One of the major changes is the way each bill encourages people to maintain health insurance coverage:
- ACA existing law: (in general) if you do not have health insurance for part of the year, you pay an additional tax based on how long you were not covered.
- AHCA proposed law: (in general) if you have a lapse in coverage for more than 63 days, insurance companies are allowed to charge you up to 30% more for 12 months.
I am not an economist, but IMHO, the goal of these provisions should be to both encourage people to obtain coverage if they don't have it, and also discourage people from ending coverage if they do. It seems to me that the current ACA meets both of those goals, however, the proposed AHCA does not encourage people to obtain coverage once they have lapsed for 63 days. In fact, the AHCA appears to discourage people from obtaining coverage once they have lapsed for over 63 days. Of those in the group that have lapsed, those that need the coverage the most (regardless of price) are still going to purchase insurance, so this would increase the density of high cost people in the overall pool, leading to increased premiums for everyone.
Is the above analysis correct, and if so, why would this change be proposed? (I find it hard to believe that the economists involved in writing the bill would have simply overlooked this.)