New Health Care Act titled the American Health Care Act

The House Republicans released the bill for a new Health Care Act titled the American Health Care Act on Monday night(March 6, 2017). The new health care law will repeal and replace major portions of the Affordable Care Act popularly known as Obamacare.

The bill repeals major portions of the Affordable Care Act which included individual mandate and most of the taxes that Obamacare imposed. The new legislation calls for providing refundable tax credits based on a person's age and income. But the new law did not repeal two popular features of Obamacare. One of them is that insurance companies need to insure people with pre-existing conditions, and another allowing young adults to remain on their parents’ insurance plans until they are 26 years old.

American Health Care Act  VS Affordable Care Act
Both Obamacare and the proposed GOP plan help people afford policies by providing refundable tax credits that are paid in advance to insurers. Those buying plans on the individual market are eligible, but those covered through their jobs or the government are not.
There are some significant differences. Obamacare's subsidies are based on enrollees' incomes and cost of coverage in their areas. The Republican tax credits vary with age, ranging from $2,000 for 20-somethings to $4,000 for those in their early 60s.


But Obamacare and the Republican plan both have income caps. An enrollee making more than $47,500 does not qualify for assistance under Obamacare. If the GOP plan becomes law, those making more than $75,000 would see their tax credits start to phase out, and an enrollee making more than $215,000 would no longer be eligible.

Unpopular Provision of the Affordable Care Act or ObamaCare

Perhaps the most unpopular provision of the Affordable Care Act popularly known as ObamaCare is the Individual Mandate. ObamaCare’s individual mandate requires that most Americans obtain and maintain health insurance, or an exemption, each month or pay a tax penalty. The mandate's purpose is to draw young and healthy Americans into healthcare market. Without this provision, they might be unwilling to buy any health plan, thinking that they do not need any health coverage. But their participation is very important to balance out the higher costs of older and sicker enrollees, whom insurers are required to cover under Obamacare.

The individual mandate went into effect at the beginning of January 2014 and continues each year. The penalty for not having coverage will be paid on your Federal Income Tax Returns for each full month you, or a family member doesn’t have health insurance or an exemption and is based on your Modified Adjusted Gross Income (MAGI).

Depending on your coverage, income, and family size, you will either pay a flat dollar amount or a percentage of income above the tax return filing threshold for your filing status. The fee is capped at the national average for a Bronze health plan available in the marketplace, and it is only paid for full months you or a family member went without coverage. The fee went up each year from 2014–2016 making it more important to look into coverage and exemptions options each year.

For the 2014 tax year, you'll pay the greater of these two numbers: A. 1 percent of your household income above $10,000, up to a maximum of $2,448 per person; or B. $95 per adult and $47.50 per child, up to a family maximum of $285. For 2015, the penalty for no health insurance is $325 per person or 2% of your annual household income – whichever is higher.

The annual fee for not having insurance in 2016 is $695 per adult and $347.50 per child (up to $2,085 for a family), or it’s 2.5% of your household income above the tax return filing threshold for your filing status – whichever is greater. You’ll pay 1/12 of the total fee for each full month in which a family member went without coverage or an exemption. The fee for 2017 hasn’t been published yet.