Obamacare vs. Trumpcare – 7 Things You Need to Know

Federal Healthcare Debate

One of the most controversial aspects of the Obama presidency was the introduction of the Affordable Healthcare Act, popularly known as Obamacare. While popular among many, it faced constant challenges from those who believed the plan was too far-reaching. One of President Trump’s campaign promises was to overhaul the program. While there have not been any laws passed yet, it is important to look at the difference between Obamacare and the proposed Trumpcare. Below are seven things you need to know about the possible changes.

Pre-Existing Conditions

One of the major hallmarks of the Obamacare plan was to require insurance providers to cover pre-existing conditions. In short, this gave insurance options to millions of Americans who were otherwise unable to get coverage and made it possible for them to do so without breaking the bank. Insurance companies would not longer be able to discriminate based on an individual’s health status before the plan – something that was criticized as being incredibly cost-inefficient for health insurance providers.

Contrary to popular belief, the Trumpcare plans have not totally removed the provisions of Obamacare which deal with pre-existing conditions. Some of the potential plans leave this language entirely intact, while others modify it slightly. The major difference seems to be that under Trumpcare, insurance companies have the right not to extend certain types of treatment to some with pre-existing conditions. While the language used in the document is fairly ambiguous, it does seem to mean that there will be points at which those with certain conditions may not be able to be reimbursed for treatment.

The Mandate

One of the biggest criticisms of Obamacare has been the individual mandate. Under Obamacare, those who did not hold health insurance during the year were required to pay a penalty on their taxes. While this was meant to both ensure that individuals would seek out insurance and help defray some of the costs of the program, it was still met with significant resistance by those who were either unable to afford insurance programs or who did not want to purchase health care.

Trumpcare seems likely to do away with the individual mandate entirely. In fact, an executive order has already been signed to allow income taxes to be filed without the insurance section filled in. Given that the individual mandate has been a huge point of contention during the entire Obamacare era, it is fairly safe to assume that this executive order is only the first step in its elimination.

Medicare Expansion

Another major difference in the two plans has to do with how Medicare has been expanded. Over the course of the last eight years, Medicare has been expanded in several states. Though highly costly, this has helped many individuals to get coverage who might otherwise not be able to afford to do so on their own. Under Obamacare the plan was for this expansion to continue.

Under Trumpcare, the Medicare expansion will likely come to an end. Federal support for expansion will either be entirely stopped or will have a moratorium in the next two to three years. This will likely be done as a cost-saving effort, though states will still have to ability to expand their available care using state money.

Tax and Credit

Another major difference between the two healthcare plans is how funds will be raised to cover the health plans. Under Obamacare, the bulk of the tax burden was placed on the medical and insurance industries, with the logic that those who profited the most from the healthcare industry should be those footing the bill. There was also a 3.8% tax on high earners, also meant to fund the programs.

Under the Trump plans, most of those taxes will be cut. Under the House plan, all of the Obama-era taxes for healthcare will be cut. Under the Senate plan, all the taxes levied under Obama on the healthcare industry will be cut, with no discussion on the 3.8% tax on high earners.

HSA Focus

Trumpcare seems to have a strong focus on health savings accounts that was not present in Obamacare. While Obamacare’s focus seemed to be largely on providing insurance, the Trump plans seem to have a stronger focus on allowing individuals to decide where their money will go. Under Trump, individuals will be able to contribute more to health savings accounts and will be encouraged to use these accounts as a supplement for – and possibly as an alternative to – traditional health insurance accounts.

It is important to note that under Obamacare, it is still possible to make use of an HSA. HSA’s are not given a great deal of focus, though, and contributing to these accounts does not exempt one from the individual mandate. This major difference in the status of HSAs helps to show a huge difference in philosophies between the two plans.

The Marketplace

One of the hallmarks of Obamacare was the creation of state health insurance marketplaces. These exchanges were created as a method of helping taxpayers find low cost health insurance plans that fit within the requirements of the Obamacare mandate. Though implemented successfully, they were not without their critics – especially in states that did not extend Medicare.

The Trumpcare plans do not completely remove the marketplaces. Healthcare.gov will remain under Trumpcare, but cost assistance measures will be scaled back. Assistance will still be available to some, but there will likely be more caveats as to coverage.

Women’s Health

Another of the more commonly cited differences in Obama and Trump’s plans has been the way women’s health is covered. Under the Affordable Care Act, plans were required to coverwomen’s health issues such as birth control, OB/GYN visits, maternity care, and pre/post-natal care. These were particularly controversial issues for some, and thus are likely to be changed under the Trumpcare plans.

There is no order that women’s health coverage must be discontinued under the Trumpcare plans. Instead, states have the right to remove this coverage by applying for a waiver. On a practical level, this allows each individual state to determine whether women’s health services must be covered – it’s unlikely that the federal government will turn down any of the states that apply for waivers. As such, Trumpcare does seem like it is likely to remove a great deal of coverage from women.

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