Clarifying Some Misinformation About “Trumpcare Plans”
Since our last update on 7/14 a lot has changed within the health insurance industry. The most signifcant changes have been the elimination of the individual mandate, or what is also referred to as the Obamacare Tax Penalty. One of the main reasons why individuals and families would often choose not to enroll in some of the available alternative plans to Obamacare, was the tax penalty, especially for families with household income that would not allow them to qualify for a significant subsidy. With the elimination of the individual mandate, it clears the way for many Americans to freely choose a lower cost alternative plans to ACA or Obamacare plans.
It is important to note that these plans, often referred to as “short term health plans”, “hospital indemnity plans”, “medical insurance packages” and similar sounding names, do not offer the type of coverage that covers pre-existing conditions, pregnancy and overall, offers less coverage than Obamacare plans do. Plans that are compliant with the standards set by Obamacare (The Affordable Care Act / ACA) offer coverage that often can be more than the average individual needs. That said, if someone has a serious pre-existing condition, or is pregnant or planning on having a child soon, an ACA plan is your best option. Unfortunately the downside to the more generous coverage and benefits, regardless of existing healthcare requirements, is a much greater cost. If someone or a family is not receiving a signifcant subsidy, ACA plans can be simply unaffordable. It is our hope at HealthNetwork, the publisher of this website, that there is true bi-partisian healthcare reform that corrects the flaws in the current healthcare system. Until that time however, we plan on simply being pragmatic in our approach and to be a consumer focused conduit for all individuals, of all income levels, and provide help accessing health insurance plans that they can afford, and most importantly from highly vetted and trusted companies.
There are many companies marketing “Trumpcare” or “Trumpcare Plans”, and like anything else you can purchase, there are some very big differences in the quality and services provided from one company to another. Our preference is to be unbiased, and to essentially “not pick a side”, but when it comes to health insurance, especially plans that are alternatives to Obamacare, we feel we can not operate in this way. There are simply too many companies marketing what we as advocates for consumers, refer to as garbage health insurance plans. Please note that our opinions are our own, and do not represent the thoughts and opinions of others.
We are not going to name these companies who offer “garbage health plans”, because doing so would place us at risk of litigation from those companies. Instead what we have done is focused on only working with and promoting quality products from quality companies we trust, and that have a long track record of operating ethically.
Any link or form to view plan pricing and quotes found within this website, will only take you trusted companies offering quality plans that are alternatives to Obamacare or ACA plans.
Problems in the Party: GOP Conflicting with Itself over Healthcare Reform
After the nonpartisan Congressional Budget Office announced that an additional 22 million people would lose health insurance under the plan created by the Senate, the Better Care Reconciliation Act of 2017 (BCRA), GOP senators indicated that they may not vote for the plan designed to replace the Affordable Care Act (ACA). As with their colleagues in the lower chamber, Senate Republicans appear to be split on how to proceed with healthcare reform. Moderate Republicans claim that the Senate bill goes too far in eliminating protections for American consumers while conservatives contend that the BCRA doesn’t go far enough in demolishing Obamacare. Can they get on the same page? It doesn’t appear likely at the moment – and the American people could suffer for congressional infighting.
Conservatives vs. Moderates On Trumpcare
The biggest issue facing the bill is the extensive difference between what moderate Republicans and conservative Republicans want to see included in the bill. Conservatives want to see more of the ACA repealed with some hoping that the entire law be eliminated, believing that repealing the law will lower premiums. Moderate GOP members do not want to leave millions without health care. There’s also been concern about the way in which the BCRA was introduced – secretly after closed-door discussions.
Medicaid Expansion Under Attack
The Senate bill would continue the Medicaid expansion that was implemented under the ACA for three years with a rollback beginning in 2021. States would receive a fixed amount in the form of a block grant with the amount sent to states increasing more slowly starting in 2025. The increase in funding would be tied to inflation rather than the less generous index of rising medical costs.
Many, including moderate Republicans, are calling the changes to Medicare funding “cuts,” although some experts say they are actually designed to slow the growth of the Medicare program. Senator Pat Toomey (R-Penn.) said that the Medicaid portion of the Senate bill would make the expansion under the ACA permanent. Mick Mulvaney, the White House budget director, said that the government spends more on Medicaid each year and that the change to the system will slow spending significantly.
Moderate Republicans Have Concerns About Medicaid
When it comes to Medicaid expansion, moderates have serious concerns about the Senate bill. The issue is between the federal government and states, which say that the Senate bill regarding Medicaid would increase costs on a state level and eventually leave patients without care. The way the bill handles the Medicaid expansion is also under considerable scrutiny among Republicans.
Texas Senator Ted Cruz prefers locking out beneficiaries of the expanded program quickly in order to reduce costs. His contemporary, Susan Collins of Maine, says that the expansion should be made permanent since the federal government promised states under the ACA that they would receive funds for the expansion. The House plan phases out funding for the Medicaid expansion, cutting off recipients in 2020. Conservatives in the Senate want that to happen sooner, especially members of the Freedom Caucus, who also want to add work requirements for able-bodied recipients.
The Individual Mandate Must Go
Another area where Republicans disagree is in how to handle the individual mandate implemented under the ACA. Under Obamacare, everyone had to obtain health insurance or face an IRS penalty. The House bill allowed insurers to impose a 30 percent surcharge on lapsed coverage, but the Senate bill fully reverses that mandate. A recent amendment to the Senate bill would also impose a six-month waiting period on people who let their coverage lapse for longer than 63 days the previous year, so that when they go to sign up for new coverage the following year, they’d have to wait.
The CBO has estimated that millions of people would choose to forego health insurance without a requirement to buy it, and some Republicans say that there needs to be a strong incentive to encourage Americans – especially young, healthy people who need less medical care – to sign up for healthcare coverage.
Conservative GOP Goal – Full Repeal of Obamacare
On the other end of the far right spectrum, conservatives want a total repeal of Obamacare, but that is almost impossible since it would require more than 60 votes in the Senate, something the Republicans do not have. In addition, many moderates have indicated they do not want a full repeal of the law that they admit has helped millions obtain health insurance. Instead, they prefer revisions of the bill.
In fact, there are portions of the bill that remain under both the House and Senate bills, which Republicans on both ends of the spectrum support. Dependents will be able to stay on their parents’ health plan until they turn 26, and people with pre-existing conditions can’t be denied coverage. The Senate bill also includes provisions for subsidies based on income instead of age like the House bill, though the cutoff would be lowered under the BCRA (from 400 percent of the poverty level under Obamacare to 350 percent under the new bill).
BCRA Developed Behind Closed Doors
A huge sticking point for Republicans is the fact that the entire bill was crafted behind closed doors. This has led both moderate and conservative members of the Republican party to feel as if they have no input into the law. It’s expected that Senate members will introduce amendments to the bill, which may considerably change it and may make it even more difficult to pass. Senate Majority Leader Mitch McConnell had hoped to pass the law by July 4, but that tight deadline left little time for reviewing the bill, making amendments and hashing out the differences, let along bringing it to a vote.
Republicans must be unified in order to pass the law because they hold a slim majority in the Senate. When the AHCA went to the Senate, analysts expected that it would face harder scrutiny, and that appears to be the case now. The fact that there are several Republican who say they cannot vote for the bill makes it even less likely that the BCRA will pass. Unless Republicans can come together on key issues, possibly working with Democrats along the way, healthcare reform seems to be at an impasse.
Cost-Sharing Payments and Trumpcare (Better Care Act – BCRA)
The United States Senate rolled out its version of healthcare reform last week in another effort to repeal and replace the Affordable Care Act. The bill keeps some of the provisions outlined by Obamacare, but it eliminates many other provisions that help many low-income Americans pay their co-pays and deductibles. Cost-sharing reductions offered by the ACA help consumers who fall between 100 and 250 percent of the federal poverty line. The proposed Senate bill would eliminate any subsidy payments to insurance companies by the end of 2019.
A Closer Look at Cost-Sharing Reductions
The primary benefit of cost-sharing reduction payments (CSRs) provided to low-income Americans is to reduce the out-of-pocket limit consumers must pay before insurance companies start to pay for their share of medical services. Under the ACA, consumers are eligible for CSRs if they meet the federal poverty line requirements. However, cost-sharing reductions are only available if a consumer enrolls in a silver plan.
CSRs reduce costs by increasing the actuarial value of health insurance policies, which is the average of total out-of-pocket costs a plan pays. As of 2017, the ACA offers three levels of CSR subsidies: CSR 94, CSR 87 and CSR 73.
The numbers represent the actuarial value of a silver plan. Here are how the numbers break down based on income level:
- 94 percent CSR for income between 100 and 150 of the federal poverty line
- 87 percent CSR for income between 150 and 200 of the federal poverty line
- 73 percent CSR for income between 200 and 250 of the federal poverty line
These are averages. Apart from the cost-sharing reduction payments, anyone who buys a health plan with an actuarial value of 70 percent, for example, would be responsible for about 30 percent of healthcare costs. The insurance company covers about 70 percent, which is an average spread across the entire pool of people with the same plan. For people getting CSRs, the percentage that they pay is much lower. In the case of people who earn less than 150 percent of the poverty line, CSRs make it so that they only have to cover about 6 percent of their medical costs; the insurance company and federal tax dollars pick up the rest.
How the Proposed Senate Bill Affects Cost-Sharing Reductions
A recent report by USA Today shows that more than 6 million Americans who purchased plans from insurance marketplaces benefit from cost-sharing reductions. However, many consumers are unaware of just how much help they receive from the federal government since subsidy payments go directly to insurance companies.
One source of contention going into the 2018 plan year is cost-sharing reduction reimbursements to insurers. You’ll recall that people who make between 100 and 250 percent of the federal poverty line get extra help in covering out-of-pocket costs. That’s because the government reimburses insurers for cutting their rates to low-income enrollees. These CSR reimbursement payments to insurers are what keep insurance companies from losing even more money than they already have in the Obamacare exchanges.
There’s been a lot of uncertainty surrounding CSRs for insurers for next year, leading a lot of major companies and some minor ones to exit marketplaces across the country. A pending court case over CSRs has kept the issue unresolved. It’s expected that CSRs to insurers will total $7 billion in 2017. Over the next decade, CSR payments will amount to about $135 billion total.
The Senate bill proposes to eliminate cost-sharing reductions by 2020. If the federal government stops funding CSRs, companies who participate in the insurance marketplace might be forced to raise out-of-pocket maximums by 15 to 25 percent. However, the Senate bill would continue to pay subsidies until the end of 2019. The House healthcare reform bill proposed earlier in the year would have eliminated subsidies once enacted into law. Over the past several months, President Trump and House Republicans threatened to cut off CSRs but have not addressed their threats since the Senate unveiled its plan.
Proponents of the Better Care Act argue that it could lower premiums by continuing to fund subsidies through 2019. Republicans maintain that since the Senate bill covers subsidies through 2019, insurance companies will not raise premiums, and in some instances, premiums might even be lowered.
Other Changes to Obamacare Proposed by the Senate Bill
Under the ACA, every American must have an ACA-compliant major medical policy or face fines imposed by law. Known as the individual mandate, this is one provision that would be eliminated under the Senate bill. The Better Care Act also eliminates the employer mandate, which requires companies with at least 50 full-time workers to provide health insurance to their employees.
The Senate’s version of healthcare reform would end enhanced funding to help the expansion of Medicaid. Starting in 2021, the bill would stop the enhanced match rate offered to the states for low-income Americans. The ACA helps states broaden their Medicaid programs, allowing people whose incomes are at or below 138 percent of the federal poverty line to enroll.
Chances the Senate Bill Will Pass
According to several media outlets, GOP lawmakers aren’t ready to support the bill. Notable Republicans, including Ted Cruz, Rand Paul and Ron Johnson, are unwilling to support the bill in its current form. Since Republicans only control 52 seats in the Senate, three defections would end any chances of the bill passing since no Senate Democrats support the bill. Republican holdouts cite several complaints regarding the Better Care Act, among them that the bill wouldn’t completely repeal Obamacare or lower overall healthcare costs for most Americans.
Last Updated 6/12/2017
Republican Senate Might Be Pressing To Roll Out Revised Trumpcare Bill Quickly
Americans could have a new healthcare law in the books by summer’s end, at least according to White House Director of Legislative Affairs Marc Short. The Trump administration is urging lawmakers in the Senate to create and pass their own version of the House bill that passed in May. Dubbed Trumpcare but officially named the American Health Care Act (AHCA), the bill would replace many of the provisions outlined under the Affordable Care Act (ACA or Obamacare).
Despite repeated claims from Republicans and President Trump himself on the campaign trail, the AHCA does not summarily upend the entirety of former President Obama’s signature healthcare law. Instead, the new law would replace key components of the ACA – such as the individual mandate requiring everyone to have health insurance – with conservative elements of its own.
The version that passed the House in May included concessions made to far-right members of the Republican Party, but these concessions may not hold up under scrutiny from moderate Republicans in the Senate. Here, lawmakers are taking a sharper look at the provisions outlined under the AHCA. Medicaid expansion, a hotly contested issue among conservatives and liberals, has also become a battle between rightwing lawmakers, who want to end expansion and radically alter Medicaid, and their moderate peers, some of whom represent states that expanded Medicaid under Obamacare guidelines.
President Trump appears to be done with healthcare reform from an administrative perspective. On Twitter, he called for House and Senate leaders to “get it right,” a reference to healthcare reform and, eventually, tax reform. Trump hopes to shift gears by the fall so that his administration can focus on tax reform – or tax cuts, to be precise – an issue that the president has been determined to address since he took office.
It’s unclear at this point how close the Senate is to getting its own bill in order, but thoughts range from cautiously hopeful to downright pessimistic. According to Short, the Senate bill’s “written text is actually pretty far along,” but individual members in the House and Senate aren’t as confident in the bill’s success.
Democrats are unlikely to support any measure put forth by the opposing party, so Senate Republicans can only stand to lose two votes and still have the AHCA pass. The White House wants healthcare reform cleared by the time Congress takes its summer recess in August.
Last Updated 6/7/2017
Trumpcare and the Medicaid Problem – Senators Work on House Bill
Amid pressure from far-right conservatives, Democrats who oppose Republican healthcare reform outright, and moderates from both political parties, Senate Republicans are working on a revised version of the House reform bill, the American Health Care Act (AHCA), which passed in the lower chamber last month. Rightwing lawmakers disagree over several fundamental issues, namely the handling of Medicaid expansion.
Under the Affordable Care Act (ACA or Obamacare), Medicaid was expanded at the federal level, and states could choose to expand their own programs based on revised federal guidelines. The current law allows individuals who earn up to 133 percent of the federal poverty level – or 138 percent based on the way the law is worded – to apply for Medicaid in states that opted to expand. Traditionally, Medicaid has been reserved for specific groups of people, primarily pregnant women, people with disabilities, children, and the elderly.
Along with the District of Columbia, 31 states opted to expand their Medicaid programs, 10 of which have Republican governors. Lawmakers from these states as well as the states governed by Democrats are hesitant – or outright opposed – to reducing expansion, let alone scaling back the program as a whole. The AHCA seeks to change how Medicaid is funded at the federal level.
As it stands, the federal government matches state Medicaid spending at least dollar-for-dollar. Under the House reform bill, Medicaid would be funded via per-capita grants, which would significantly reduce its funding and force state governments to end expansion. Republican lawmakers from expanded Medicaid states have been adamantly opposed to eliminating health insurance access to millions of their constituents, something that could happen if Medicaid gets rolled back under the AHCA.
The Senate is currently working on its own version of a healthcare reform bill, but neither Senator nor House leaders are confident that an agreement can be reached on the tight timeline imposed by the White House. President Trump is urging lawmakers to get their bill in shape before Congress takes its summer recess so that the administration can focus on tax reform in the fall.
The president will be hosting a meeting with Republican leaders this afternoon, June 7, to discuss healthcare reform and tax cuts. Tweeting about the meeting today, the president remarked that lawmakers “must get it right!” referring to healthcare reform in the coming weeks.
In order for their bill to pass the Senate, Republicans need all hands on deck. If more than two Republican senators vote against the bill, it won’t pass. No Democrat is likely to support even a revised version of the AHCA.
Last Updated 12/29/2016
How Trumpcare Might Deal With The Individual Mandate In 2017
The Affordable Care Act introduced individual and employer mandates into the health care system. You may have noticed that these mandates came up a lot during the 2016 presidential campaign. Mandates require people to sign up for health insurance. There’s an individual one and an employer version. Republicans are notorious for being opposed to both mandates, but Republican presidential candidate and president-elect Donald Trump says he sees value in the intent of the mandates.
What is the Individual Mandate?
The individual mandate states that if you do not have a qualifying individual health plan, Medicaid, Medicare or an employer-sponsored plan for the entire year, then you will have to pay a fine in your federal income taxes. As of 2016, the fine was $695 per adult and $347 per child in each family, or 2.5 percent of your family’s total taxable income, whichever amount is higher. That fine will go up, assuming that the ACA stays in place as it is, each year to account for inflation
Exceptions to the Mandate
Most Americans are subject to the mandate, and your health insurance provider will send you a form to submit with your federal income tax filing to show that you fulfilled your insurance obligation. If you’re covered through work, then you won’t need to do anything extra. There are some exemptions to the mandate. They include:
- Religious objection to health insurance
- Native American exemptions
- Hardship exemptions (these are numerous and you should contact the marketplace to see if your situation qualifies)
Unless you qualify for an exemption, you will have to pay a fine for not having health insurance. This might change under Trumpcare, but for now, it’s the law of the land.
Why Is There An Individual Mandate?
It seems unfair that the federal government fines families who do not have health insurance since people who don’t buy coverage usually can’t afford it to begin with. But there’s an important reason driving the establishment of the individual mandate. It boils down to participation. Additionally, in most cases, families who are earning less than others are often eligible for significant subsidies to help pay for coverage. If someone doesn’t qualify for a subsidy they will often be eligible for “medicaid” and they’re also not going to be subject to the tax penalty because they earn too little income. Often where many people run into issues, is when they’re trying to determine their actual household income and whom is and is not a dependent.
The individual mandate is used as an incentive to force people to buy qualifying insurance instead of going without. For insurance companies to keep premiums low, there has to be a certain amount of people buying into their plans. Young, healthy people keep costs low for older, sicker enrollees. Since the ACA was launched in 2010, 16 million people have purchased health insurance from the marketplace, which has been helpful in keeping costs down.
What is the Employer Mandate?
When the ACA was introduced, opponents claimed that it would destroy small business in America. The employer mandate was one piece of legislation that business owners objected to.
The employer mandate says that any company with 50 or more full-time equivalent employees must offer some form of qualified health insurance to its employees, and the employer must pay a portion of the employee premiums. A full-time equivalent employee is any employee that averages 30 hours per week over the course of a month. Any employee who works fewer than 30 hours per week is considered part-time and does not count under the employer mandate.
The employer mandate was supposed to go into effect in 2014, but it was delayed until 2016. At this point, with the coming change in presidents, it is unknown if the employer mandate will be in effect for 2016 or not.
Defining the Qualifying Health Plan
In order for a marketplace plan to qualify under the employer mandate, it must cover at least 60 percent of the costs of all essential services, which is what a bronze plan covers on the marketplace. Since the employer mandate has been repeatedly put off, it’s not uncommon for an employer to purchase a bare minimum plan or recommend that their employees try the marketplace for themselves.
As long as the employer is offering a qualified plan, that employer does not have to mandate that its employees sign up for the company health insurance plan. By offering the proper plan, the employer has met its requirements. Employees always have the choice of using the company’s plan, or finding a better plan on their own on the marketplace. Most work-based options are cheaper than marketplace coverage because you can’t get a subsidy on the marketplace if your job offers affordable health insurance.
Penalties Associated with the Employer Mandate
Employers who do not offer qualified plans must pay a fine for each employee that purchases a plan through the marketplace. The fine is based on a per-employee number, but it’s not applied to the first 30 employees. If the employer does not offer affordable coverage, then the fine is $3,000 per year for every full-time equivalent employee who is forced to buy affordable insurance through the marketplace. The fine is broken down into months in case coverage was offered at some point during the year.
If an employer offers no health insurance at all, then they are fined $2,000 for every full-time employee beyond the first 30. Once again, this is broken down into months in case the employer did offer insurance at some point in the year and then stopped.
Trump and the Mandates
When Donald Trump mentioned his support for the individual mandate in February 2016, he sent shockwaves through the Republican Party. Eight days after he was elected president, Trump was sticking closer to the party line and repeating a battle cry the GOP has been using since the ACA was introduced.
It appears that in his first 100 days in office, Donald Trump will eliminate the individual mandate and never allow the employer mandate to see the light of day. With a GOP Senate and House at his disposal, it is expected that Trump will have no problem eliminating both mandates by the end of the year. Doing so could have a disastrous impact on health care reform as a whole.
Last Updated 12/12/2016
Features of the ACA Trumpcare Intends to Keep
The Affordable Care Act (ACA) has been unpopular among the Republicans since it first became law. Now with President-elect Trump and Republican control of both houses of Congress, repeal or complex amendment of the law is all but imminent.
Trumpcare And The Intent To Repeal The Individual Mandate
Participation in Obamacare is mandated and enforced by tax penalties. In 2017, it is the higher of $695 per adult – half that per child – or 2.5 percent of a family’s annual household income. Refusing to buy health coverage results in those fees being added to a risk pool to fund insurance costs for people who truly need it. The premium cost of average health plans is calculated to help fund comprehensive, less affordable plans for older and chronically ill individuals with pre-existing conditions. There are between 36 million and 122 million people eligible for coverage under the ACA that were previously denied, depending on the definition of pre-existing condition. Along with their loved ones, millions of people with ongoing medical problems are anxiously awaiting Trump’s replacement proposal.
Trumpcare and Pre-Existing Conditions
Trump believes it is possible to provide coverage for those with pre-existing conditions without the use of the individual mandate. However, everyone must pay their premiums consistently to stay out of a high-risk pool where coverage is subject to underwriting guidelines that can discriminate based on prior health, age and gender – and result in higher premiums.
These risk pools would be state-run and involve government intervention to subsidize them. Prior to the ACA, state-contracted high-risk pool programs were very expensive, had few benefits and still primarily operated at a loss. Separating people who do not maintain active coverage from the standard pool keeps an affordable free-market system available to the majority of the population who are healthy.
Tax Credits and Health Savings Accounts
Encouraging young and healthy people to purchase plans combines the strategies of allowing tax credits and deductions for health insurance premiums and expanding access to a health savings accounts (HSA), which is a low premium, high-deductible option that most people would find affordable. HSAs are tax exempt, accumulate funds and can be transferred to heirs without fear of the death tax penalty. As with the ACA, consistent participation and enrollment in Trumpcare’s offered plans is the key to a successful health insurance program for everyone.
Another “possible” way to increase health insurance plan enrollment without the mandate to support those with pre-existing conditions and added health costs is discussed by Avik Roy for the Manhattan Institute. Limiting enrollment periods to sign up for coverage to a six-week period every two years could provide greater incentive. Young and healthy people could legally choose not to purchase at that time, but if anything happened to them, they would risk waiting for insurance until the next two-year period. It should be noted however that Avik Roy is widely considered to be one of the most biased individuals against the ACA, and recently was referred to at a healthcare conference by the CEO of a major healthcare company, as “an extremely educated and intelligent fellow, who knows very little about how healthcare policy actually works in real life”. Adding further, “He’s nothing more than a paid political wonk who lobbies on behalf of the GOP with ideas that are just absurdly bad and a far extreme of what anyone within the industry would really want to see put in place because it would cause irreparable harm to Americans lives.”
Coverage for Dependents
Another provision of Obamacare that Trump wants to keep in place is allowing young adults to stay on their parents’ insurance policies until they turn 26. Young adults live at home longer than ever before. Prior to the ACA, young adults dropped off their parents’ policies at age 18 or 21, typically after graduating from college. Allowing adult dependents to stay on a family plan has been discussed for the last 20 years. Some states have had their own regulations in group plans for young adults, above the ACA threshold, at ages 28 and 31.
Trumpcare would allow the provision for coverage of young adults on their parents’ policies until age 26 to become part of the new legislation. Those with pre-existing conditions would not be charged more or denied coverage if they pay their premiums consistently to avoid high-risk pools. Replacement plans will not allow current coverage to lapse.
Last Updated 12/5/2016
Trumpcare Could Replace Obamacare – But How Long Will It Take?
President-elect Donald Trump, running on a Republican ticket, vowed while on the campaign trail to repeal Obamacare, but he might soon discover that delivering on that promise is easier said than done. The Affordable Care Act, a national healthcare reform law championed by President Obama, went into effect in 2010, making health insurance available to more than 20 million people through subsidies and the expansion of Medicaid. Overturning this law will not be easy, even if the president-elect follows through on his campaign promises. The question that needs to be asked is whether Trump can repeal the ACA, from a legal and political standpoint.
Voted For Repeal Over 50 Times
Congressional Republicans have voted more than 50 times to repeal the ACA for both political and economic reasons. Obamacare has given many people access to affordable coverage, but premiums – especially those for 2017 – continue to rise as insurers pull out of the marketplaces. Trump has argued that the current state of Obamacare will not work, and it will soon collapse under the burden of its own weight as insurance premiums continue to grow outside the range of affordability for a relatively small portion of the population.
As the Republican hopeful, Trump promised to undo the perceived damage of the ACA, and members of Congress have been pressuring him to uphold his end of the bargain now that he will assume the presidency in January. Senate Majority Leader Mitch McConnell said that the repeal of Obamacare sits high on their list of agendas with the new Congress. Now that he’s president-elect, Trump may find it challenging to follow through on his promises as he attempts to work with both parties in the House and Senate.
Not Enough Votes to Repeal
One of the major hindrances to a total repeal is the fact that the Senate does not have enough Republican votes even with a majority. They hold 51 seats in the Senate, but they will need 60 to overturn the law. Trump has become aware of the situation, which could explain why he’s no longer as keen on dismantling the law. In fact, he told reporters that he actually agrees with some aspects of Obamacare. For example, he liked the part that said insurance companies cannot drop enrollees arbitrarily, and he wants to keep this feature intact.
The Editorial Board of the Chicago Tribune outlined some of the ACA’s key mistakes, including:
- Inflexibility in terms of plan coverage – consumers have to have plans that cover minimum essential benefits, even if they don’t want or can’t use them
- Weak incentives for buying insurance – the penalty is too low for most people to worry about it, and most healthy people only want catastrophic coverage to begin with
- Not enough support for health insurers who have to cover higher-risk applicants at comparable rates to healthier enrollees, which results in huge profit losses and the withdrawal of major insurers from the marketplaces
Trump could dismantle key elements of Obamacare through a process known as budget reconciliation. It lets him eliminate the funding of income-based subsidies and makes the newer insurance plans more affordable. Another possible route he could take involves cutting the money spent on expanding Medicaid benefits in 31 states.
Some Republican policy experts disagree on the repeal-and-replace approach, arguing that tearing up Obamacare and starting from scratch will disrupt everything and cost a lot of money. While repealing and replacing the ACA will eliminate a few immediate problems, it brings the country’s health care system back to square one, which is what Hillary Clinton said in the third debate. Instead of scrapping what we have and replacing it with an as-yet undefined health care plan, finding a way to better the program’s strong points will put us further ahead as a nation.
Economic Challenges Weaken the Bill
Parts of Obamacare have already been weakened from economic challenges. For instance, several of the biggest health insurance companies in the United States pulled out of exchanges for individual coverage because they lost money on patients who were sicker than what they expected. Unfortunately, those who are not eligible for government subsidies had to deal with outrageous premium costs, which rose sharply for 2017. Across the country, the average premium hike topped 25 percent this year. In some states, that hike was substantially higher.
Without a replacement plan, eliminating the law entirely could be politically disadvantageous when so many people depend on Obamacare for coverage. Trump now faces a tight deadline where he must dismantle his insurance exchanges by 2018. This is because state-based health insurance regulators now require insurance providers to submit their plan one year in advance, and they must do this either in April or May. That gives Congress only a few months to do this with the new administration.
Where Trump Might Repeal the Law
Some aspects of the law won’t change. Trump has expressed interest in the provision that prevents insurance providers from denying coverage to people based on gender, pricing or health. The mandatory coverage of preventive benefits also will likely remain unaffected. Under Obamacare, health insurance companies cannot charge more money based on a pre-existing condition, and we will likely see all of these favorable provisions under Trumpcare. Key laws are set to expire, however, and Congress will need to address this issue in 2017.
While Trump has already said that he’s willing to keep certain aspects of the law intact, there are some changes that could happen, especially in terms of certain provisions, like the tax on medical device manufacturers. Another provision that he might eliminate is the “Cadillac tax,” which is essentially a tax that affects employer-sponsored healthcare plans in 2020.
Major Health Issues with Trumpcare
Should the GOP be unable to repeal the law, Trump will ask Congress to address the major issues surrounding it. Affordability, which is one of the chief reasons behind Obamacare in the first place, remains an issue for millions of Americans. One example is Crista Simmons, a 63-year-old piano teacher from Kalamazoo, Michigan, who said that she spends more than a third of her income on health insurance premiums. How much you pay for health insurance varies based on your needs, but Crista Simmons isn’t alone in paying an enormous monthly sum for medical coverage. When assessing Trumpcare vs. Obamacare, Congress will need to address this and other issues as they work with President-elect Trump to build a better healthcare system.
Obamacare included numerous controversial taxes that were intended to pay for the law. One of these taxes places a fee on insurance providers. Trumpcare will suspend the fee in 2017, and the 2.3 percent tax placed on medical devices has already been suspended for both 2016 and 2017. Health insurance companies all lobbied against these laws because the taxes do nothing to keep the premiums down. Taxes typically drive up the prices on their products rather than reducing them.
A Controversial Healthcare Law: The Cadillac Tax
The Cadillac tax is one of the more controversial aspects of health care law. It levies a 40 percent penalty on exceptionally generous employer-sponsored health insurance plans. In 2018 dollars, the threshold is an annual premium of $10,200 for individual coverage and $27,500 for family plans. While the law was created to stop consumers from overusing healthcare services and driving up healthcare costs across the board, not everyone supports the tax.
Technically speaking, the tax has been delayed until 2020, but experts predict that pressure will continue to mount in the coming year because employers still need lead time to change their benefits and avoid paying for them. Economists generally support the Cadillac tax, but big business, labor unions and government officials disagree. Taxing high-cost employer coverage could have some negative side effects. Opponents argue that the tax is:
- Inefficient and unfair at the same time
- Overly burdensome to workers at every level, from entry-level employees to CEOs
- Economically risky since the cost would be spread out among workers instead of restricted to higher-tier plans, leading to higher premiums or deductibles (or both)
Health Insurance for Children
The Children’s Health Insurance Program, which is a federal-state partnership set up with the help of Hillary Clinton, will be up for negotiation in 2017. It seems unlikely that Trump will renew the program. According to the Census Bureau, 95 percent of children were given health insurance coverage in 2015 because of this law. When Congress passed the ACA in 2010, a lot of policymakers believed that CHIP would silently vanish because families were given tax credits to help purchase insurance. As it turned out, however, CHIP actually gained more popularity because the benefits were better at a lower cost than what many families could receive via marketplace plans. Trump’s opposition to CHIP could soon leave millions of children without the benefit of health insurance coverage, another politically disastrous move.
Where Trump Has Power
When President-elect Trump takes office, he will have the ability to appoint one Supreme Court Justice immediately, and he could continue to appoint more over his 4-year term. Trump could appoint dozens of appellate and district court judges as well, and it’s assumed that he will replace the cabinet secretaries and political appointees who have administered the Affordable Care Act. What could Trump’s victory do for the ACA?
Appointing new justices, judges and staff members essentially means that Trump can weaken Obamacare and transform the law into a more conservative, Republican image. The more palatable sections of Obamacare, like health insurance companies being unable to deny people coverage for pre-existing conditions, will remain in effect. Other features may get axed. But because Congress has enough Democrats to face the threat of a filibuster, it will stop the votes to repeal, which forces Trump to re-evaluate his stance on the ACA and improve the law rather than replace it entirely.
How the Budget Reconciliation Process Could Be Used
Trump may not be able to get legislation passed using traditional means thanks to the filibuster, but he can, via congressional Republicans, use a technique called “budget reconciliation” to his advantage when altering the Affordable Care Act. Reconciliation was included as a feature of the 1974 Congressional Budget Act, and it allows Congress to sidestep the traditional route required for a bill to become law within strict parameters. In order for reconciliation to be legitimate, the bill has to center on specific legislation related to debt limitations, spending and taxation. What’s important for 2017 and 2018 is that Republicans in Congress can use reconciliation to undo a lot of the Affordable Care Act without having to worry about getting the requisite votes. Reconciliation acts aren’t subject to filibuster.
Since 1980, the first year that this technique was used, there have been 20 successful reconciliation bills and four failures – the president can still veto a reconciliation bill. But with a Republican Congress and Republican president, it’s unlikely that a reconciliation bill would fail in the next administration, at least for the foreseeable future.
Much of the provisions under Obamacare can be repealed and revised using budget reconciliation because the ACA depends on certain taxation procedures. However, it’s not a free-for-all. Budget reconciliation legislation is subject to strict procedures and substantial limits. For example, the Senate only has the power to affect the revenues and outlays within the United States. It cannot affect the “extraneous provisions,” which will also have an impact on expenditures and revenue. Budget reconciliation also involves a two-step process, and Congress must first adopt their budget resolution and instructions to the committee. This will not all happen on day one because these measures take time.
When Congress attempted to repeal certain features of the ACA in 2015, both the House and Senate passed reconciliation legislation to repeal the small business tax credit, the premium tax credit, the employer mandate and the individual mandate. President Obama vetoed the effort, but this significant, albeit symbolic legislative move laid the groundwork for Republican efforts under a new presidency.
In 2015, the reconciliation legislation needed enrollees who underestimated their income to pay back excess tax credits, regardless of financial hardship. If this scenario were repeated, it could create a dramatic deterrence to those who sign up for health insurance, especially people with varying incomes, like the self-employed. And if there’s a repeal of the individual mandate, it will drastically discourage participation in Obamacare. The already weak penalty fine for noncompliance isn’t enough to force some consumers to enroll.
Trumpcare: Republican Replacement Plan will Take Time
Regulations must be written and published for comment, and the mechanisms that have been set up for management of credits and deductions will also need to be organized and administered. Unfortunately, even if Congress created a two-year delay, it still might not be enough for setting up a dependable program. Even getting the program in place, lawmakers will still need to educate the public about how the new Trumpcare health care plan will function.
Donald Trump’s Power to Undermine the ACA
President-elect Trump might not have the option to unilaterally repeal and replace Obamacare, but he still has a fair amount of power in terms of what he can do to interfere with the execution of certain provisions. The ACA has an exhaustive number of pages and regulations that reach into the thousands on the guidance of this system. But regulations cannot be changed legally without notice or comment, and Trump will need to offer legitimate explanations for why he makes his changes.
Still, Trump’s approach to changing healthcare could do a phenomenal amount of damage to the ACA without changing its guidance or its regulations. For example, Trump can stop enforcing the requirements surrounding regulation, and there will be little that can be done about it. He might also nominate a new secretary of the Department of Health and Human Services, who could then take a less aggressive – or altogether apathetic – approach to promoting enrollment under Obamacare. Even if a change in the leadership of the agency is made, implementation would be vastly different, and it could cause a delay of months.
It’s also thought that Trump will be less stringent when it comes to Section 1332 of the Affordable Care Act, which grants innovation waivers (from requirements of the ACA) to states if they develop comparable coverage options to what the federal government offers under the law. The Obama administration has taken a conservative approach to the interpretation of Section 1332, but it’s been suggested that Trump’s administration will be looser with the guidelines, enabling states to opt out of certain ACA requirements.
Insurance Companies Withdrawing from the Program
Several large health insurance companies and a few smaller, regional companies lost a substantial amount of money by using federal and state marketplaces under Obamacare. While some insurers have remained in the marketplaces to wait out the inevitable setbacks of a new system, three of the country’s largest insurers – United Healthcare, Aetna and Humana – withdrew for the 2017 plan year.
A Trump administration is unlikely to care whether insurers participate if it intends to repeal the individual mandate that requires people to have coverage, which would effectively eliminate the primary incentive for insurers to participate in the private market. As a result, an increasing number of insurance companies could withdraw from it. Meanwhile, the carriers that stick around will have no choice but to raise their premiums to cope with an uncertain market and a larger risk pool filled with older, sicker enrollees. These factors would contribute to a transition period that could make coverage even less affordable to anyone who does not have premium tax credits.
Lawsuits with the ACA
Over the years, the ACA has come under near-constant fire from opponents, sometimes resulting in legal challenges that make their way up to the Supreme Court. Recently, a House lawsuit against the Affordable Care Act found support with a Maryland judge, who ruled that cost-sharing reduction payments granted to health insurers by the Obama administration were unconstitutional. In House v. Burwell, House representatives argued that there is no provision in the ACA that covers funding for cost-sharing reduction payments.
As it stands, the government reimburses health insurance companies for payments that reduce cost-sharing for low- and middle-income beneficiaries. In other words, when a company agrees to cut costs for lower-income enrollees, the government promises to reimburse that company for the difference. This is one of the most important aspects of the ACA, at least in terms of insurer participation. Without cost-sharing reduction payments, companies would be far less willing to cut costs for consumers since there would be no financial incentive for doing so.
The case is awaiting appeal as of November 2016. The Obama administration has until January 19, 2017 – the final day of Obama’s term – to submit its brief. But if the case isn’t resolved beforehand, the Trump administration will be placed in the unique position of being able to destroy the ACA without having to lift a legislative finger. Simply withdrawing the federal government’s appeal would result in a victory for the plaintiff (the House).
With the end of cost-sharing reduction payments, the price for participation in the marketplace would continue to rise, and that would lead to many insurance companies opting out of the program altogether. In effect, both federal and state marketplaces would crumble, and the ACA would go down with the ship.
Insurance companies and their beneficiaries could file a lawsuit to reinstate the payments, but that would take time. In addition, the time needed to save the program would not be enough. With a Trump-appointed Supreme Court, progressive litigation victories will be harder to win. It’s not clear whether Trump intends to let the court case go – effectively destroying Obamacare as we know it – or step in and work out some sort of settlement. Kicking millions of people off of their health insurance plans would be a political catastrophe.
The GOP Takes Power
In 2010, Democrats controlled the presidency, the House and the Senate. Politicians sent through legislation in hopes of a dramatic increase in healthcare access for Americans on a lower income level. In many ways, these efforts succeeded. Over 20 million Americans who didn’t have health insurance before the ACA now have coverage, and the uninsured rate is the lowest it’s ever been in the U.S.
Despite these successes, some Americans believe that the ACA has put them at a disadvantage, and opponents of government-run health care continue to cite examples of high premiums as evidence that the system still isn’t working. But anger directed toward the ACA might be unfounded. According to an Adler and Ginsburg chart analysis, 2017 health insurance premiums would have risen between 30 to 50 percent without help from the ACA. The problem is that when premiums increased and insurance providers started dropping out of the system, participation decreased nationwide.
Will the New System Be Cheaper?
The Affordable Care Act has been debated extensively over the last six years, but its major accomplishment was providing affordable health insurance to about 20 million Americans. A chief goal for the upcoming Trump administration will be to make coverage more affordable while still offering choices to the people who want health insurance. One of the biggest challenges to Obamacare was covering people who didn’t qualify for subsidies or Medicaid, thus leaving a portion of the population uninsured and without recourse for getting covered.
The next administration can fight excessive healthcare costs and rising premiums by eliminating widespread abuses in the system, cracking down on fraud and reducing wasteful spending. Obamacare tackled these challenges, and Trumpcare will need to do the same to drive down costs.
Wildly overinflated healthcare costs raise insurance premiums for everyone. Reader’s Digest outlined some of the shocking charges on a standard hospital bill. Those tiny plastic cups that a nurse uses to administer medication cost $8 apiece. Regular Tylenol can cost you $15 per pill, and the cost for a nurse to simply hand you the drugs is a whopping $6.25 per instance. But even these inflated costs are nothing compared with the actual cost of care. Nationwide, the average cost of an inpatient stay in 2014 was $1,974 for state and local government hospitals; $2,346 for nonprofits; and $1,798 for for-profit hospitals. These figures represent per-day charges, which means a week-long stay at a nonprofit hospital could cost well over $16,000.
Without reining in the corruption, there can be no change in the medical industry’s costs, and premiums will continue to soar. Trump and his administration will need to take a heavy stance against inflated costs and corruption if they want to make healthcare truly affordable for the American people.
Keeping Certain Provisions Intact
Trump has not specifically addressed pre-existing conditions in his health care plan, but he has said that he wants to take care of people. Under the current law, people with pre-existing conditions cannot be denied coverage based on medical history, a feature that Trump is likely to keep in his new plan. Health insurers also must cover minimum essential health benefits, and basic bronze plans cover about 60 percent of covered medical costs. Obamacare has brought many positive changes to the American health care industry, such as:
- Men and women paying the same amount for the same services
- Insurance plans not being cancelled based on arbitrary reasons
- Young adults staying on their parents’ policies until age 26
- Free preventive care, including covered birth control and annual wellness checks
Trump has said that he wants to keep the provision that allows young adults to stay on family plans until they’re 26, and he does not want people to risk being denied insurance because of pre-existing conditions. These are popular provisions under Obamacare, so it makes sense to keep them even if the Trump administration changes the health care law in other ways.
Trump’s View on Health Policy Continues to Evolve
President-elect Donald Trump wrote a book in 2000 called The America We Deserve. In the book, one of his passages on healthcare said that as a country, we need universal healthcare. While he’s said that he remains a conservative on many issues, he takes a more liberal stance on health care. He did not like hearing about families who were financially ruined because of medical care costs. In a 60 Minutes interview, Trump told reporters how he planned to take care of everyone.
Trump’s views on Obamacare have changed since he won the election and met with President Obama. It seems as though Obama has done his best to preserve some of the crucial benefits of his health law. What will happen with Obamacare is unclear, but it is almost definite that certain parts of the law will be changed. Congress has come up with more than half a dozen replacement plans for Obamacare, and the reason they have so many is because Republicans have not been able to decide on which will work best going forward. Everyone has a different vision for what they want the American health care system to look like in the future.
On March 2, 2016, the official website for Donald J. Trump published a new “Positions” section that provides insight into presidential candidate Trump’s stance on several topics including U.S. and China trade reform, reform to the Veterans Administration system, tax reform, his beliefs on Second Amendment rights, immigration reform, and most importantly for this conversation, Trump’s new healthcare reform policy, which he believes must be modified in the United States.
- Completely repeal Obamacare. According to Trump’s website, no individual should be required to purchase health insurance if he or she does not want to.
- Enable Interstate Health Insurance Sales. According to Trump, if insurance carriers, the companies that underwrite individuals health insurance policies, were allowed to sell across state lines, it would create significantly more competition in the health insurance marketplace, which would lead to lower costs overall for consumers. The following link will provide you with more detailed information about Interstate Health Insurance.
- Health Insurance Premiums Should Be Tax Deductible. According to Trump’s plan, individual consumers should be able to deduct their health insurance premiums from their annual income taxes. Health insurance premiums are the monthly or annual monies paid to an insurance carrier towards one’s health insurance plan. Donald J. Trump believes that just like businesses, consumers should be able to expense their health insurance costs from their income. It should be noted that within this same passage on Trump’s site, there is mention of a policy of making sure, “no one slips through the cracks simply because they cannot afford health insurance.” There is also mention of wanting to review basic Medicaid options and working with states to make sure that those who want healthcare coverage can have it. We cover both — how Trumpcare could effect Medicaid, as well as Trumpcare and Pre-Existing Conditions — in other articles.
- Health Savings Accounts also know as HSA’s. Health savings accounts, according to Trump’s website, should be accessible to all individuals and should remain tax free, should be shared with the whole family and should be passed to heirs upon death without being subject to the state or federal death or inheritance tax. Under the current rules of the IRS, only certain individuals with high deductible health plans may sign up for an HSA and the HSA is personal to the person, not the family, meaning that everyone must have their own HSA plan for their own medical expenses.
- Require Price Transparency From All Healthcare Providers. This would give consumers the ability to easily determine what doctors, clinics and hospitals all charge for a specific medical service, type of care, or procedure.
- Block Federal Financial Grants For Medicaid To Individual States. Medicaid programs are in place to help lower income individuals and families receive some level of healthcare services. Trump wants the federal government to stop funding Medicaid. He states that if the states are required to exclusively fund, control and manage the funds used for Medicaid, they would control waste and fraud and would be more proactive about getting those participants into higher paying jobs that would get them off of Medicaid in the first place.
- Enable Better Competition For Prescription Drugs. This would allow for companies outside of the United States to be able to bid and sell the same safe, reliable prescription drugs within the U.S. at a significant discount.