Fact: It’s Really Unknown As of Today What Trumpcare Will Offer Americans
As of 11/29/2016, what we know is that President Elect Donald Trump has selected Tom Price, a Republican Representative for the state of Georgia as his choice for HHS secretary. He’s been a very vocal critic of the Affordable Care Act (Obamacare) and seemingly an advocate for Paul Ryan’s plan for healthcare reform. In the following outline we cover Speaker Ryan’s plan, as well as what we can hypothesize Trumpcare will offer. Please note “Trumpcare” is not the official term for whatever President Donald J. Trump’s healthcare reform plan will be called. It’s simply the slang term for it being used by Americans and journalists covering healthcare reform.
The 2016 election is over and the country is certainly anticipating some changes in the healthcare system known as Obamacare. The Affordable Care Act (ACA) of 2010 sought to tackle the rising costs of health care and prescription drugs, remove pre-existing conditions exclusions, improve women’s health issues, allow young adults to stay on their parents’ health plans longer, and find a way to alleviate chronic disease and drug abuse. Certain features of the law have been implemented in phases, and the new law was about halfway to its projected goal of completion sometime between 2020 and 2022.
President-elect Donald Trump has made it clear that he feels a full repeal and replacement of the ACA law is necessary. However, he recently sat down with President Obama in an attempt to understand the impact that the repeal would have on the nation. He specifically mentioned the possibility of keeping pre-existing conditions under Trumpcare. With the integration of the state marketplaces, the need to continue individual and self-employed coverage availability, and the subsidies for lower income people and their families to stay insured, there’s a lot at stake. Add the fees, taxes, and budget savings applied to balance the costs of the entire health insurance program, and “ripping it out by the roots” is no doubt going to be a monumental task. It may not have the desired result in the end.
Trump sees the Affordable Care Act continuing down a path of rising premiums and deductibles, shrinking networks, and declining service and care. He wants to work with Congress to replace the ACA with high-deductible plans and Health Savings Accounts (HSAs), and let individual states maintain and regulate their own health insurance programs. The Trump administration wants a patient-centered healthcare system with choices for health insurance and services at different levels of quality and affordability with a law that is fair to both businesses and families. We await more details on how Trumpcare can make this happen, how long it will take, and what it might cost.
In the past six years, 20 million more Americans who were previously uninsured were able to get health insurance. Those who could not afford a plan qualified for subsidies that allowed them to get minimum essential coverage. But others who could afford coverage before seem to be experiencing large increases in health insurance premiums on an annual basis. The 2017 increase averaged 25 percent for those not receiving any subsidies as plan choices tapered. Even Bill Clinton called that “the craziest thing in the world.” Pundits and government officials continue to debate whether the system is really working or whether it will eventually create an even greater burden. A repeal would leave 22 million Americans without insurance. The Congressional Budget Office (CBO) estimates the cost of repealing the ACA law to be $353 billion over 10 years.
What The “Trumpcare” Plan Will Probably Look Like
Trump will work with Congress to make sure a series of reforms can be put in place that ensures a free-market principle and a return to economic stability for everyone. A new health insurance law will expand access to affordable, quality health insurance plans and programs. Conservative Republicans have been trying over the last six years to pass reforms that address certain sections of ACA law as well as more complex plans for a replacement. These previous reforms will be offered again for consideration by Congress on the first day Trump is in office. The estimate for a replacement plan is about $70 billion on top of the repeal costs. Recouping costs will depend largely on his plans for Medicaid reform.
Trump feels the new healthcare system has failed, but his stance has shifted since the election, particularly following a meeting with current president Barack Obama. He appears to be more willing to work toward compromise on a law that means so much to so many millions of Americans. That means revisions to the current law and not necessarily a full repeal. One issue stands out: Trump and pre-existing conditions. While details are not yet available on his official websites, Trump has made it clear that he likes the provision of the ACA that requires insurers to cover people with pre-existing conditions, a feature that he will include in his health care plan.
However, Trump believes that the individual mandate requiring everyone to carry health insurance should be eliminated. His position may extend to larger employers who were forced to provide plans to employees. He would rather return to high-risk pools for people who do not maintain continuous coverage, and he would create a tax deduction for the purchase of insurance plans rather than a refund of premiums through a tax credit. It would work the same way as it does when businesses take deductions for health insurance premiums.
Trumpcare And Purchasing Insurance Coverage Across State Lines
Insurance companies would be allowed to sell coverage in other states under a common set of licensing regulations rather than by the rules applied by each state. This has the potential to cover 400,000 to 700,000 people who may otherwise lose coverage after the repeal. Trumpcare would promote the use of Health Savings Accounts (HSA’s) that would continue to be tax-free and allowed to grow in value tax free. These accounts would be passed on to heirs without the death tax penalty and could be used by any member of a family. HSA’s are flexible and secure, however HSA’s are not going to be a great option for families that are struggling to keep a roof over their heads, let alone save money for future healthcare necessities.
Trumpcare And How It Might Impact Medicaid
The Medicaid program is the health insurance program for low-income U.S. residents that currently covers 70 million people. It offers low-cost or free care depending on the level of assistance needed. It also covers long-term services and financing for certain hospital, clinics and states. Amounts of aid, incentives and grants are open-ended and vary depending on federal and state regulations. Reforming the Medicaid system has been a subject of debate for decades. Trump is ready to address and fix problems within the program.
Trump would like to reverse the Medicaid expansion tied to the ACA law and replace it with Medicaid block-grant funding instead. This would set the amount that each state receives for healthcare, and each state could budget accordingly. But 31 states expanded Medicaid eligibility requirements under the ACA law and received a large financial incentive to do it. Along with hospitals and providers, they may fight the reversal of the process.
The House Republican Plan for health spending would allow a choice of funding per capita or by block-grant. This has the potential to save $1 trillion in program costs, but we currently do not have an idea on the size of the exact allotment per state. We could assume that they would be similar to pre-Obamacare amounts and that they allow for inflation.
Many states already offer greater benefits than minimums required by the Medicaid program. State governments could create their own method of dispensing Medicaid funds without dealing with federal intervention. Greater state involvement gives individual states a large incentive to find and eliminate fraud, waste and abuse in the system, which has been driving the need for reform. Trump wants state governments to continue to cover low-income individuals and families even after an ACA repeal.
Trump will review all options for Medicaid and make sure that those who want health care coverage can have it. This is the largest component of the repeal and replace plan that could potentially recoup costs of the repeal.
If you are one of the millions receiving subsidies for health care now, this issue is one you will want to keep an eye on. While some subsidies will be taken away, Trumpcare may replace them with equal or better options. Either way, not knowing what’s in store can be troublesome. As details emerge closer to 2018, we’ll keep track of the changes to the current system. Trump said in a television interview that coverage will not lapse as a result of the changes but will continue uninterrupted.
Trumpcare and Pre-Existing Conditions
Trump has vowed to repeal and replace Obamacare on his first day in office. He has also promoted universal health insurance coverage, which would imply including those with pre-existing conditions. Many feel that his proposals won’t work without the individual mandate that requires healthy people to purchase coverage, thereby generating the necessary funds to cover those who are ill. Most Americans concerns and greatest fears are regarding if those who are currently receiving treatment for life-threatening illnesses like cancer, will now be dropped by insurance carriers and no longer receive treatment. If someone were to stop receiving chemo-therapy treatment in the middle of their cycle, it could very well lead to their death.
According to a recent Forbes article, Trump has always supported covering people with pre-existing conditions, commonly referred to as guaranteed issue. In 2016, 21 million people needed to sign up under Obamacare to make the math work in terms of cost. Nine million young and healthy people failed to sign up, choosing to pay the penalty fee at tax time instead. While 12 million people did sign up for coverage, it wasn’t enough to cover the costs of those with chronic health issues, and many insurance companies left the exchanges due to financial losses.
Group health insurance plans through employers have always offered guaranteed-issue health insurance. The premiums are based on a large master policy that does not look at the health of individual employees. It simplifies the process since everyone being hired must be offered a plan.
Coverage for pre-existing conditions is available. The problem is that it’s just not affordable to an individual or family that needs the coverage. Insurance companies will offer plans at higher premiums to cover the additional health costs, but studies show that 71 percent of chronically ill people were uninsured because it is far too expensive.
The Affordable Care Act (ACA) subsidized 85 percent of enrollees to create affordable policies. Trump will offer financial assistance more directly in the form of tax credits or deductions. There are no details yet on the program that will be replacing the ACA, but there are some clues provided by Vice President-elect Mike Pence and House Speaker Paul Ryan. A two-part system will separate individuals who maintain their insurance coverage uninterrupted from those who let their coverage lapse.
If you have a plan now, you will want to renew it. You cannot be dropped, but if you fail to pay your premium when it’s due, it will put you into a high-risk premium pool and cost you more for coverage. If you switch from an employer plan to the individual market, you will need to avoid a lapse from one plan to the next. This also encourages healthy people to maintain health insurance now or risk higher premiums should they become sick later.
Trump will use the same state-based high-risk pools that were shut down after the health insurance marketplaces opened in 2014. Thirty-five states maintained their own various high-risk pools through non-profit associations contracted with insurance companies. The plans charged much higher premiums – up to 250 percent higher than a healthy person’s plan – and had annual deductibles up to $25,000 with very limited benefits.
The new health insurance program must work for the entire industry, including the consumer, to avoid market collapse and large premium increases. Recent rate hikes are expected to average 22 percent because of low enrollment numbers. Paul Ryan talks about federally funding these pools with at least $25 billion and placing caps on their premiums. Prior to the ACA, states subsidized their own programs up to 50 percent just to cover operating costs. Those who have been in these high-risk pools before Obamacare say they are concerned about losing their coverage and going back into these pools.
New tax credits and deductions, along with potential funding provided to each state to run high-risk pools, may take the sting out of premium costs for much-needed health insurance while helping Trump to deliver on the promise of universal coverage.
Recently, Trump has explained that he intends to maintain the pre-existing conditions law along with the provision that allows young adults to remain on their parents’ policies until age 26. In an interview with CBS, Trump said he would try to retain what he felt were “the strongest assets” and put the new healthcare system in place to further decrease the cost of healthcare.
It’s not yet clear how he will manage to keep some aspects without keeping the law intact. Insurance companies may not be able to deny coverage to those with pre-existing conditions under Trumpcare, but without the individual mandate, many people may not make the effort to seek coverage. Only time will tell if parts of the law can stand on their own and still make a positive impact. There are many people currently counting on it.
Trumpcare And Prescription Drug Costs
One of the biggest health care spending issues is the cost of prescription drugs due to research and development costs (R&D), and patents that allow market exclusivity that leads to unaffordable medications. Generic drugs do not get approved by the Federal Food and Drug Administration (FDA) until the patent period is over. The ACA wants to fast-track approval of existing biologic drugs that require injections or close observation of the patient.
Trump wants to allow drug importation from other countries that are equivalent in quality but far less expensive. While he supports price transparency of all hospitals, facilities, clinics, physicians and insurance providers, he has not made it clear if prescription drugs are included. He has mentioned aggressively negotiating prescription drug prices for the Medicare Program, but there is no information regarding this on his website or his new transition website.
The pharmaceutical industry has been accused of taking advantage of the American people, and government intervention to correct it seems to be the consensus on both sides. You may be one of those already purchasing medications from Canada through mail order programs and realize the significant savings this provides, especially if the drugs are for chronic issues. Trump’s administration may make this option a legal alternative for its citizens while making information available to everyone on how to find and purchase less expensive drugs.
Trumpcare And Drug Abuse and Mental Health Coverage
A popular prescription painkiller is now being used more often for recreational purposes than for pain. Opium-derived drugs, like heroin, are a major health problem causing dependence or addiction. The number of annual overdoses makes it a health epidemic at a combined cost of $55 billion in health care, lost wages and court expenses. The ACA addresses this problem via changes in the prescribing practice, improvements in treatment for opioid use disorders, and better enforcement of laws pertaining to access, sale and use of the drugs.
Trump will stop the illegal drugs at the source by building a wall at the U.S.-Mexico border. He also wants to change shipping laws that leave loopholes allowing illegal drugs into the mail system. Trumpcare would remove Medicaid policies that do not allow for inpatient addiction services and increase access to naloxone for recovery. He believes courts need incentives at state and local levels to mandate the treatment of addiction.
The problem of drug abuse is tied to the pharmaceutical industry as well, focusing on drugs rather than disease prevention. Medical providers are often given incentives and encouraged to use certain medications more than others regardless of long-term health consequences. A patient-centered health system, with an emphasis on healthy living, would not enable drug companies or hospital systems business initiatives to come before a patient’s well-being.
Physical health problems are often linked to mental and behavioral health issues. Monitoring pre-existing conditions under Trumpcare will help people who suffer from a wide range of health problems to stay informed about ongoing care, especially when it comes to coordination of care among providers. Reforming programs to give incentives to health providers that allow families access to education and support are being developed now, with Trump backing the effort.
Trumpcare And Women’s Health
The ACA expanded coverage for reproductive health services to millions of women that included contraceptives and abortion services. Trump’s healthcare plan is not in favor of abortion unless there are circumstances of rape, incest or a life-threatening situation, and would defund Planned Parenthood if the organization does not remove abortion from participating clinics. Instead, money that might have gone to Planned Parenthood would go to community or local health centers. Trump may also install pro-life justices to the Supreme Court to overturn Roe v. Wade, but make the Hyde Amendment permanent law with legislation called the Pain-Capable Unborn Child Protection Act, which addresses the specifics of late-term abortion.
Repealing the ACA would take away 10 guaranteed health benefits, including maternity care before, during and after labor, free preventive services and contraceptives. How Trump intends to promote women’s healthcare is also uncertain.
Women have a number of unique health concerns, and the healthcare industry has not paid particular attention to these concerns over the years, which is why women’s health care – including prevention and maintenance – remains a top priority. The financial and emotional costs are high when it comes to women and health care. From contraceptives to maternity care and treatment for certain types of cancer, these issues affect the population at large, not just women.
The Shift from Left to Right
With the election of Trump as president, representing the Republican Party, there’s been a shift in mentality at the federal level. That shift involves reducing federal regulations and the role of the federal government when it comes to health care while still offering less expensive health insurance to the general public.
Trump’s healthcare plan requires congressional approval. Congress will need to pass legislation, for instance, to enable insurance companies to sell across state lines without the added burden of addressing licensing problems. It will also need to re-establish high-risk pools for people with health problems who need more care but who haven’t maintained continuous coverage. If you’ve got a chronic health problem, then you will need to keep your health insurance in place to avoid additional costs.
Republicans in congress have voted more than 50 times to repeal Obamacare. Although they have a majority in both houses now, the minority party can still block legislative attempts in the Senate. Conservatives can, however, starve the program from funding, which is a common tactic for removing unwanted legislation.
The United States is one of the few Western countries where health insurance is provided by private companies rather than the government. Changing the healthcare system is complex, and most insurers have finally accepted that they are compelled to offer coverage to people with pre-existing conditions without charging higher premiums. They have been through many financial adjustments to get there. Any major change could take months involving hearings, debates, and lobbyists arguing for hospital systems, pharmaceutical companies and consumers.
After looking at countries like Canada and most of Europe, the U.S. resists the idea of socialized medicine over the tax hikes required and the delayed availability of services when you really need them. Problems with the Veteran’s Administration offer a prime example of what could happen nationwide under socialized health care.
The Obama administration chose a mix of private and public programs, products and services. Trumpcare is a mix as well, but it will decrease government control and increase private free-market enterprise. As competition increases in the health insurance and pharmaceutical industries, it will naturally lower costs. President Obama relied on regulation through government policies and capped limits.
Trump knows that repealing the ACA would not solve nationwide health care issues, and that is why he spoke with President Obama in order to continue working with Congress, the Senate and the states to find solutions.
The official Trump website explains the need to:
- Protect the individual’s right to healthcare
- Protect all human life from conception to natural death, which includes unborn babies, the elderly and the disabled
- Focus on research and development in the healthcare industry
- Put greater focus on the need for new and innovative medical products by reforming the Food and Drug Administration
- Modernize Medicare to handle increases in the retirement age population
- Provide funding that enables states to research and develop methods to deliver low-income healthcare options
Believing the Affordable Care Act has become an economic burden passed by divisive and partisan conflict, Trump wants to revive the economy to turn things around in health care. Obamacare will be difficult to repair unless Trump’s administration and a Republican congress can agree to work toward free-market reforms to the healthcare industry. It may or may not require a full Obamacare repeal.
Trump is asking for cooperation to eliminate the individual mandate and give Americans a choice to either purchase insurance or not. Purchasing insurance plans in other states is part of that choice and requires modifying the current laws. Competition between insurance companies will naturally bring costs down to reasonable levels for everyone participating in Trump’s healthcare plan.
Pricing transparency is needed from healthcare providers, doctors, clinics and hospitals. It’s an ongoing battle from the old administration to the new one. Individuals should easily be able to shop to find the best value for exams, tests or other medical procedures. You would be hard-pressed to find someone to argue that point. No one likes to blindly make purchases or feel they have no alternatives.
Drug providers have been unnecessarily protected by barriers to entry, and a free-market system is one solution to less expensive, safe, quality products. This is, again, a common argument of both administrations. Congress will need to cooperate with Trump instead of special interest groups in a way they were unable to with the Obama administration. Pharmaceutical companies are in the private sector, but they provide a public service, making it necessary for consumers to be allowed the choice to access imported, safe and dependable drugs from overseas for more affordable options.
The reforms under Trumpcare are a starting point. Some will be considered worthwhile if they achieve lower costs and provide the financial security that the American public needs. New actions will be proposed in other areas for the same purpose. Enforcing immigration laws and growing the economy through American manufacturing and jobs will affect the healthcare industry as well. Trump argues that spending $11 billion annually to provide health care to illegal immigrants is something the country cannot afford, and enforcing current immigration laws would relieve a financial burden on state and local governments.
All of these changes will provide a necessary boost to the economy and make U.S. citizens less dependent on subsidized government programs like Medicaid and the Children’s Health Insurance Program (CHIP).
Repealing the Affordable Care Act completely seems avoidable since rules, regulations and other smaller changes in legislation would weaken the law and enable more positive changes. By keeping the initial structure of the ACA, Trump can work toward reshaping the law into a more conservative image, with features like high-deductible health plans and HSAs, while protecting people with pre-existing conditions.
House Speaker Paul Ryan has put forth a health care plan option that also looks at repealing the Affordable Care Act and is very similar to Trumpcare. His proposals include the use of health savings accounts, increased pricing transparency in health care and removal of barriers to entry in the pharmaceutical industry. Perhaps Ryan, Congress members from both sides of the aisle and President-elect Trump will set aside their differences for the purpose of making the American health care system great again.
Trumpcare And HSA’s (Health Savings Accounts)
Are You Wondering What The Heck Health Savings Accounts Are? Millions of people have searched for them since the election on November 8th, so why don’t we get into the details of what an HSA is, and why they’re going to be a large part of Trumpcare in 2017 and beyond.
Health Savings Accounts (HSAs) are one of the main components of President-elect Donald Trump’s health care plan. They have been around for over 10 years, created while President George Bush was in office, but they’re underused. Republicans like them because they allow the account owner to prioritize their own health expenses within a set budget.
With HSAs, consumers manage spending until they reach the deductible amount. In order to be paired with your medical plan, health savings accounts require minimum deductible amounts and limits on contributions. For 2016, the deductible limit was $1,300 per individual or $2,600 for a family. You can choose your doctors, facilities and services. Out-of-pocket expenses are capped at $6,550 for an individual plan and $13,100 for families.
The contribution limits for 2016 are $3,350 for an individual and $6,750 for a family plan. If you are over 55, you may make catch-up payments of up to $1,000.
An HSA is not a health insurance plan. It’s a savings account that can only be used for medical expenses, which include dental expenses and prescription medications. A high-deductible health insurance plan must be paired with it. Your insurance provider or human resources department knows which health plans are HSA qualified. Learning more about your health care options in general helps to make wiser decisions regarding payment for health services.
More than 60 percent of employers offer high-deductible plans with HAS combinations, up 45 percent between 2014 and the middle of 2016 according to consulting firm Devenir. Enrolling in HSA accounts is separate from health care sign-ups and may be one reason they are underused. Contributions are made on a pre-tax basis; the accrued interest and money withdrawn for medical payments is not taxed either.
Trumpcare And HSA’s Get Along Like Peas And Carrots
Trump believes that HSAs can replace the current health insurance options offered by Obamacare, and he thinks that they may be just as affordable. Until recently, HSAs have been a well-known product among those with higher incomes who have larger tax liabilities. If you don’t pay any taxes, a tax credit is not going to help make this plan more affordable. Health savings accounts provide protection against catastrophic illness and injury, they use tax-exempt money to pay medical expenses, and they can be a good option for many people.
The Trumpcare plan is not specific about how HSAs will be useful, but House Speaker Paul Ryan’s A Better Way gives some indications. In it, he suggests increasing the maximum contribution to the account, letting those with impending medical expenses set up an HSA and use it within 60 days, and allowing spouses to contribute extra payments to the same HSA to reach the maximum limit. They would also offer accounts to American Indians as well as military personnel and their families.
There may be multiple forms of HSAs offered and a possible monthly tax credit to offset health care costs. An additional leftover credit could also be deposited into another account and used for other medical care, like over-the-counter drugs.
Currently, HSAs can only be used for premium payments in certain situations. For health savings accounts to be most beneficial, they will need to be expanded and offer broader benefits. People with low to moderate incomes may not be able to utilize HSAs since these accounts require saving extra funds for medical care, an option that many families in America don’t have. Without subsidies, there needs to be another way to make them affordable to those who do not have enough income to initially fund them. Government funding could aid the HSA program to make it more affordable.
HSA account balances roll over year to year while the similar employee-sponsored flexible spending account (FSA) does not. If you have a flexible spending account (FSA) or are enrolled in Medicare, Medicaid or Tricare, you will not be eligible for an HSA. It’s possible that changes to HSAs under Trumpcare may enable those with government-sponsored health care plans to use them in the future.