Here’s what we all know: Democrats object to the changes Trump has proposed in his “American Healthcare Act,” citing concerns that a large number of the population will receive fewer benefits at a higher cost than with Obama’s “Affordable Care Act.” This can be argued persuasively, particularly as one gets a closer look at both Medicaid and premium hikes for older people. Trump’s changes to the healthcare plan are mostly directed towards bolstering participation by the insurance companies that may otherwise drop out of the marketplace as profits are lessened by governmental requirements. He makes the salient point that without insurers, the whole paradigm falls apart. Here are four key differences between healthcare acts:
1. Qualifying for Medicaid
Obama’s Affordable Care Act planned to expand Medicaid coverage to a larger population by raising the annual income qualifier from the poverty line to an income more than twice as high. In other words, a family of three with a total earning capacity of about $28,000 would be eligible.
Trump’s plan does away with Medicaid for anyone above the poverty line by the year 2020. In addition, states would not receive matching funds to their expenditures. Instead, federal reimbursement would be a set amount determinized by the number of current enrollees.
2. Enrollment rules
Obama’s Act gave a window of time in which to enroll and late enrollees could still use the marketplace by paying a fine or proving they had reasons sufficient to explain their tardiness. Proof of extenuating circumstances, such as marriage or pregnancy, however, were a matter of self-reporting.
Trump’s plan narrows that window of time and requires more official proof of a reason for the delay.
While Obama required fees of those who failed to get insurance, Trump does not penalize the uninsured.
3. Age-based premiums
Though unfortunate, insurance companies cannot remain profitable unless older (high-risk) consumers are charged higher premiums. The Obama act limited the hike to three times that of a younger, healthier applicant. Trump’s raises the acceptable premium hike to five times the standard rates. This increase in revenue is meant to offset the costs to younger applicants who often don’t earn enough to cover costs. Democrats argue that this leaves poorer members of the aging population unprotected as they face impossible premiums. Republicans argue that more people will end up with coverage on the other end of the equation. How that pans out remains to be seen.
4. Tax credits
Obama’s plan called for tax credits to those who don’t receive insurance from employers and subsidized costs for individuals far above the poverty line (from 250% above for out of pocket costs and to 400% above according to income and local rates).
Trump’s plan would curtail that in some cases by not considering the going local insurance costs and by not subsidizing out-of-pocket expenses for higher-income brackets. In this case, some subscribers would benefit and some would lose out, depending upon their earnings, age and the current rates in the area.
In essence, the plans are still quite similar:
- there remain no exclusions of those with preexisting conditions
- young adults living at home are still eligible under their parent’s plans
- insurance companies cannot place caps on the amount of coverage they offer
- insurance plans are required to offer a range of basic benefits to everyone, including preventative medicine and maternity care
As with any new legislation, some things may work well and some won’t. So often it’s difficult to foresee both the unintended consequences and even unexpected benefits of shifting the details around. These differences between the healthcare acts are not enough to change the bottom line for healthcare in America: whether tweaked by Obama or Trump, these plans will continue to leave many Americans without care or with hefty out-of-pocket expenses they can scarcely afford. The difference is essentially one of who that will be.