The American Health Care Act

March 7, 2017

Last night, the House released its replacement bill for the Affordable Care Act, the American Health Care Act. This bill makes significant changes to the health care system, and keeps some parts of the Affordable Care Act in place while ending others and changing the way others work. Here’s what we can say about the bill’s impact on the Prevent Cancer Foundation® priorities so far:

Changes to subsidies and mandates

The new bill eliminates the “mandate,” which required that everyone have insurance or they would pay a tax penalty.  Instead, it allows a 30 percent increase in the insurance premium for anyone who goes for more than 60 days without insurance. This could include someone who is laid off and unable to afford COBRA payments, or who was unable to afford insurance and was dropped.

The new bill also changes the way subsidies are distributed to make insurance more affordable. Right now, subsidies are offered to those below 400% of the poverty level and the amount of the subsidy is dependent on how much insurance costs in your area. So, for instance, if the only insurance plan on the exchange in your area is for $800/mo, you would receive more money than someone whose insurance premium was $500/mo, so that you would both pay the same amount. Under the new plan, individuals and families would receive a flat tax credit no matter the cost of insurance. The tax credits are as follows for everyone making below $75,000 for an individual, or $150,000 for couple filing jointly:

  • $2,000 for those under 30
  • $2,500 for those between 30 and 40
  • $3,000 for those between 40 and 50
  • $3,500 for those between 50 and 60
  • $4,000 for those over 60

These would be phased out slowly for those making above $75,000 or $150,000 a year. This would provide more money for those at the top of that bracket, but would be significantly less assistance for anyone making less than $40,000—or for those in rural areas, where health insurance usually costs more money.

To see more about how this change will affect people in your region, you can visit the Kaiser Family Foundation’s interactive map, a valuable resource.

Ends the Prevention and Public Health Fund

This bill would eliminate the Prevention and Public Health Fund, and cut the budget for the Centers for Disease Control and Prevention (CDC) by over 10 percent. The Fund provides grants to community outreach programs engaged in health education, tobacco cessation, and that provide cancer screenings to underserved communities, programs that are in critical need of support. Eliminating this Fund will also cut funding for the federal vaccines program by half, a program that currently helps doctors in certain regions purchase vaccines at a reduced cost and mobilizes responses to outbreaks. As our Think About the Link® program emphasizes, vaccines against the human papillomavirus (HPV) and hepatitis B can prevent numerous cancers including cervical, anal, oropharyngeal and others for HPV, and liver cancer for hepatitis B.

In addition to providing funds for cancer screening and prevention, the Prevention and Public Health Fund pays for other crucial programs as well. The Fund is the sole budget source for the CDC’s program that reduces hospital acquired infections.   

While there have been criticisms of the amount of money spent on the Prevention and Public Health Fund, it saves money—and lives—in the long run. Preventable diseases such as diabetes, heart disease and some cancers cost the American economy over $1.3 trillion in medical costs and lost productivity. Additionally, every 10 percent increase in spending on prevention and public health can lead to a 1-7 percent decrease in deaths from preventable causes. Prevention saves money and lives.  You can take action here to protect the Prevention and Public Health Fund.

Maintains coverage protections

Many of the insurance regulations and protections authorized by the Affordable Care Act will stay in place. Individuals can still stay on their parents’ insurance until age 26, there will be no lifetime caps on insurance coverage and the anti-discrimination rules will stay in place.  Most importantly, the new bill will guarantee insurance coverage for pre-existing conditions.  There will be a penalty of a 30 percent increase in the premium for someone who has a gap of 60 days or more in their insurance coverage, but this applies to anyone regardless of pre-existing conditions. 

The bill also maintains requirements that insurance cover essential health benefits—such as vaccines, mammography, colonoscopy and other preventive services—at 100 percent with no cost-sharing. We know that cost is the number one reason given for not getting screened for cancer, and so covering these services help to increase screening rates. The coverage for essential health benefits also guarantees that standard treatments such as chemotherapy will be covered at 100 percent if someone is diagnosed with cancer. These coverage protections are incredibly valuable, and we’re relieved that they have stayed in place.

Eliminates tax on tanning salons

The American Health Care Act eliminates many of the taxes that were implemented in the Affordable Care Act. Among them is a tax on tanning salons. The argument is that the federal government should not be making the decision of whether or not adults are using tanning salons, and that this unfairly penalizes an industry.

However, indoor tanning increases the risk of melanoma. Using an indoor tanning facility only once increases the risk of melanoma, the deadliest skin cancer, by 59 precent, and the risk of squamous and basal cell skin cancers by 67 percent and 29 percent respectively. In fact, a recent study showed that indoor tanning facilities increase health care costs by $343 million annually in the United States, due to the increased rates of skin cancer. Maintaining this tax not only raises revenue to pay for badly needed programs, it can discourage a practice that leads to greatly increased skin cancer rates.

Significant changes to Medicaid

Since the Affordable Care Act went into effect, 11 million people have gained access to insurance coverage through Medicaid expansion. The Affordable Care Act expanded Medicaid to anyone making less than 138 percent of the poverty line for states that chose to take advantage of the program; 31 states and the District of Columbia have expanded the program.  The new legislation will keep the Medicaid expansion only until 2020, after which the program will be frozen. Anyone who has Medicaid at that time will stay enrolled in the program, but no new individuals or families will be able to sign up.

Additionally, after 2020 the legislation will significantly shift the Medicaid program. Right now, Medicaid covers all of an enrollee’s medical bills, although usually at a lower reimbursement rate than private insurance or Medicare, meaning that several doctors do not accept Medicaid. The payment for the bills comes from a combination of state and federal funding. Under this bill, it will change to a “per capita” payment—the federal government will provide a certain amount of funding for each person enrolled in Medicaid, no matter how many medical services they use, and the State can decide how to spend those funds. This per capita spending would also be capped.This fundamentally changes the program and can greatly limit what Medicaid is able to cover, or further decrease what the program will pay for services, resulting in even more doctors refusing to participate.

Medicaid expansion has helped people around the country, particularly in rural areas where the poverty rates are higher. Medicaid now also pays for preventive services such as regular cancer screenings, and treatment for hepatitis B and C. Further limiting who is on Medicaid and cutting what the program pays for will end up harming those who are already struggling.

Overall Insurance Coverage

We don’t know how many people this bill will cover compared to the Affordable Care Act.  The House has scheduled committee votes this week, but the American Health Care Act was only introduced last night, and the Congressional Budget Office (CBO) has not had a chance to fully score the bill. Because of that, we can’t say what this bill’s final impact will be on the deficit, what it will cost the average American, or how many people will gain or lose coverage. However, initial estimates from independent analysts say that this bill could lead to 10 million fewer Americans having insurance coverage, due to the changes to Medicaid and the changes to the subsidy program. Whether or not someone has insurance coverage is one of the biggest factors in whether or not they will get screened for cancer, and such a high decrease in coverage means fewer people will be screened. 

Hearings on the American Health Care Act will begin this week, and the CBO score should come out in the near future as well. There are some good pieces, such as the coverage for essential health benefits and pre-existing conditions, but eliminating the Prevention and Public Health Fund and such significant changes to the Medicaid program are concerning.  We’ll be watching any potential changes to the bill, looking to see the CBO score and pushing to protect the Protection and Public Health Fund. Check back this week for updates.

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