The American Health Care Act requires that insurance companies abide by several regulations, which have had the effect of either driving up insurance costs for everyone or forcing companies out of the market.
- Obamacare contains two related mandates: 1) the mandate on insurance companies that they must cover pre-existing conditions; and 2) the mandate on individuals that they must carry government-dictated “essential, minimum” coverage. The two mandates are related because the guarantee that insurance companies will issue coverage to all, regardless of their health status, requires them to raise premium prices to the point that healthy individuals would simply opt not to pay for health insurance until the moment they needed it. The individual mandate was designed to offset this problem for insurance companies, by requiring healthy individuals to be in the insurance market continuously.
- The individual mandate is an affront to individual liberty and economic freedom and represents the biggest change in the relationship between the federal government and the individual in our nation’s history. Tea Party Patriots has opposed the individual mandate since before Obamacare was passed.
- Obamacare contains a second mandate on insurance companies, called “Community Rating.” Community Rating ends the insurance companies’ previous practice of assessing an individual policy-holder’s risk levels in determining the pricing of the premium, and replaces it with a requirement to offer policies within a certain geographic territory at the same price to all persons within certain age ranges. Under Obamacare, the cost of the most generous policy for older policy-holders can be no more than three times the price charged for the most generous policy for younger policy-holders. This has the effect of raising prices significantly for younger policy-holders.
- Obamacare contains a third mandate on insurance companies, called “Essential Health Benefits.” Every policy sold must contain coverage for 10 benefit categories, including emergency services, maternity and newborn care, mental health and substance abuse disorder services, and pediatric services, among others, whether the policy-holder wishes to include such benefits in the policy or not.
- These three mandates on insurance companies – “Guaranteed Issue,” “Community Rating,” and “Essential Health Benefits” – are the main reasons insurance premiums have spiked since the enactment of Obamacare.
- The American Health Care Act, the GOP-led healthcare bill, continues Obamacare’s mandate that insurance companies cover people with pre-existing conditions, regardless of their health insurance coverage in the past. The AHCA leaves the Essential Health Benefits requirement untouched. The AHCA also leaves in place Community Rating, but liberalizes the age ratio from its current 3:1 to 5:1.
- Because the AHCA leaves these three insurance company mandates intact, for the most part, it will do little to address the biggest concern most people have regarding their health insurance – skyrocketing premium prices.
- The American Health Care Act ostensibly eliminates the individual mandate, but it replaces the individual mandate with a new onerous regulation, requiring health insurance companies to charge 30% more for premiums for a year for those who allow their insurance coverage to lapse more than 63 days.
- The pre-existing condition mandate on health insurance companies means that, once again, we have a health care bill that allows heavy-handed government directives, rather than the free market, to determine coverage.
- The American Health Care Act misses an important opportunity to introduce market-savvy reforms, and instead clings to many of the worst aspects of Obamacare – including the regulations on the insurance industry, which will, necessarily, harm all Americans.
American Health Care Act One Pagers
American Health Care Act Summary
American Health Care Act Insurance Company Mandates
American Health Care Act Medicaid Expansion
American Health Care Act Advanceable, Refundable Tax Credits
American Health Care Act: Overriding the Senate Parliamentarian