Please note that this article was last edited in 2019. Content is purely for educational purposes.
In the aftermath of the 2016 presidential election, many parts of the government in the United States have changed. One of these often-criticized aspects was Obamacare, also known as the Affordable Care Act. The ACA created a health care system that offered affordable, subsidized health insurance policies for millions of Americans who were uninsured or underinsured at the time the ACA legislation came into effect in 2013.
The American health care system has always been controversial, as the health care industry is worth billions of dollars and contributes significantly to the economy of the United States. Everyone has different ideas as to what a functioning health care system looks like, and even now, in 2020, there seems to be little room for compromise in the current political atmosphere.
Before President Trump was elected into office, he was already campaigning on a platform that would eliminate Obamacare in favor of his own healthcare policies. Obamacare has had a rocky reception in the United States, with many people not supporting its existence because it requires people to pay a penalty if they refuse to purchase health insurance. Despite the challenges Obamacare has faced, millions of Americans continue to receive affordable health insurance thanks to its policies.
What Is Trumpcare?
“TrumpCare” is a phrase that describes the continuing health care reform effort under Donald Trump, particularly concerning the changes to the ACA. Although the repeal and replace Obamacare reform effort did not pass in Congress, amendments and policy ideas under Trump that may be considered “TrumpCare” have included:
- Submitted: The 2021 budget includes almost $1 trillion in cuts to Medicaid and the ACA as well as $600 billion savings from Medicare.
- Attempted: The House bill to repeal and replace ObamaCare
- Attempted: The Senate’s Better Care Reconciliation Act of 2017 and its revisions, including the proposed “the Ted Cruz Amendment,” which would allow insurers to market low-benefit, low-cost, high-deductible plans with yearly limits.
- The January 2017 Executive Order to “prepare” for the Affordable Care Act repeal.
- The implemented April 2017 Regulations, which restricted networks and shorter open enrollment periods.
- The implemented October 2017 Executive Order on Association Health Plans, Short-Term Coverage, and HRAs ( in 2018) extended options to major medical health plans and expanded HRAs.
- The October 2017 cuts to Cost Sharing Reduction assistance payments for those insurers who provide cost-sharing reduction assistance to low-income buyers.
- The October 2017 changes to the employer mandate to cover birth control, so religious businesses no longer have to cover contraceptives as a part of their health coverage.
- The November 2017 changes to Medicaid expansions so states can implement work requirements to obtain the coverage.
- The complete repeal of the mandate’s fee for individuals to get coverage starting in 2019.
ONGOING COURT CASE: As an outcome of the state attorney-led lawsuit against the ACA, a Texas federal judge ruled the Affordable Care Act (Obamacare) unconstitutional on Dec 14, 2018. Nothing changes as the legal processes play out. However, there could be real consequences down the road.
What Is Obamacare?
Obamacare, formally referred to as the Affordable Care Act (ACA), was conceived and enacted by President Barack Obama in 2010. The ACA aims to provide all Americans with the opportunity to access affordable health care. Since President Donald Trump assumed power in January 2017, he has repeatedly threatened to dismantle it. This has led many to ask, “Has Obamacare been repealed?” Numerous attempts in Congress failed to fully repeal and replace the bill, meaning the Affordable Care Act shall continue to endure, but its future is definitely in jeopardy.
- Obamacare was signed into law by President Barack Obama in 2010.
- The law included significant terms dedicated to making health coverage on the individual market affordable – including subsidies and expanded Medicaid eligibility.
- Obamacare included alternatives to improve how Americans chose their coverage with the online health insurance marketplace, CO-OPs, and the Basic Health Program.
- The Affordable Care Act established coverage measures to prevent insurers from being selective with accepting applicants based on a person’s pre-existing medical condition or gender.
- ACA-compliant plans come with improved plan benefits – included in Obamacare’s essential health benefits (EHB).
- Health reform advocates praised Obamacare for its numerous stipulations intended to extend coverage and to prevent discrimination regarding policyholders.
- Obamacare introduces various terms meant to decrease Medicare spending, lower costs, and better coverage for Medicare recipients.
- You can only enroll in ACA-compliant plants within an annual open enrollment period or special enrollment periods.
- As of 2020, Republicans still oppose and attempt to repeal the law’s terms.
What Major Provisions Does Trumpcare Change from the ACA?
Anything crossed out indicates the significant terms of what TrumpCare has changed in terms of ObamaCare provisions.
- Thanks to the Affordable Care Act, adult children can continue receiving the benefits of their parent’s health care plan until the age of 26.
- Preventing insurance companies from denying or charging more for coverage based on health status.
- Prevent insurance companies from dropping your overage when you become ill or have made an error on your application.
- Restricting gender discrimination. (TrumpCare has not removed all gender discrimination or ratio for women, but it has changed many of Obamacare’s initial provisions set in place for women.)
- Preventing insurance companies from implementing unjustified rate hikes. NOTE: One of the main clauses that did this, the 80/20 rule, has lapsed, which isn’t helping the markets stabilize. TrumpCare doesn’t fix this.
Elimination of lifetime and annual dollar limits, excluding waivers.
- The right to a rapid appeal of insurance company rulings.
- Subsidizing health insurance prices through the Health Insurance Marketplaces. (While OEP and healthcare.gov will continue, details have changed)
Extending Medicaid to millions in states that chose to open the program. (Medicaid expansion is frozen, and Medicaid will also have its funding reduced) Granting tax breaks to small companies for offering health insurance to their workers. Requiring large companies to insure workers.(The mandate to provide coverage for full-time employees is eliminated.)
- Requiring all insurers to cover people with pre-existing conditions.
- Making CHIP easier for children to receive. (Doubtful, as Medicaid will be defunded.)
- Advancing Medicare for seniors.
Ensuring all plans cover minimum benefits and the ten essential benefits, free preventive care, OB-GYN services with no referrals, free birth control, and coverage for emergency room visits out-of-network.(The requirement to cover OB-GYN, birth control services, and other essential benefits on all plans are some of the benefits that all Americans lose)
Update on Essential Health Benefits
Following numerous conversations among Republicans, it looks like Essential Health Benefits will be governed through state-based waivers, meaning they can be cut at a state level. This change means cheaper insurance for some, as insurers will be able to offer fewer benefits, but in reality, many will not know what they are getting when they purchase their coverage. It’s important not just to pick the ‘cheapest plan’ as services you assumed you’ll be covered for may not be included in the plan.
Update on Medicaid and Other Changes:
Changes were made to the bill in the House as the Tuesday Group, Freedom Caucus, President Trump, and Paul Ryan cut a flurry of deals once found in the ACA. Under the changes, the most notable are:
- Medicaid can have work requirements.
- Essential Health Benefits may be removed.
These changes were kept in a Senate bill, but dates and specifics were changed. The result of the House measures was more cuts to Medicaid, but over a more extended period and starting at a later date.
On Defunding Medicaid
Under this bill, Obamacare’s Medicaid expansion will be phased out over four years, decreasing by 5% each year until 2023. While Americans are no longer allowed to join the expansion set in place by the ACA, tax credits will be available to those who cannot obtain Medicaid. Millions will lose access to coverage, and millions will never receive it in the future.
The Specifics of Obamacare
The Affordable Care Act was created so that more uninsured people and families in the United States could afford a basic level of health care. Individuals can be insured through private insurance agents, through their employers, or a government insurance program like CHIP, Medicare, or Medicaid.
Obamacare subsidizes health insurance costs for people with low incomes. Studies have shown that people who are only offered insurance plans with high deductibles, as Trump is proposing, will choose to forgo health insurance entirely.
The Supreme Court ruled that individual states oversee their Medicaid programs and that the federal government can fund them, but cannot dictate how each state chooses to spend their money. Trump’s block-grant agenda may serve to give more money to Medicaid, but the monetary amount that each state would get hasn’t been determined. States that chose not to expand their Medicaid plans left many people with no affordable insurance options whatsoever.
Under the Obama administration, healthcare legislation caused a record slowdown in health care spending, culminating in its slowest growth year in 2015. By 2018, the Obamacare legislation would have levied a 40% tax on insurance companies charging high rates for their insurance policies.
Trump plans to change the tax structure of how people pay for healthcare and what can be deducted from federal taxes. Obamacare’s individual and employer mandate and the fees, exceptions, and subsidies offered by the federally funded health care system often cause confusion when it comes to filing taxes every year. There are more coverage options, but individuals are still overbuying or underbuying their insurance because, between healthcare and taxes, all this information is difficult to remember and implement.
Proposed Trumpcare Updates – American Health Care Act (AHCA) and Better Care Reconciliation Act (BCRA)
In March of 2017, Congress introduced the American Health Care Act of 2017, also known as Trumpcare, to partially repeal the Patient Protection and Affordable Care Act. Paul Ryan led Congress to add the AHCA and BCRA, but both were shot down and didn’t make it to the Senate.
There has been no complete replacement of Obamacare, there have been some changes under President Trump, through executive order, which eliminate parts of the ACA.
Let’s compare the ACA provisions with the new and proposed changes under Trumpcare (BCRA).
The Individual Mandate, which under the ACA required everyone to have insurance or pay a tax penalty, has been eliminated as of December 2017, the change taking effect in January 2018. The Congressional Budget Office stated they estimate that there would be an additional thirteen million uninsured in the next ten years as a result of this order. Critics of the move cite that young, healthy people now have little incentive to buy health insurance. Since insurance companies lose the pool of healthy insured, their payouts will be higher as those that remain insured do so because they need medical care. It is anticipated that the cost of health insurance will then rise.
Additionally, it is forecasted that since preventive care or care for chronic conditions will be reduced for those that have no insurance, this could lead to a health crisis down the line.
Employer Mandate – The ACA states that employers with at least fifty employees are required to offer health insurance to their workers. Under the BCRA proposal, the requirement would be eliminated.
Coverage of pre-existing conditions – The ACA prohibits insurers from excluding or charging more for insuring those who have pre-existing conditions. The same is true with the BCRA bill. However, insurance companies would receive funding to cover unexpected losses as a result of this requirement.
Assistance for out of pocket expenses – Obamacare subsidizes expenses such as co-insurance and co-pays for those earning up to 400% of the Federal Poverty Level. Additional assistance is provided for those earning up to 250% of the Federal Poverty Level. Under the BCRA bill, cost assistance would not be as generous, and tax credits would be offered to those who make up to 350% of the FPL.
Essential Health Benefits – Under the ACA, all policies sold as a qualified plan must cover ten categories of Essential Health Benefits. Under the BCRA, each state can define essential health benefits.
Premium Age Differences – The ACA allows insurers to charge older customers up to three times compared to younger customers. The BCRA will enable insurers to charge up to five times and allows the States to change this ratio.
Health Savings Accounts – Under the ACA, individuals can contribute up to$3,400 and families $6,750 into tax-free HSAs. Under BCRA, those with incomes under $100,000 a year can put up to $7000 for individuals and $14000 for families in tax-free health savings accounts; Those earning above that limit will be taxed on a sliding scale.
Medicaid – The ACA provisions matching federal funds to states for anyone who qualifies with expanded eligibility to 138% for those with income at the poverty level. The BCRA proposes to end funding by 2024. The bill grants states the option to choose from different funding options and utilize per-capita caps or block grants, allows continuous financing and incentives to expand coverage by state.
The BCRA and AHCA will evolve as the discussion among the different political parties continues. Even those within the same party disagree on different parts of the bills introduced. The battle is not over. Healthcare reform is at the forefront of the current presidency. Until there is a majority vote between the Senate and the House of representatives, other changes and perhaps executive orders will continue to chip away at Obamacare. An excellent resource to keep up with what is currently on the table is found here.
Although there isn’t yet historical track record of the effect of Trump’s plans for the health care system, experts have estimated that Trump’s changes to the health care industry will cost half a trillion dollars more than Obamacare over the course of a decade. Some of his changes would save money compared to Obamacare, and other changes would cost more.
What is the Federal Invisible High-Risk Sharing Program?
The Federal Invisible Risk Sharing Program are funds set aside by the federal government to help insurance companies cover those with costly medical expenses. Assuming that these high-risk individuals have maintained continuous coverage, they should expect to pay the same amount as those who are healthy.
Why Not Stick with the Individual Mandate to Make Sure Everyone Has Health Insurance?
In short, the individual mandate has not worked. Once Trump took office, 19 million Americans opted out of Obamacare in March 2017. The current American healthcare system simply cannot be sustained on the concept of the individual mandate.
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