Jun 07, 2017

Among some of the things that Trump proposed to change, Obamacare was on the top of the agenda. While Republicans have been adamant about repealing it, they were no concrete plans available regarding how they intended to replace it. Luckily, more light has been shed in that department and the Republicans have proposed a number of ways, including the three mentioned below through which they intend to replace Obamacare.

1.     Improve Tax Credits

When it comes to purchasing health insurance individually, Obamacare has focused on allowing the use of tax credits to do so. However, the structure used for the tax credits is undergoing a change. Previously, individuals with lower incomes were entitled to get more help from the plan with not as many benefits being covered by insurance for higher income individuals.

In the new plan, the number of tax credits will depend solely on the age of the individual which means that the older the person, the more help they can expect to get. However, the more benefits they get, the more they can expect to be charged on it too. While it may offer lower premiums, certain plans that offer more benefits may be out of the budget for most people.

2.     Repealing Medicaid

Medicaid expansion was previously used in order to provide low-income individuals with medical insurance in over 31 states. Under this blanket, around 11 million people were insured 100% by the federal government. However, under the new proposed change, the funding for Medicaid is going to be cut down.

A budget on the funding is the main aim and states can choose from two options, including allotment of per capita that allocates a certain cost per person or a fixed grant that sets a chosen amount for all Medicaid participants. States will also enjoy more flexibility in allocating funds and it would largely be based on the total amount of people enrolled in the program. 

3.     Health Savings Accounts

Health savings accounts have been popularly utilized, enabling individuals to contribute certain amounts; tax free, on the basis that the amount goes towards the person’s medical or health care plan. In the proposed change, the total amount that can be contributed has been boosted.

Previously, those who were registered with the plan could contribute around $3,400 if they were single. Families could contribute around $6,750. The revised amounts for this plan now amount to the ability to contribute $6,550 for single individuals and around $13,100 for families. However, raising the threshold entails facing a loss in tax revenues.

Currently, the repeal is underway but there are still certain details that need to be hashed out before the changes are made official. Lawmakers have stated that the plan is still under analysis by the Congressional Budget Office. Moreover, the Republicans lack the 60 votes they required from the Senate in order to enact bigger changes in the law such as the strict rules in insurance that are currently viewed upon as a hindrance in making insurance affordable for one.

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