ACA vs. AHCA and its Impact on the Medical Device Industry
Thanks to the ongoing healthcare bill debate between the Affordable Care Act (ACA) and the American Health Care Act (AHCA), the market space for health care in the US has been the center of attention across the globe. In the year 2010, a new healthcare bill named the affordable care act, more commonly known as […]READ MORE >>
Thanks to the ongoing healthcare bill debate between the Affordable Care Act (ACA) and the American Health Care Act (AHCA), the market space for health care in the US has been the center of attention across the globe. In the year 2010, a new healthcare bill named the affordable care act, more commonly known as the Obamacare, was brought into effect by the president of the US. The affordable care act was introduced with the objective to improve health care in the US by making health insurance coverage accessible and affordable to all. Through the affordable care act, the United States was one of the few developed countries to offer universal health care to its residents.
However, when the political reign shifted to president Trump’s administration, the Republican party introduced a legislation to repeal the affordable care act and replace it with the American health care act, with certain reforms. While the AHCA plan looms under the clouds of uncertainty, groups of doctors, nurses, hospitals, and patients have contested against the GOP’s health care plan to repeal Obamacare with the AHCA. One group missing from the opposition against the new health care bill are the medical device manufacturers organization.
What is the difference between the Affordable Care Act and the American Health Care Act
The American health care act, the GOP alternative health care bill that aims to repeal Obamacare (ACA), has been introduced with certain amendments to the latter. There are certain similarities and differences between the affordable care act and the AHCA; let’s have brief look at each. The similarities between the ACA and the AHCA are as follows,
- The pre-existing medical conditions such as pregnancy or cancer will still be covered under the new coverage options, and insurance companies cannot refuse the coverage for the same
- Both the legislative pieces, the affordable care act and the American health care act, offer coverage to young Americans under their parent’s insurance till the age of 26
- The affordable care act and the AHCA still prohibit the insurance plans from setting a lifetime limit and also offer tax credits to the citizens who buy insurance coverage
While a few aspects have been retained, there are few amendments made by the Republican party in their quest to repeal Obamacare through the GOP health care bill, replacing it with president Trump’s proposed health care reforms. The differences between the two are as follows,
- AHCA eliminates the individual and employer mandate and the resulting penalties by making health insurance coverage optional for both the parties
- Under the GOP alternative, Medicaid expansion is brought to a halt and restricts federal funding to facilities that offer abortions and planned parenthood
- The proposed bill intends to repeal the taxes on health care and related services such as the over-the-counter medications, prescription drugs, health insurance and the medical device manufacturing industry, which was used by the affordable care act to pay for their plans
AHCA and Its Impact on Medical Device Manufacturers
Under the AHCA, the medical device manufacturers are set to witness sustainable growth that was capped by the excise tax of up to 2.3 per cent on the annual sales to help fund Obamacare. Under the affordable care act, this tax amount would be used to extend coverage to millions of American citizens without a health insurance coverage. The medical device manufacturing industry in the US develops, produces, and sells medical devices and surgical equipment such as high tech devices such as pacemakers and hearing aids across the globe. However, with the introduction of the affordable care act, the medical device manufacturing industry saw a significant loss of American jobs within a span of two years and scaled back their investment in research and development, and other related capital spends.
The drug, biotech, and medical device makers are set to benefit under the new reformed health care bill proposed by President Trump’s administration as it eliminates taxes worth billions of dollars on the industry. The medical device manufacturers have deemed the health care bill by the Republican party as a positive step towards eliminating medical device tax completely.