President-Elect Donald Trump has promised to repeal the Affordable Care Act as soon as he gets in office, and with Republicans now holding the majority in both houses of Congress, this is likely to happen.
In addition, though, Trump has pledged to replace Obamacare with something better, as has House Speaker Paul Ryan. Neither has released a comprehensive plan, but they have still given us a pretty good idea of what a potential post-Obamacare world might look like. In general, Republicans wants to eliminate Obamacare’s health care exchanges entirely, rolling back regulations and giving individuals tax subsidies with which they can buy private insurance.
So what are the specifics of Trump’s plan? Does his plan align with that of Paul Ryan? And what will happen to the millions of Americans who have received coverage under the Affordable Care Act? Here’s what you need to know.
1. Allow Insurance Companies to Sell Across State Lines
Although Donald Trump did not provide many details about his Obamacare replacement plan during the campaign, one idea he was very consistent on was that he wanted insurance companies to be able to sell across state lines.
“You get rid of the lines, it brings in competition,” Trump said at a Republican debate in February. “So, instead of having one insurance company taking care of New York, or Texas, you’ll have many. They’ll compete, and it’ll be a beautiful thing.”
This is an idea also proposed by Paul Ryan in his policy agenda, “A Better Way.”
“Our plan allows you to purchase a plan licensed in another state, a step towards making the insurance market more competitive, and giving you the power to shop broadly for more affordable policies,” Ryan’s agenda says.
Insurance companies actually already can sell across state lines, but they have to adhere to the regulations of whatever state they are selling in. Under Trump and Ryan’s plan, companies would only have to adhere to the regulations of the state they’re located in. Republicans believe that giving insurance companies fewer regulations will lower costs and give consumers more options. Critics of this idea worry that insurance companies will all relocate to the state with the most lax regulations.
2. Eliminate the Individual Mandate
President-Elect Trump also wants to eliminate the individual mandate in his Obamacare replacement plan. This is the requirement under the Affordable Care Act that everyone must purchase health insurance or they will be fined. Trump, and most Congressional Republicans, do not believe that individuals should be forced by the federal government to buy a product from a private company.
“Our elected representatives must eliminate the individual mandate,” Trump’s website reads. “No person should be required to buy insurance unless he or she wants to.”
This individual mandate is also removed in the health care plan proposed by Paul Ryan.
Trump has flip-flopped in this issue, saying at a Republican debate in February that he wants to keep the individual mandate.
“Well, I like the mandate,” Trumps said. “I don’t want people dying on the streets.”
3. Insurance Companies Can’t Deny Coverage Because of Pre-existing Conditions
One aspect of the Affordable Care Act that Donald Trump and Congressional Republicans like, however, is that it ensures that insurance companies cannot deny patients coverage based on pre-existing conditions. Paul Ryan’s plan also involves maintaining this provision.
When asked during a recent 60 Minutes interview whether he would make sure companies still can’t deny coverage based on pre-existing conditions, Trump said, “Yes. Because it happens to be one of the strongest assets.”
This was not a new development, and Trump said throughout the campaign that he would keep this intact.
Critics argue, however, that it’s not possible to keep the pre-existing conditions provision while also getting rid of the individual mandate as Trump has pledged. The individual mandate was added to Obamacare as sort of a trade-off to the pre-existing conditions clause, and it was meant to ensure a “death spiral” did not take place. In other words, if companies can’t deny coverage to anyone based on their health, and Americans don’t have to buy health insurance, they could simply wait until they become sick to get coverage. Therefore, a higher and higher percentage of the insurance marketplace would consist of sick people, and costs would skyrocket.
Trump does not think that this is the case, and he thinks an Obamacare replacement would be perfectly fine without having an individual mandate. When specifically asked during a Republican debate about the fact that insurance companies say that the pre-existing conditions clause must be offset with a mandate, Trump said that this isn’t true.
“I think they’re wrong 100%,” he said. “Look, the insurance companies take care of the politicians. The insurance companies are making an absolute fortune. Yes, they will keep preexisting conditions, and that would be a great thing.”
4. Tax Deductions & Health Savings Accounts
Another element of Trump’s Obamacare plan is to allow individuals to deduct the cost of their health care premiums from their personal tax returns.
“Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions?” Trump’s proposal reads. “As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want healthcare coverage can have it.”
Trump also wants to put an increased focus on Health Savings Accounts, which are currently available to patients enrolled in high-deductible plans. Those plans traditionally have relatively low premiums, and so the idea is that the money that you might have spent on a high premium you instead will put into the HSA, which is not subject to federal income tax. The money rolls over year to year, and it can only be spent on qualified medical expenses.
The president-elect wants to expand access to these accounts, hoping to get young people using them.
“These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans,” his proposal reads. “These funds can be used by any member of a family without penalty.”
Trump hasn’t provided many specifics beyond that, but House Republicans are in agreement, and they want to increase the yearly HSA contribution limit. They also want to allow spouses to make contributions to the same HSA and expand HSA accessibility.
5. No Gap Between Repealing & Replacing
A major concern for a lot of people is the idea of Obamacare immediately being repealed, only for a replacement to come years down the line. President-Elect Trump has pledged that this will not happen.
Trump said on 60 Minutes, “No, we’re going to do it simultaneously. It’ll be just fine. We’re not going to have, like, a two-day period and we’re not going to have a two-year period where there’s nothing. It will be repealed and replaced.”
But Trump has pledged to repeal Obamacare on his first day in office, which is now just over two months away. Meanwhile, Congress does not seem anywhere close to agreeing on an Obamacare replacement bill.
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