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March 24, 2017

7 Biggest Changes Under Trump’s Obamacare Replacement

Obamacare replacement

For the past seven years, the Republican Party has promised voters it would repeal and replace Obamacare. This week, President Donald Trump has his sights set on fulfilling that promise.

The huge, big league American Health Care Act is the fabled Obamacare replacement. The bill is currently before the U.S. House of Representatives. If the House passes the bill, it will go next to the Senate. And only when it passes Senate scrutiny will the bill land on the President’s (presumably gold-plated) desk to be signed.

So what does Trump’s Obamacare replacement actually do? Is it as bad as the Democratic Party feared?

While the merits of the bill are obviously subject to debate (even many Republicans are against it), the American Health Care Act does not fully dismantle Obamacare and smash it up into tiny pieces. But it does bring sweeping changes to the current system.

Here’s a quick summary of the American Health Care Act as it stands today.

1.      Eliminates Penalties for the Uninsured

Obamacare levies a fine on people who do not have health coverage. It also impacted employers, requiring those with 50 more employees to offer health insurance to 95% of the workforce. These measures were designed to encourage people to purchase insurance.

The American Healthcare Act would end these requirements, instead levying a 30% surcharge on insurance premiums for new healthcare plans if the purchaser had no insurance for 63 days the previous year.

2.      Increases Age-Based Premium Caps

Under Obamacare, insurance providers cannot charge their oldest customers more than three times the premiums charged to their youngest customer. The Act plans to increase this cap to five times the youngest customer’s premium.

3.      Limits Federal Funding for Medicaid

The American Health Care Act would bring forth three major changes to the way the federal government awards states funding for Medicaid. All would likely result in fewer people enrolled in Medicaid and fewer federal funds in state pockets.

First, Trump’s Obamacare replacement would remove the option for states to expand Medicaid to individuals making up to 138% of the federal poverty line using federal funding.

Second, it would limit Medicaid reimbursements based on the number of patients enrolled and the average medical care costs per state.

The Act would also give states the option of requiring Medicaid recipients to pursue a job or job training in order to continue receiving Medicaid. This would not apply to people who are pregnant, on disability, or working as a caretaker for a family member.

4.      Ends Federal Funding of Planned Parenthood

The American Health Care Act would end all federal funding of Planned Parenthood for one year and prohibit federal subsidies for plans covering abortion.

5.      Establishes New State Grants

Perhaps surprising given the slew of funding cuts, the Obamacare replacement also introduces a $100 billion fund to help states stabilize their healthcare markets and insure low-income individuals.

6.      Repeal Taxes on Insurers, Pharmacies, and Others

What are the insurance companies getting out of the bill? A massive tax cut, for starters.

Obamacare levied taxes on health insurance providers, pharmacies, companies that produce medical devices, over-the-counter medications, and tanning salons. The new bill would sweep all those taxes away, to the tune of $200 billion in lost tax revenue.

7.      Cut Taxes for Individuals

Well, the bill sounds great for insurance companies, but what about the common man? Scratch that – what about his boss?

Fear not – the American Health Care Act also ends Obamacare taxes on payroll and investment income tax for wealthy individuals.