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effects of trumps plan on those with preexisting conditions

Three million young adults up to age 26 could stay on their parents’ plan. This ACA provision was very popular with families and with the insurance companies.

  1. Those with pre-existing conditions could still get insurance. Companies still can’t withhold insurance from people who are sick. The federal government will pay $100 billion over 10 years to a Patient and State Stability Fund. States can use the Fund to increase tax credits. Some states might send the money to insurance companies who have a lot of very sick patients. The Congressional Budget Office estimates that the fund would help lower premiums by 20 percent after 2026. (Source: “The Congressional Budget Office Cost Estimate American Health Care Act,” CBO, March 13, 2017.)

Remove the individual tax on those who don’t buy insurance. That means people who don’t have insurance in 2017 won’t have to pay the penalty. The CBO estimates that 14 million people will drop their insurance coverage once they no longer had to pay the penalty. (Source: “CBO Cost Estimate American Health Care Act,” CBO, March 13, 2017.)

But there is a penalty for reapplying for coverage after being without it for more than 63 days. The insurance company can add 30 percent to premiums for a year when someone re-enrolls. That’s to discourage people from dropping their insurance to apply only when they become sick.

Removing the mandate will increase health insurance costs overall. The CBO estimated that premiums will be 15-20 percent higher in 2018 and 2019. That’s because insurance companies will raise them to make up for the premiums they lose when healthy people drop coverage. The mandate kept prices low because there were enough healthy people in the risk pool to pay for the sick ones. Without the mandate, many people will wait until they are sick before buying insurance. If only the sick bought insurance, insurance companies would not be profitable.