***Need health insurance coverage?***
***Call 1-855-614-5057 and speak to a licensed agent today.***
What is Trumpcare?
During the 2016 presidential race, health care remained a divisive topic for candidates across party lines. Republicans were adamant in their disapproval of Obamacare; former President Obama’s plan to create a more affordable health care system in the United States. Under the newly elected President Trump, some aspects of the health care system are bound to change, hence the birth of the term Trumpcare.
Already, members of Congress have supported President Trump in the repeal of the Affordable Care Act. The ACA, also known as Obamacare, allowed millions of Americans to purchase a base level of health insurance at rates that were affordable and subsidized for individuals and families with low incomes. With a Republican majority in the House and the Senate, President Trump will likely be able to influence the state of the American health care system with only a minor level of pushback from Congress’s Democrats.
As with any newly implemented system in the health care industry, the Affordable Care Act has had its ups and downs in the six years since its creation. Advocates of Obamacare touted it as a step in the right direction toward insuring all Americans have at least a basic level of health care, while opponents of the ACA called it a thinly veiled attempt at a socialized health care system. Changes are coming to the American health care system, regardless of anyone’s personal opinions of the strengths and weaknesses of Obamacare.
Despite the many voices pulling the health care debate in different directions, President Trump wants to alter certain aspects of the health care industry. One of the changes he wants to make is to get rid of the individual and employer mandates, which were a noticeable part of the Obama administration’s definition of affordable health insurance. He may divert funding from some governmental medical programs like Medicare and Medicaid, alter the funding structure for individual states, and change the way insurance premiums are treated in relation to their tax deductibility when filing income taxes.
Trumpcare and the Individual Mandate
The Individual mandate is a specification in the Affordable Care Act that requires people to be covered by health insurance, or pay a penalty for not being insured. The mandate was put in place as an incentive for people to explore the affordable health insurance options available to them under Obamacare. The individual mandate was unpopular with Republicans, who felt that it was designed to punish people who already couldn’t afford health insurance.
People who already have health insurance through a private insurance company, their employer, or through another government program like Medicaid don’t have to worry about being penalized due to the individual mandate. There are also exemptions to the individual mandate. The financial aspects of the individual mandate are now assessed at tax time.
The logic of the individual mandate is that people who have low incomes are given significant subsidies and tax benefits that make health insurance affordable for them. If they still choose not to be insured, then they pay a penalty. The ACA was designed to make sure that income wasn’t a problem for Americans seeking a basic level of health insurance for themselves and their families.
During his presidential campaign, President Trump originally came out in favor of the individual mandate. Under pressure from the Republican party, after his election, he now supports the removal of the individual mandate from the health insurance legislation.
Trumpcare and the Employer Mandate
The employer mandate is much the same as the individual mandate, but it applies to employers and the health insurance options they offer to their employees. Under the employer mandate, employers with 50 or more full-time workers must offer a base level of health insurance for them. The employer must also pay some of their insurance premiums. The employer mandate didn’t come into effect until 2016, and results of the first year of the mandate haven’t been seen as of yet.
Employers must offer their employees a base level of insurance which covers a certain percentage of their average health care costs. As long as the employer offers this qualified insurance plan, they have done what they have to do to meet the requirements of the employer mandate of the ACA. Employees can choose to be covered under their employer’s health care plan, or shop in the health care marketplace for a plan themselves. However, marketplace subsidies for health insurance aren’t available for people with full-time jobs who have health insurance offered by their employer.
Rather than assign a lump sum as a penalty for employers that do not offer insurance to their employees, the mandate dictates that employers must pay per employee. The first 30 employees in a company don’t count for any insurance penalties. If a company offers insurance, but an employee chooses to purchase their own from the marketplace, the company must pay $3,000 per employee. If the company doesn’t offer health insurance to their employees at all, they are assessed a fine of $2,000 per uninsured employee.
When it comes to both the individual and the employer mandates, President Trump and his supporting members of Congress will likely eliminate both from the health care legislation and Trumpcare.
What He’ll Keep the Same
Although Trump has vowed to dismantle the structure of the Affordable Care Act, there are aspects of the health care system that are working. Tearing down the existing health care infrastructure just to rebuild it again would be highly expensive and isn’t a plan that is supported by too many people. Trump does plan to keep some parts of the ACA in place.
President Trump wants to keep the terms and conditions for pre-existing conditions the same under his health care plan. The ACA currently keeps insurance companies from discriminating against people because of the pre-existing medical conditions they may have. Right now, the money people pay from the individual mandate and the employer mandate goes into a pool that is used to fund the health care subsidies and expenses for people who need it the most. The insurance system will still rely on people consistently paying their premiums, or risk losing their coverage or being faced with even higher insurance premiums.
Trump wants to expand parts of the ACA that were written into the legislation, but not really used or implemented under Obamacare. One of these areas of expansion is the idea of Health Savings Accounts or HSAs. These HSAs are paired with qualified high-deductible health plans that offer low premiums, are tax exempt, and can accumulate funds that can be inherited without being subjected to the death tax penalty.
Trump will also keep Obamacare’s provisions for dependents. Right now, dependents are insured under their parent’s insurance until they are 26 years old. Some states have different policies regarding health insurance and dependents, and some people can be covered until they are 28 or 31 years of age. Dependents with pre-existing conditions are still covered with no changes to their insurance premium payments or having to worry about a denial of coverage to them because of these conditions.
Right now, the ACA’s Bronze plan, the minimum amount of insurance a person can get, covers about 60% of their medical costs. Trump likely won’t change the structure of these insurance plans, nor will he eliminate the legislation regarding providing coverage for people with pre-existing conditions, discriminating based on gender, age, or location, or the current offerings for free preventative care.
Health Care Changes Moving Forward
Changing the existing health care structure doesn’t happen overnight. Before President Trump was elected, Republicans in Congress voted to repeal the ACA over 50 separate times. There are many issues with Obamacare, including questions about its affordability in unstable economic times. As insurers pull out of the marketplace, pressure grows on the remaining insurers and premiums could once again be higher than most people can afford.
Major complaints against the ACA, and reasons why some people choose to pay the penalty rather than purchase insurance through the marketplace include a lack of flexibility in their plan coverage and not enough support for high-risk insurance policy holders.
Trump wants to change the tax structure for medical device manufacturers and taxes that are levied on employer-sponsored health care plans. There are many aspects of the taxation of health care that could be changed under Trumpcare. One of the primary changes is the ability to deduct medical insurance premiums from your taxes. Under Obamacare, people can only deduct medical expenses from their taxes if they exceed 10% of their yearly income, with some exceptions for people who are self-employed or receive insurance from their employer.
Trumpcare would increase price transparency for the insurance policies that are available in the health care marketplace. Obama already made great inroads in increasing the price transparency of health insurance options. Price transparency allows people to see what exactly they are being charged for, how much specific doctors or medical organizations charge for different procedures, and more.
The structure of how Medicaid is funded may also change under President Trump. Trump will likely change how much federal funding goes to each state that participates in Medicaid. Currently, the federal government matches the amount of money that states put into their Medicaid programs. Trump may change this to eliminate federal funding for Medicaid altogether, or he may implement a block-grant funding scheme that gives states individual sums of money based on their financial needs for Medicaid. How much money would be provided to each state is unknown.
Unfortunately, knowing what Trump plans to change and what he’ll actually change are two very different things. There are few threads of continuity in his opinions on health care reform before, during, and after his presidential campaign. In his 2000 book, “The America We Deserve,”Trump firmly advocated for a system of universal health care. Since his election, however, his views on health care reform have oscillated.
On his official White House “Positions” page, Trump has reinforced his opinion that no one should have to pay for not having health care; his plan is to repeal the individual mandate. He also wants to allow insurance providers the ability to sell to out of state clients. This practice is not illegal under the Affordable Care Act, but it hasn’t been implemented. Generally speaking, each state has its own health care system and issues that are best solved by being regional. These companies understand the health issues and insurance needs of the constituents nearest to them.
Trump wants to open the insurance world to increase competition and, ultimately, drive down the cost of health insurance across the country. Additionally, he intends to do this by expanding the number of companies that the United States accesses prescription drugs from. Trump wants to open the health care market to further include overseas pharmaceutical companies. The prescription drug options from these companies could serve to bring cheaper, generic prescription medications to the United States and ultimately cut down on excessive health care costs for medication at private doctor’s offices and in hospitals.
Trump has maintained a stance supporting smaller pharmaceutical companies, both overseas and domestically. Prioritizing the work of these smaller companies could serve to increase competition and drive down costs in the pharmaceutical world, a situation that would help decrease rising health care costs and make prescription medication more affordable for the people who need it the most.
Changes to Governmental Programs
Trump could potentially repeal the Children’s Health Insurance Program, known as CHIP. CHIP was founded to give children a level of health care coverage even if their parents couldn’t afford insurance. CHIP insured 95% of children in the United States in 2015. Many families still use CHIP for their children’s health insurance coverage because the program offers better coverage at a more affordable price than the family insurance policies in the health care marketplace do.
Trump could also change Medicaid and Medicare funding. He also intends to change the way subsidies are given out, making them age- rather than income-based. This changes the age qualifications for people seeking to be covered by governmental insurance and could affect people’s coverage options moving forward.
The Long Run: Saving Money, or Spending It?
Health care reform is tricky business, and there is often no way of knowing if the changes being made to the health care system will save or cost money in the long run. Even in the short term, there is not a lot that can be estimated when it comes to analyzing Trump’s plans for the industry.
There are few members of Congress or the public who are advocating for a full-on repeal of the ACA. Dismantling the entire system and rebuilding it would be expensive and time-consuming, resulting in millions of people losing their existing health insurance and not knowing if they would be able to get it back in the near future. Trump could, however, change a few aspects of the system that may result in potential money savings.
Trump could change how subsidies are given out with regards to the health care marketplace. Eliminating subsidies could make newer insurance plans more affordable. Trump could also change how Medicaid is funded in different states around the country. Right now, states are given money to expand their Medicaid offerings if they want it. Some states have chosen to keep their Medicaid programs small, and Trump could further cut back on the federal funding that these states receive.
For those few who are supporters of the repeal-and-reform method of doing business, the time frame doesn’t quite fit the needs of the American people and the health care system. If the ACA were entirely dismantled, Congress and the President would have to come up with a suitable alternative and implement it in a reasonable amount of time to keep uninsured Americans protected for as long as possible. If it took two years for Congress to implement Trumpcare, there would still be a period of time when coverage is coming into effect, and people are re-learning what their coverage options are.
The strain on the current health care system is showing. Uncertainty over the future of the system has caused the three largest health insurance companies in the United States to pull out of the health care marketplace. United Healthcare, Aetna, and Humana have all removed their insurance policy options from the marketplace in 2017. Other insurers are waiting to see what the system does and the changes that are made before deciding on their courses of action.
There is still a portion of the American population that isn’t covered by insurance. In some cases, this is because these people don’t qualify for Medicaid, but they have high enough incomes to make them ineligible for subsidies for the health care marketplace. So, while ObamaCare has certainly lessened the gap between affordable health care and the people who need it the most, the gap hasn’t been closed entirely. Trump hopes to find ways to continue minimizing the number of people who can’t find the right insurance for themselves and their families.
Health care professionals and experts in the insurance industry say that Trump will need to follow in Obama’s footsteps when it comes to cracking down on medical fraud, misuses of the system, and wasteful spending widespread throughout the health care and insurance industries. Strengthening the weak places in the existing system will ultimately lead to better health insurance options for Americans, in addition to driving down costs.
Although Trump has indicated many ways in which he would seek to change the health care system, experts are unlikely to be able to come up with real answers to how much it would all cost without knowing exactly what changes Trump is proposing. The health insurance and health care industries in the United States are responsible for billions of dollars of revenue a year, but understanding these costs regarding health care reform can be quite difficult to figure out.
The information available about the proposed changes to America’s health care system is constantly changing. As Trump settles into his new position in the Oval Office, his opinions on the future of health care in the United States also change. Trump is supported by a Republican majority in the House and the Senate, which may make his ability to pass health care laws through Congress slightly easier. However, he will still very much need to work closely with Democrats in Congress to pass any manner of legislation related to the health insurance industry.
As time goes on it will become clearer what Trump plans to do to alter the Affordable Care Act’s structure, and in what ways that manifests. In all likelihood, there will not be a complete repeal of Obamacare, but rather an altering of certain weak aspects of that legislation to make room for what will hopefully be a better, stronger health care system in the United States.
Ultimately, this administration still seems to be committed to providing affordable health care for the people in the country who need it the most. Some parts of the Affordable Care Act will remain the same, such as the provisions stating that an insurance company cannot discriminate or withhold an insurance policy based on pre-existing conditions, gender, age, or location. There will still be subsidies for people looking for affordable insurance, although these subsidies and tax breaks may have different qualifications under Trump than they did under Obama.
There will be different funding available for governmental medical insurance programs like Medicaid and CHIP, and some of these programs may cease to exist altogether. Trump has wavered in his stances towards the viability of the ACA, the benefits of the individual and employee mandates, and in his positions regarding the taxation of health insurers and people who are purchasing health insurance through the governmental health care marketplace. Only time will tell what changes will be made, how they will impact the health care system of the United States and the options American will have for continued affordable health insurance moving forward.
***Need health insurance coverage?***
***Call 1-855-614-5057 and speak to a licensed agent today.***