coverage options for insurers by repealing actuarial standards in the Obama Care plan and allow changes to age-based ratings to give companies more flexibility over costs. States could seek waivers that would let insurers charge higher premiums for some people with pre-existing medical conditions.
Federal law permits the HHS secretary broad discretion to reinterpret federal law pertaining to what determines a qualified health plan, essential benefits, or innovation waivers for states. The Administration and secretary will reinterpret to save millions.

OPPOSITION. No Democrats will support the AHCA. RINO Republicans are balking. The leftwing AARP also voices opposition.

TAKE ACTION NOW. The AHCA creates a free market health care system that prioritizes taxpayer savings, personal consumer choice, less government interference, and innovation. Contact your congressman and two senators to support and vote for the ACHA. Email netaxpayers@gmail.com for Capitol Hill contact information.

Most of the taxes set up under Obamacare to pay for subsidizing insurance would be scrapped. The GOP proposal does not include any new tax to offset the loss of revenue.
Under the Affordable Care Act
* Insurance companies and medical device makers, which benefit from new customers under the law, pay more taxes
* Taxpayers with incomes over $250,000 are also taxed more under the GOP proposal
* Medical device makers, insurance companies and wealthy Americans would all receive a big tax cut as these taxes are eliminated
* The tax cuts total about $663 billion over the next decade.

Research, documentation, and analysis for this issue paper done by Nebraska Taxpayers for Freedom. This material copyrighted by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by other groups in the NE Conservative Coalition Network. 6-17 C.

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