Health Insurance Coverage: How Do Obamacare and Trumpcare Compare?

On March 23, 2010, President Barack Obama signed into law the Affordable Care Act (ACA), which is commonly referred to as Obamacare.

Summarizing Obamacare

This was the first of its kind to individually mandate healthcare insurance for every American. Obamacare provides a number of consumer health benefits, rights and protections.

Some of these important mandates include:

  • Health insurance companies can no longer deny benefit coverage for pre-existing conditions;
  • Health insurance companies can no longer drop enrollees or raise premiums when people become ill, are diagnosed with a disease or have a terminal condition;
  • It eliminates annual and lifetime health insurance coverage limits or dollars used per individual;
  • Young adults can remain on their parents’ health insurance plan up to age 26; and
  • It provides essential healthcare benefits such as maternity and newborn care, women’s healthcare, hospitalizations and emergency care.

Furthermore, under Obamacare, elderly Americans receive protections under Medicare Part A (hospital, hospice and some home health) and Medicare Part B (medical insurance).

Obamacare also lowers the out-of-pocket costs for prescriptions and increases preventive coverage, such as an annual wellness visit, flu shot, cancer, diabetes screenings and more, that were not previously covered unless paid for out-of-pocket by the elderly.

Additionally, Obamacare enacted the Elder Justice Act to protect the elderly from abuse and exploitation, and it incentivizes hospitals to take extra care of seniors to reduce those at high risk for frequent hospital readmissions.

Summarizing the Proposed Trumpcare Plan

On January 20, 2017, President Donald Trump was sworn into office. With this came a promise to repeal and replace Obamacare. Speaker of the House, Paul Ryan, unveiled the Republican’s healthcare plan known as the American Health Care Act (AHCA), commonly referred to as Trumpcare, on March 6, 2017.

Some of the proposed components released on March 6, 2017 include:

  • A smooth transition from ACA to AHCA;
  • Repeals mandate for required health insurance coverage and penalty;
  • Pre-existing conditions are covered;
  • Protect people with pre-existing conditions, and there would be a government subsidy for those with pre-existing conditions through the Patient and State Stability Fund;
  • Younger Americans would not pay higher insurance costs to cover the older and sick Americans;
  • Keep children on their parent’s plan;
  • The Health Saving Account (HSA) is a tax exempt account that would continue to allow Americans to place part of their income into a tax savings health account;
  • Provide universal access to healthcare; and
  • A portable monthly tax credit.

Obamacare vs. Trumpcare: What Is the Real Cost and Impact on Americans?

Let’s review and compare how Trumpcare impacts the health insurance coverage and costs put in place by Obamacare.

Impact on Health Insurance Requirements and Penalties

Under Obamacare, Americans are required to purchase health insurance or pay an imposed penalty at an incremental rate per year until reaching a $695 maximum.

Trumpcare would remove the required health insurance mandate. It also appears to eliminate a tax penalty; however, Trumpcare would allow insurance companies to impose a 30% premium penalty to buyers who fail to present certificates of continuous coverage. This means that Americans without health insurance for 63 or more consecutive days in a year will be charged higher costs to obtain health insurance coverage.

For example, if it costs $5,000 a year to receive health insurance coverage through Trumpcare, but you have not met the criteria for continuous coverage, then you would have to pay $6,500 to receive the same health insurance coverage.

The penalty would also apply to young adults who no longer qualify for their parent’s plan because they turn 26. This would occur if they are not able to enroll in their own health insurance coverage by the first open enrollment period after they turn 26.

Impact on Health Insurance Subsidies and Tax Credits

Currently, individuals covered by Obamacare that can’t afford the new mandated insurance are provided a government subsidy under the Cost Sharing Reduction (CSR) program. The subsidy allows individuals to purchase a health insurance plan through the Federal Exchange for lower premiums and out-of-pocket costs.

Obamacare subsidies are calculated based on income level and the cost of living from an individual’s or family’s place of residence.

Under Trumpcare, there would be a flat tax credit based on age. This credit would range from $2,000 annually for an individual under 30 to $4,000 annually for an individual over 60.

To get an idea of how Trumpcare tax credits could impact you or your family, you can use this interactive map produced by the Henry J. Kaiser Family Foundation, a non-partisan non-profit focused on national health issues.

Impact on Medicaid

Although Americans were promised during Donald Trump’s campaign that there would not be cuts to Medicare, Medicaid and Social Security, the proposed Trumpcare solution indicates otherwise.

If Trumpcare is enacted, States and governors would take over administration of Medicaid. In a report released March 13, 2017, the Congressional Budget Office (CBO) stated that Trumpcare would cut $880 billion in federal funds from the Medicaid program over the next 10 years. The decreased funding under Trumpcare would result in 14 million fewer Americans enrolled in Medicaid by 2026.

Impact on Employer Health Insurance Coverage

Obamacare provides tax credits to some businesses, and the “employee mandate” requires businesses with 50 or more full time employees (FTE) to provide health insurance to at least 95% of their employees or pay a penalty fee.

The proposed Trumpcare has no employer insurance mandates, and the eligibility for tax credits would increase from the $50,000 income limit to $75,000. This in turn creates incentives for employers to not provide employee health insurance coverage.

Impact on Older Americans

Trumpcare would create higher premiums for older Americans. In fact, it is estimated that older Americans would have to pay five times or more than younger Americans for health insurance. The AARP has stated that Trumpcare could see premiums rise for 50-64 year olds, who are not eligible for Medicare, by $2,000-$3,000 more a year, an increase of 20%-25% over current Obamacare premium costs.

Under Obamacare, insurers can only charge older individuals up to three times that of younger individuals in their 20’s for the same health coverage plan.

Impact on Health Insurance Coverage Under Trumpcare

Since January 1, 2017, 6.4 million Americans selected Obamacare health insurance plans through the Federal Exchange. After Obamacare was enacted in 2010, over 20 million Americans have enrolled in health insurance coverage.

The CBO report states that fewer Americans would have health insurance coverage under Trumpcare. It estimates that, in 2018, 14 million fewer Americans would have health insurance, and that number would rise to 24 million by 2026. Furthermore, the CBO analysis and the Joint Committee of Taxation projects estimate five million fewer Americans will have Medicaid by 2018 under the Trumpcare plan.

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Health Insurance Coverage: How Do Obamacare and Trumpcare Compare?

On March 23, 2010, President Barack Obama signed into law the Affordable Care Act (ACA), which is commonly referred to as Obamacare.

Summarizing Obamacare

This was the first of its kind to individually mandate healthcare insurance for every American. Obamacare provides a number of consumer health benefits, rights and protections.

Some of these important mandates include:

  • Health insurance companies can no longer deny benefit coverage for pre-existing conditions;
  • Health insurance companies can no longer drop enrollees or raise premiums when people become ill, are diagnosed with a disease or have a terminal condition;
  • It eliminates annual and lifetime health insurance coverage limits or dollars used per individual;
  • Young adults can remain on their parents’ health insurance plan up to age 26; and
  • It provides essential healthcare benefits such as maternity and newborn care, women’s healthcare, hospitalizations and emergency care.

Furthermore, under Obamacare, elderly Americans receive protections under Medicare Part A (hospital, hospice and some home health) and Medicare Part B (medical insurance).

Obamacare also lowers the out-of-pocket costs for prescriptions and increases preventive coverage, such as an annual wellness visit, flu shot, cancer, diabetes screenings and more, that were not previously covered unless paid for out-of-pocket by the elderly.

Additionally, Obamacare enacted the Elder Justice Act to protect the elderly from abuse and exploitation, and it incentivizes hospitals to take extra care of seniors to reduce those at high risk for frequent hospital readmissions.

Summarizing the Proposed Trumpcare Plan

On January 20, 2017, President Donald Trump was sworn into office. With this came a promise to repeal and replace Obamacare. Speaker of the House, Paul Ryan, unveiled the Republican’s healthcare plan known as the American Health Care Act (AHCA), commonly referred to as Trumpcare, on March 6, 2017.

Some of the proposed components released on March 6, 2017 include:

  • A smooth transition from ACA to AHCA;
  • Repeals mandate for required health insurance coverage and penalty;
  • Pre-existing conditions are covered;
  • Protect people with pre-existing conditions, and there would be a government subsidy for those with pre-existing conditions through the Patient and State Stability Fund;
  • Younger Americans would not pay higher insurance costs to cover the older and sick Americans;
  • Keep children on their parent’s plan;
  • The Health Saving Account (HSA) is a tax exempt account that would continue to allow Americans to place part of their income into a tax savings health account;
  • Provide universal access to healthcare; and
  • A portable monthly tax credit.

Obamacare vs. Trumpcare: What Is the Real Cost and Impact on Americans?

Let’s review and compare how Trumpcare impacts the health insurance coverage and costs put in place by Obamacare.

Impact on Health Insurance Requirements and Penalties

Under Obamacare, Americans are required to purchase health insurance or pay an imposed penalty at an incremental rate per year until reaching a $695 maximum.

Trumpcare would remove the required health insurance mandate. It also appears to eliminate a tax penalty; however, Trumpcare would allow insurance companies to impose a 30% premium penalty to buyers who fail to present certificates of continuous coverage. This means that Americans without health insurance for 63 or more consecutive days in a year will be charged higher costs to obtain health insurance coverage.

For example, if it costs $5,000 a year to receive health insurance coverage through Trumpcare, but you have not met the criteria for continuous coverage, then you would have to pay $6,500 to receive the same health insurance coverage.

The penalty would also apply to young adults who no longer qualify for their parent’s plan because they turn 26. This would occur if they are not able to enroll in their own health insurance coverage by the first open enrollment period after they turn 26.

Impact on Health Insurance Subsidies and Tax Credits

Currently, individuals covered by Obamacare that can’t afford the new mandated insurance are provided a government subsidy under the Cost Sharing Reduction (CSR) program. The subsidy allows individuals to purchase a health insurance plan through the Federal Exchange for lower premiums and out-of-pocket costs.

Obamacare subsidies are calculated based on income level and the cost of living from an individual’s or family’s place of residence.

Under Trumpcare, there would be a flat tax credit based on age. This credit would range from $2,000 annually for an individual under 30 to $4,000 annually for an individual over 60.

To get an idea of how Trumpcare tax credits could impact you or your family, you can use this interactive map produced by the Henry J. Kaiser Family Foundation, a non-partisan non-profit focused on national health issues.

Impact on Medicaid

Although Americans were promised during Donald Trump’s campaign that there would not be cuts to Medicare, Medicaid and Social Security, the proposed Trumpcare solution indicates otherwise.

If Trumpcare is enacted, States and governors would take over administration of Medicaid. In a report released March 13, 2017, the Congressional Budget Office (CBO) stated that Trumpcare would cut $880 billion in federal funds from the Medicaid program over the next 10 years. The decreased funding under Trumpcare would result in 14 million fewer Americans enrolled in Medicaid by 2026.

Impact on Employer Health Insurance Coverage

Obamacare provides tax credits to some businesses, and the “employee mandate” requires businesses with 50 or more full time employees (FTE) to provide health insurance to at least 95% of their employees or pay a penalty fee.

The proposed Trumpcare has no employer insurance mandates, and the eligibility for tax credits would increase from the $50,000 income limit to $75,000. This in turn creates incentives for employers to not provide employee health insurance coverage.

Impact on Older Americans

Trumpcare would create higher premiums for older Americans. In fact, it is estimated that older Americans would have to pay five times or more than younger Americans for health insurance. The AARP has stated that Trumpcare could see premiums rise for 50-64 year olds, who are not eligible for Medicare, by $2,000-$3,000 more a year, an increase of 20%-25% over current Obamacare premium costs.

Under Obamacare, insurers can only charge older individuals up to three times that of younger individuals in their 20’s for the same health coverage plan.

Impact on Health Insurance Coverage Under Trumpcare

Since January 1, 2017, 6.4 million Americans selected Obamacare health insurance plans through the Federal Exchange. After Obamacare was enacted in 2010, over 20 million Americans have enrolled in health insurance coverage.

The CBO report states that fewer Americans would have health insurance coverage under Trumpcare. It estimates that, in 2018, 14 million fewer Americans would have health insurance, and that number would rise to 24 million by 2026. Furthermore, the CBO analysis and the Joint Committee of Taxation projects estimate five million fewer Americans will have Medicaid by 2018 under the Trumpcare plan.

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