What will the GOP’s health care bill actually do?

Last month it was pronounced dead, but on Thursday House Republicans found the “yea” votes they needed to give new life to their health care reform bill.Jewel Samad/AFP Photo/Getty Images

Last month it was pronounced dead, but on Thursday House Republicans found the “yea” votes they needed to give new life to their health care reform bill — passing it despite unified dissent from Democrats, strong opposition from doctors and hospitals, and no desire among GOP supporters to wait for an analysis of the legislation’s costs from the Congressional Budget Office.

The core features of the bill haven’t changed; it still includes the same long-term cuts to Medicaid, higher premiums for older Americans, and smaller subsidies to help people afford individual insurance. And that suggests it will have roughly the same overall impact, including 20 million newly uninsured Americans — people who either can’t afford coverage or choose not to purchase it, according to the CBO.

What revived this bill, however, was an amendment that could cause even further disruption. States can now opt out of certain consumer protections. If they choose, they can let insurers charge higher rates to some applicants with pre-existing conditions, or sell stripped-down plans that don’t cover things like maternity care or substance abuse treatment.

Massachusetts is probably not going to opt out — we were boosting protections like these before the Feds ever told us we had to. But even here there are risks, and the effect in other regions of the country could be dramatic, effectively moving states back to a time when getting sick had the perverse effect of making it harder to afford insurance.

If you’re one of the many Americans caught off-guard by the sudden revival of repeal-and-replace, here’s a rundown of the major provisions of the House Republicans’ latest bill.

Medicaid expansion becomes Medicaid contraction. Obamacare gave states money to expand Medicaid, which helped millions of low-income Americans get insurance. But the House bill would not only roll back that expansion, it also introduces a less generous formula for funding Medicaid over time.

Instead of reimbursing states based on actual spending, they would either provide a fixed amount for each enrollee or a lump sum — depending on state preference. All told, CBO estimates that would add up to $880 billion in Medicaid cuts over 10 years, with 14 million fewer people having have access to the program.

This could have a profound impact on Massachusetts, which receives billions each year in Medicaid reimbursements — and which is using a special bucket of extra Medicaid dollars to experiment with cost-saving innovations.

Smaller, less tailored subsidies. Under Obamacare, low-income families received large subsidies to help them purchase individual insurance coverage. Republicans want to spread the subsidies to a wider range of people, so they set subsidy amounts based on age, rather than need. Older people get more, younger people get less.

That would be a boon for middle-class families, who are largely cut out of the current funding arrangement, but it would leave many older and poorer Americans unable to afford insurance — because even though older Americans get higher subsidies, the bill allows their premiums to rise even faster.

To partially offset these shrinking subsidies, House Republicans have set aside money for states to use as they see best. But the amounts seem relatively small compared to expected need.

Goodbye individual mandate. Gone is the deeply unpopular Obamacare rule requiring all Americans to purchase health insurance. In its place, though, Republicans have introduced their own not-quite-mandate, a “continuous coverage” rule saying that anyone who goes without health insurance for 63 days or longer can be charged a 30 percent penalty on their next policy. The reason Republicans weren’t able to do away with penalties altogether is because health insurance markets can’t work without them. Absent some requirement, people simply wait until they’re sick before buying a policy, and that drives the cost of insurance way up.

Don’t like Obamacare? Opt-out. This is the miracle change that brought the Republican plan back from the dead. States can now opt out of two key Obamacare rules.

One, they can give insurers the freedom to eliminate certain types of coverage, say for maternity care or mental health. Two, they can let insurance companies charge higher rates to people with pre-existing conditions — temporarily, and only if those people have failed to maintain continuous coverage. Predicting the impact of these changes is tricky, and CBO hasn’t yet had a chance to try.

It’s not clear whether states will really go this route. Massachusetts probably won’t, for instance, because providing ample coverage to all residents is a core political value. Elsewhere, too, people like the protections for pre-existing conditions, and might rally to their defense.

Then again, shrinking subsidies and cuts to Medicaid could force states to give insurers greater latitude, so as to keep them offering any plans at all. And that could create a portal back to the health care world before Obamacare, where a third of all people had to pay extra because they were deemed risky and insurers could refuse to cover substance abuse treatment.

Plus, it appears there’s a risk of contagion. The way Obamacare is written, companies that operate in multiple states have some license to which state regulations to follow. So it’s possible that even if you’re working in Boston, you may end up with a health plan whose benchmark regulations are set in Mississippi or Oklahoma.

Tax cuts. Often overlooked is that this health care bill also includes a substantial tax cut, amounting to hundreds of billions of dollars over 10 years, most of it flowing to the highest-income households. One of the largest cuts, for instance, involves the elimination of a surtax on capital gains for families with at least $250,000 of income.

A long and winding path must still be traversed before this bill a law: from the House to the Senate; then back to negotiate a joint House-Senate compromise; and only then, on to the president’s desk.

But the surprise resuscitation of this Frankenstein bill is yet another reminder that you shouldn’t confuse the unlikely with the impossible. And if this bill bill does become law, the effect will be dramatic, wholly transforming the way Americans get — or can’t get — their health insurance.