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3 ways the American Health Care Act would change insurance in California




PASADENA, CA - NOVEMBER 19:  A healthcare reform specialist helps people select insurance plans at the free Affordable Care Act (ACA) Enrollment Fair at Pasadena City College on November 19, 2013 in Pasadena, California. The event, sponsored by the Chamber of Commerce and the Los Angeles Association of Health Underwriters, offers one-on-one sessions with insurance experts certified by Covered California to help people enroll for healthcare coverage under the ACA.  (Photo by David McNew/Getty Images)
PASADENA, CA - NOVEMBER 19: A healthcare reform specialist helps people select insurance plans at the free Affordable Care Act (ACA) Enrollment Fair at Pasadena City College on November 19, 2013 in Pasadena, California. The event, sponsored by the Chamber of Commerce and the Los Angeles Association of Health Underwriters, offers one-on-one sessions with insurance experts certified by Covered California to help people enroll for healthcare coverage under the ACA. (Photo by David McNew/Getty Images)
David McNew/Getty Images

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House Republicans introduced their long-awaited plan to replace the Affordable Care Act yesterday. They're calling it the American Health Care Act

https://twitter.com/FoxNews/status/839167841089695744

Two committees in the House will begin the process of approving the bill with votes today. But not all Republicans are on board with the bill in its current form. 

https://twitter.com/justinamash/status/838889979501760514

So, how could the new GOP plan for healthcare insurance change things for us in California? 

To find out, Take Two's A Martinez spoke with Chad Terhune, Senior Correspondent at Kaiser Health News.

1. Medi-Cal expansion phase out

(Lt. to Rt.) Edwin Bernal, 9, finished homework, while his brother Angel Lozano, 5, watches videos before school at their home in Los Angeles, Friday January 20, 2017. Last year Edwin was among a group of undocumented children, who qualified for Medi-Cal coverage through a state funded program. His brother is covered because he was born in the United States. His mother fears that under the Trump administration the program will be in danger and he will no longer have medical coverage. (Photo By Maria J. Avila/CalMatters)
(Lt. to Rt.) Edwin Bernal, 9, finished homework, while his brother Angel Lozano, 5, watches videos before school at their home in Los Angeles, Friday January 20, 2017. Last year Edwin was among a group of undocumented children, who qualified for Medi-Cal coverage through a state funded program. His brother is covered because he was born in the United States. His mother fears that under the Trump administration the program will be in danger and he will no longer have medical coverage. (Photo By Maria J. Avila/CalMatters)
Maria J. Avila/CALmatters

Medi-Cal, the Medicaid program here is massive. It covers 1/3 of all Californians. It covers half of all births in the state. It's a 100 billion dollar program when you put all the state and federal money together. And it has certainly grown under the Affordable Care Act with a big expansion. It's added about 5 million Californians since 2014. And nearly 4 million of those came under the expansion. The expansion was very attractive to states because the federal government was picking up most of the tab. About 95% of the expansion is paid for by the federal government. 

This Republican plan would freeze that starting in 2020 and then lower the funding. So, people who got Medi-Cal under the expansion could stay but no new people under the expansion after 2020. Starting in 2020, those people could stay on, but the funding drops. And then eventually, I think the Republican idea is that those people start to drop off the Medi-Cal program as people get jobs they cycle in and out of the program so over time, the overall cost of the program would drop. That's the real focus of the Republicans. They want to slow down the growth of Medicaid nationally and decrease monies that have to go into that program.  

2. Restructured premium subsidies 

Volunteer Julia Torrano helps Estelle Day, 79, style her hair while she's a patient at UCLA Medical Center.
Volunteer Julia Torrano helps Estelle Day, 79, style her hair while she's a patient at UCLA Medical Center.
/Ina Jaffe/NPR

The Affordable Care Act or Obamacare as many people call it, really puts most of the money on a sliding scale. So, people who are lowest income– say people who are $20,000 a year– they get the most help. And then as you go up from there, you get less subsidy.

This Republican plan is really a dramatic reduction in where that money is going– who gets the most help. They opt for a simply, across the board subsidy or tax credit based primarily on age.  And it ranges from $2,000 to $4,000 a year. So, if you're 20-years-old, you get about $2,000. If you're in your 40's, you get about $3,000. Up to 60-years-old, you would get  $4,000.

Under this new system, some people could lose up to $8,000 to $12,000 a year in premium subsidies... There are winners and losers here but in terms of lower income people and older consumers, they would lose money under the republican plan. 

3.  Continuous coverage v. mandate 

Covered California sent postcards to 100,000 households statewide, letting consumers know the tax form they already received was wrong and to wait for a new one.
Covered California sent postcards to 100,000 households statewide, letting consumers know the tax form they already received was wrong and to wait for a new one.
Photo by 401(K) 2012 via Flickr Creative Commons

You want as many people in the pool to spread the cost. Healthcare and health insurance is expensive. You want as many people paying into the system as possible so that we can pay for our neighbor who has cancer. OR when we get hit by a bus and land in the hospital. The idea is that no one wants to pay for health insurance so you need a requirement, particularly for those young and healthy people who think nothing's ever going to happen to them. You needed to require them to have health insurance and you needed to have a penalty. So when you filed taxes, you have to pay a penalty if you didn't have health insurance. 

A lot of people didn't like that– government telling me what to do. So, Republicans ripped that out. No individual mandate, no penalty. And they've come up with another way to come at it and it's called ‘continuous coverage’. If you don't have coverage for more than 63 days, if you try to come back in, you'll pay a penalty on your health insurance. Not to the IRS, but you would pay 30% more on your health insurance for one year. That would be the new penalty. 

*Quotes edited for clarity

To hear the full interview, click on the blue Media Player above.