Like Obamacare, But Worse: The GOP ACA Healthcare Bill Explained, Part 2

Feb 28, 2017; Washington, DC, USA; Speaker of the House Paul Ryan (R-WI) greets Vice President Mike Pence before President Donald Trump addresses a joint session of Congress at the U.S. Capitol. Mandatory Credit: Andrew P. Scott-USA TODAY

So, the Paul Ryan plan. In their proposal, people would be able to drop their coverage, just like they can now under the ACA. But they would not have a tax penalty for doing so.
Their proposed plan also continues to prevent insurance companies from denying coverage or charging you more for preexisting conditions. So the insurance still can’t deny you if you get cancer during an uninsured period and then show back up at their office to buy a policy before you start treatment.

However, if you did decide to go back and buy a policy after a break under the Ryan plan, your insurance company will be allowed to charge you *30 percent more* in premiums, for a year, when you come back in. For the same policy.

Don’t misunderstand this plan – if it passes, people will still have to pay an individual mandate penalty. But under their plan, you’re paying it to an insurance company rather than the government. And there is no cap on how high that penalty can go.

So my hypothetical situation this time is that I’m a family of four who pays $1200/month for my family’s coverage on the exchange. Let’s say that I lose my job abruptly and have to drop our policy for a few months so we can keep our house.

Under the ACA, I can jump back in and buy a new plan for – hypothetically – about the same premium during the next open enrollment period, and I’d still pay about $1200 a month, minus any subsidies my family would receive for our drop in income. I’d have to deal with that tax penalty, but once I took care of that I’d still only have to pay $1200/month (or less) to cover my family for the foreseeable future.

Under the Ryan plan, I wouldn’t have to do anything special on my taxes, but my insurance company could now charge me $1560.00 a month for my family’s new premiums, even though others would pay $1200 for the same plan.

And remember, under the Ryan plan, you get no monthly subsidy no matter how low your income drops after you lose your job and your insurance for a few months. So instead of paying $1200/month **most likely minus a subsidy** once you get back on your financial feet, you’d be paying $1560 a month for a year, as a penalty.

That would work out to a penalty for noncoverage of $4320.00 per year.

Oh, and you’d be paying that directly to the insurance company.

Next: Like Obamacare But Worse: The GOP Bill Explained Part 3

Both of these plans have penalties. They just look much different and are paid to different entities.