The U.S. House of Representatives on Thursday passed the American Health Care Act (AHCA) by a narrow 217-213 vote. All the Democrats and a handful of Republicans voted against the Bill.

The Republicans are pushing the AHCA as their answer to former President Barack Obama’s Affordable Care Act (ACA), dubbed ‘Obamacare’. The Grand Old Party has been vociferously opposed to Obamacare on the grounds that it drove up healthcare premiums and health costs, and added billions of dollars to the fiscal deficit.

The Donald Trump administration had already tried to push an earlier version of the AHCA in March, but that failed to pass muster as the Republicans could not gather enough votes to pass the Bill in the House. Eventually, that version of the Bill was withdrawn.

What are the main points of the AHCA?

The Bill aims to replace large parts of the ACA as well as reduce the expansion of new insured under the country’s Medicaid programme. Reducing Medicaid expenditure would mean more money in the Federal budget. It changes the way people pay premiums, targeting age instead of income, and does away with several taxes that were mandated under the ACA.

The measure would provide States with $100 billion, largely to provide insurance to the sickest patients. The Bill also would provide $8 billion over five years to help those with pre-existing conditions pay for insurance.

What parts of Obamacare does the Bill retain?

Young adults can still stay on their parents’ insurance plans till age 26.

Under Obamacare, insurers were mandated to cover 10 “essential health benefits” like outpatient services, lab services, pregnancy, and paediatric care. This part has been retained, but with a caveat: individual States can “opt out” of providing these services, starting 2020. Obamacare's mandate that insurers charge the same rates on sick and healthy people has also been added to the “opt out” pool.

Standards for private insurance providers like transparency in data sharing and wellness initiatives listed under the ACA have not been changed.

What parts of the ACA does this Bill repeal?

Two important pieces of the ACA, that employers offer health insurance and the “individual mandate” that says that people should get insurance or be taxed, will go.

Subsidies that would reduce out-of-pocket expenditures will also go, effective immediately.

Income-based tax credits will be replaced by age-based tax credits, to be capped for higher income groups..

Most of the taxes under Obamacare like those on medical devices, health insurance premiums, prescription medications and high-cost employer-provided insurance known as “Cadillac” plans will also go. According to Reuters, these taxes paid for Obamacare, and Republicans have not yet said how they would pay for the parts of the law they want to keep.

The Bill will also end the expansion of the Medicaid programme, as fresh enrolments will no longer be possible after 2020. Currently, Medicaid pays all the bills, no matter how high they get. The “per capita” cap cuts Medicaid funding by a whopping $880 billion.

In this May 2017 picture, protesters rally during U.S. House voting on the American Health Care Act, which repeals major parts of the 2000 Affordable Care Act know as Obamacare, on Capitol Hill in Washington, U.S. | Photo Credit: Reuters

Whom does this Bill affect?

Older people and those in the low-income bracket.

Tax credits have been revised in such a way that older people will be given less than before while also being charged up to five times more for premiums than the young.

Placing essential health services in the “opt out” pool lands millions of those currently insured in trouble as the insurance companies are free to cut back on paying for these services in States that go for the option. This means insurers are free to deny services for those with pre-existing conditions as well.

According to the Associated Press, the nonpartisan Congressional Budget Office estimated in March that the GOP bill would end coverage for 24 million people over a decade.

What next for the AHCA?

Passing the Bill in the House of Representatives is only the first step for the GOP. The AHCA will next go the Senate, the United States’ upper chamber. But it is a major uphill task for the GOP. A majority of the Senators are still against the AHCA, with most of them citing the funding cuts to Medicaid as their biggest issue.