Major changes to the ACA

On November 8, 2016, the American people gave the Republican Party the White House, the Senate and the House of Representatives. Throughout his presidential campaign, GOP nominee Donald Trump vowed to repeal Obamacare and replace it. The Republicans only won 52 seats in the Senate, which falls short of the 60 votes needed to completely repeal Obamacare, and it’s doubtful that the GOP will find eight Democratic senators to fill out the vote. But there is definitely enough Republican power in the Senate to dismantle Obamacare and replace key parts with what is being called Trumpcare.

When Donald Trump talks about his healthcare plan, he says he wants to simultaneously phase out Obamacare and bring in Trumpcare. To most people, the idea of the federal government being able to pull off something like that sounds a bit far-fetched. But what the public can be assured of is that big parts of Obamacare are changing, and it helps to have a little warning before the changes are made. Based on what Trump has been saying throughout the campaign, it is becoming apparent what will change with Obamacare and what will stay the same.

Access to Plans

While Trump has indicated that he will keep Obamacare features such as allowing pre-existing conditions and giving parents the option to cover their children up to 26 years of age, he is making a major change that could actually be a positive thing.

Trump has said repeatedly that one of the reasons premiums are so high is because insurers cannot sell plans over state lines. Trump plans on changing this when he opens up a national health insurance marketplace that Trump says will spur competition and keep premiums low.

Backing Off Medicaid

Under Obamacare, the federal government become very involved in how states run and administer Medicaid. The oversight became so overwhelming for some states that several decided to pull back Medicaid benefits to avoid the administrative red tape the federal government created.

Trumpcare plans on simplifying Medicaid and giving administrative powers back to individual states. The federal government will still offer grants to states to help with Medicaid costs, but the states will decide how to run their own Medicaid programs.

Tax Write-Offs

When it comes to your federal income taxes, Trumpcare will change the way your medical expenses are deducted. Under Obamacare, your medical expenses must be more than 10 percent of your adjusted gross income before they can be written off. Under Trumpcare, everyone will be able to write off their health insurance premiums.

It sounds great, but this is yet another gift to the wealthy who generally pay much more for health insurance. Trump has not indicated whether or not he will drop the federal income tax penalty for people who do not have health insurance.

Customizing Coverage

For many practical reasons, most Obamacare plans were structured to a rigid system that outlined exactly what kind of coverage was offered at each level. Trumpcare plans on allowing people to customize their health insurance to get the specific types of coverage they want. Trump has not indicated how the marketplace will accommodate this customization or what types of custom coverage will be offered.

Fuzzy Transparency

Since it is still in the planning stages, Trumpcare is kind of vague in some areas. For example, Trump has said that Trumpcare will have more transparency in terms of how premiums are calculated so that consumers can make better choices. Obamacare already has a level of transparency that essentially does the same thing, so it will be interesting to see how Trump makes premium prices and costs even clearer to consumers.

Bye Bye Tax Incentives?

Obamacare had an extensive schedule of tax incentives that low-income families could use to get breaks on their health insurance premiums. These incentives helped tens of millions of Americans get health insurance who could otherwise not afford it.

No one in the Republican Party and not Donald Trump himself has given a solid position on what will happen to the tax incentives. But people who have been monitoring the Trump campaign feel that there is a good chance that the incentives will be eliminated and, along with them, coverage for millions of Americans.

Foreign Drug Companies

Obamacare did not have any specific language that banned foreign drug companies from selling medication to American customers. But it also did nothing to pave the way for Americans to get access to cheaper name brand drugs in countries such as Mexico and Canada.

Trumpcare will specifically allow Americans to save money by buying the same medication they get now from foreign companies that charge a lot less. Trump faces a huge uphill battle with this provision of his plan, however, as powerful pharmaceutical lobbyists will be unlikely to simply allow their customer base to move beyond their borders.

About Those Pre-Existing Conditions

Obamacare made it illegal for insurance companies to alter premiums based on a consumer’s health history, including pre-existing conditions. While Trump has not confirmed one way or the other whether he will keep the Obamacare pre-existing conditions rules intact, he has indicated that he would allow insurers to charge more for people who do have pre-existing conditions. This would effectively put those with medical problems right back to where they were before the ACA became law.

Educating Consumers About HSAs

A Health Savings Account (HSA) is a way for people to save pre-tax dollars through their employers and then use those dollars tax-free to pay for medical expenses. Obamacare did not change HSAs and Trumpcare does not look to do anything drastically different with HSAs. But Trump has said that Trumpcare will educate consumers about HSAs and remind people of this tax-free option.

The Wrath of the Healthcare Industry

Obamacare was praised by healthcare organizations, like hospitals, because it put measures in place to make sure more people had health insurance. The more coverage people have, the less a hospital has to absorb and pass on to people with insurance. Health insurance makes the health care industry more affordable. With Trumpcare targeting a reduction in Medicaid funding and possibly removing the tax breaks that helped low-income families, hospitals are nervous that Trumpcare could be a financial disaster for them. Look for hospitals and health industry lobbyists to be very active in the development of what will wind up being Trumpcare.

Donald Trump promised to repeal Obamacare if he won the election, but he forgot to remind his followers that he cannot repeal it without at least 60 Republican senators. Since Trump cannot unilaterally repeal Obamacare, he has a full schedule of changes coming that will affect millions of people.