House Passes Obamacare Replacement: 5 Reasons You’ll Pay More With the American Health Care Act

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This article was originally published on March 7, 2017, and has since been updated to reflect new information.

President Trump previewed health care policies in the works in his recent address to Congress.

And after weeks of negotiations, Republicans narrowly passed the bill with a vote of 217 to 213 in the House of Representatives.

While the bill is sure to undergo major revisions in the Senate, its passing gives us some insight into the changes to come.

Features of the new plan, called the American Health Care Act, include:

  • Continuing to allow parents to cover adult children on their insurance until age 26.
  • Rolling back penalties for the uninsured.
  • Allowing states to opt out of 10 previously mandated health benefits.
  • Repealing the requirement for employers with 50 or fewer employees to provide health insurance.
  • Replacing income-based subsidies with age-based tax credits.
  • Enacting a deadline of 2020 on the Medicaid federal expansion.
  • Cutting funding to Planned Parenthood and limiting health insurance coverage for abortions.

The central aims of the plan are to “drive down costs, encourage competition, and give every American access to quality, affordable health insurance,” House Speaker Paul Ryan, R-Wis., said in a statement.

Opponents of the bill, including House Minority Leader Nancy Pelosi, D-Calif., say it delivers tax cuts to the rich and healthy. And it cuts assistance to high-need and low-income enrollees. “Republicans have decided that affordable health care should be the privilege of the wealthy, not the right of every family in America,” said Pelosi.

5 reasons you’ll pay more with the ACA replacement

The American Health Care Act still needs to get passed by the Senate before it’s finalized. But in its current state, it seems some of the 20 million Americans currently covered under the ACA will become uninsured, according to AP News.

And it is already clear some people will pay more for insurance under the new plan. If you’re not covered through your employer and have an ACA marketplace plan, you will be affected by these new policies.

But will you pay more? Here are some signs that you’ll probably face higher health care costs.

1. You’re low-income

Under the ACA, 11 million Americans earning up to $16,400 a year have free health coverage under the Medicaid expansion, according to CNN Money. The new health plan would provide some assistance for poor enrollees. But these tax cuts would be tied to age rather than income.

Overall, health care assistance available to low-income Americans through Medicaid, subsidies, and tax cuts would be much smaller, according to the Kaiser Family Foundation.

2. You have a pre-existing condition

Since the American Health Care Act’s introduction in March, policymakers added an amendment that allows states to opt out of some previously required benefits. Under Obamacare, insurance carriers had to provide certain services. Some of these services included:

  • Emergencies
  • Maternity care
  • Mental health and substance abuse
  • Rehabilitation
  • Preventative care
  • Pediatric services

Under the new plan, states can seek waivers for insurers who don’t offer these services. Plus, states could opt out of the mandate that prevents carriers from charging people extra for pre-existing conditions.

So, if you have a preexisting condition or need services like maternity or mental health care, you could end up paying a lot more under the new plan.

3. You rely on subsidies to reduce premiums

ACA subsidies help those above the poverty line afford health care premiums. If you rely on these subsidies, you are likely to pay more under the new plan. It will end government subsidies that helped reduce individuals’ health insurance premiums.

Enrollees living in high-premium states – Alaska and Arizona, for instance – receive subsidies scaled to their higher costs. But the new tax cuts are based on age alone, not local costs. People who relied on subsidies from the ACA to pay for their state’s sky-high premiums will have less help to cover these costs. This map tool compares the difference in tax credits Americans would receive under the ACA and the new Republican health plan.

4. You’re over 50

Older Americans will also receive less health care assistance. Even though the age-based tax cuts give those ages 60 and over the highest break, at $4,000, it’s still less than what they receive under Obamacare.

Insurance premiums will also increase. Under the ACA, insurers cannot charge older enrollees premiums greater than three times the cost of plans for younger, healthier participants. The replacement bill would charge seniors five times more than younger participants, reports CNN Money.

This would raise premiums by $2,100 annually for the average 64-year old, according to a report from the AARP. Around 400,000 seniors will lose coverage as a result.

5. You have high health costs

Another ACA rule that will be done away with are the plan coverage requirements that dictate how much coverage plans had to provide. With these regulations gone, insurers will likely expand their selections again, including offering high deductible, low-premium plans. For those who are healthy and can afford to choose a plan with a high deductible, this could result in lower premiums.

Enrollees who are sick and rely on their insurance to cover their costs often need low-deductible plans. Without these guidelines in place, plans that provide sufficient coverage could be harder to find and more expensive.

Who will pay less with the ACA replacement?

It’s hard to know exactly how these rules will affect health insurance markets, and there are disagreements over whether insurance premiums will increase or fall.

But some people who rely on ACA health plans are more likely to see their costs fall under the American Health Care Act rules:

  • Younger enrollees will likely face lower premiums and more health care assistance.
  • Healthy people will be able to buy cheaper, catastrophic health insurance.
  • Higher-income enrollees who don’t receive assistance might benefit from lower premiums.
  • Enrollees in areas with lower premiums might get more assistance than they did under the ACA.
  • People who save through tax-advantaged health savings accounts can now contribute twice as much to these accounts.

Beyond health plans, repealing the ACA also rolls back taxes on the very rich, giving them a huge tax cut. The top one percent will keep $33,000 more a year, according to CNN Money. And the top 0.01 percent would get an average tax cut of $197,000 a year.

The American Health Care Act isn’t final

The bill is far from final, and likely to undergo changes if it has a chance of getting voted into law. But it’s final enough that House Republicans managed to secure a favorable vote.

Many lawmakers in the Republican Party are feeling pressure from their constituents to deliver a smart, cost-cutting health care bill.

Whether you favor or oppose the new health care plan, there’s still time to contact your senators to let them know what you think.

Rebecca Safier contributed to the reporting for this article.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderAPR RangeLoan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal Loans: Fixed rates from 6.990% APR to 14.865% APR (with AutoPay). Variable rates from 6.255% APR to 12.555% APR (with AutoPay). SoFi rate ranges are current as of September 1, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.255% APR assumes current index rate derived from the 1-month LIBOR of 2.08% plus 4.425% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

    To check the rates and terms you qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull.See Consumer Licenses.
  2. Minimum Credit Score: Not all applicants who meet SoFi’s minimum credit score requirements are approved for a personal loan. In addition to meeting SoFi’s minimum eligibility criteria, applicants must also meet other credit and underwriting requirements to qualify.
  3. SoFi Personal Loans are not available to residents of MS. Maximum interest rate on loans for residents of AK and WY is 9.99% APR, for residents of IL with loans over $40,000 is 8.99% APR, for residents of TX is 9.99% APR on terms greater than 5 years, for residents of CO, CT, HI, VA, SC is 11.99% APR, and for residents of ME is 12.24% APR. Personal loans not available to residents of MI who already have a student loan with SoFi. Personal Loans minimum loan amount is $5,000. Residents of AZ, MA, and NH have a minimum loan amount of $10,001. Residents of KY have a minimum loan amount of $15,001. Residents of PA have a minimum loan amount of $25,001. Variable rates not available to residents of AK, TX, VA, WY, or for residents of IL for loans greater than $40,000.
  4. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Includes AutoPay discount. Important Disclosures for Payoff.

Payoff Disclosures

  1. All loans are subject to credit review and approval. Your actual rate depends upon credit score, loan amount, loan term, credit usage and history. Currently loans are not offered in: MA, MS, NE, NV, OH, and WV.

3 Important Disclosures for FreedomPlus.

FreedomPlus Disclosures

  1. All loans available through FreedomPlus.com are made by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. All loan and rate terms are subject to eligibility restrictions, application review, credit score, loan amount, loan term, lender approval, and credit usage and history. Eligibility for a loan is not guaranteed. Loans are not available to residents of all states – please call a FreedomPlus representative for further details. The following limitations, in addition to others, shall apply: FreedomPlus does not arrange loans in: (i) Arizona under $10,500; (ii) Massachusetts under $6,500, (iii) Ohio under $5,500, and (iv) Georgia under $3,500. Repayment periods range from 24 to 60 months. The range of APRs on loans made available through FreedomPlus is 4.99% to a maximum of 29.99%. APR. The APR calculation includes all applicable fees, including the loan origination fee. For Example, a four year $20,000 loan with an interest rate of 15.49% and corresponding APR of 18.34% would have an estimated monthly payment of $561.60 and a total cost payable of $7,948.13. To qualify for a 4.99% APR loan, a borrower will need excellent credit on a loan of $15,000 with a term of 24 months, and qualify for at least two of the following discounts: (1) add a co-borrower who has sufficient income; (2) use at least fifty percent of the loan proceeds to directly pay off existing debt; or (3) show proof of having at least forty-thousand dollars in retirement savings – contact FreedomPlus for further details.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

5 Important Disclosures for LendingPoint.

LendingPoint Disclosures

  • Loan approval is not guaranteed. Actual loan offers and loan amounts, terms and annual percentage rates (“APR”) may vary based upon LendingPoint’s proprietary scoring and underwriting system’s review of your credit, financial condition, other factors, and supporting documents or information you provide. Origination or other fees from 0% to 6% may apply depending upon your state of residence. Upon LendingPoint’s final underwriting approval to fund a loan, said funds are often sent via ACH the next non-holiday business day. LendingPoint makes loan offers from $2,000 to $25,000, at rates ranging from a low of 15.49% APR to a high of 34.49% APR, with terms from 24 to 48 months. The loan offer(s) shown reflect a 28 day payment cycle which is being offered as a courtesy as many of our customers are paid on a biweekly schedule and thus this may better align the loan payment dates with your actual income receipt schedule.

6 Important Disclosures for LendingClub.

LendingClub Disclosures

All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.


7 Important Disclosures for Earnest.

Earnest Disclosures

  1. Earnest does not lend in Alabama, Delaware, Kentucky, Nevada, or Rhode Island.

8 Important Disclosures for Avant.

Avant Disclosures

* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.

** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33


* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

* Your loan terms are not guaranteed and are subject to our verification and review process. You may be asked to provide additional documents to enable us to verify your income and your identity. This rate includes an Autopay APR reduction of 0.5%. By enrolling in Autopay your payments will be automatically deducted from you bank account. Selecting Autopay is optional. Annual Percentage Rate is inclusive of a loan origination fee, which is deducted from the loan proceeds. Late payments or subsequent charges and fees may increase the cost of your fixed rate loan. All loans made by WebBank, member FDIC. Please refer to Upgrade’s Terms of Use and Borrower Agreement for all terms, conditions and requirements.

** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.

7.73% – 29.99%$1,000 - $50,000Visit Upstart
6.26% – 14.87%1$5,000 - $100,000Visit SoFi
6.99% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%2$5,000 - $35,000Visit Payoff
4.99% – 29.99%3$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%4$5,000 - $50,000Visit Citizens
15.49% – 34.49%5$2,000 - $25,000Visit LendingPoint
6.16% – 35.89%6$1,000 - $40,000Visit LendingClub
6.99% – 18.24%7$5,000 - $75,000Visit Earnest
9.95% – 35.99%8$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.