Difference between Trumpcare and Obamacare

The repeal of the Affordable Care Act – also known as Obamacare – is one of the priorities of the Trump administration. During his 2016 Presidential campaign, Donald Trump focused on the importance of modifying the existing health care system in order to amend its flaws and repair the damage caused by the Obama administration.

Indeed, the American health care system is one of the most expensive in the world (with an annual spending per capita of over 9.000$) – but definitely not the most efficient. In fact, according to the 2015 WHO report, the U.S. counts more cases of preventable maternal mortality than most high-income countries and the “Islamic Republic of Iran, Libya and Turkey.” The report also highlighted how, every year, around 1200 women in the United States suffer complications during their pregnancy. Yet, the cost of maternity care in the country exceeds 60 billion US dollars every year.

With the Affordable Care Act, Obama tried to revolutionize the health care system of the country but many flaws remain. Yet, is the Trumpcare the solution to all American healthcare-related problems?

Obamacare vs Trumpcare

During his campaign and since the beginning of his mandate, Donald Trump has been accusing Obama and his Affordable Care Act of having cost millions of dollars to the U.S. citizens and of having destroyed competition amongst insurance providers. Therefore, few months after his election, Trump issued the American Health Care Act or Better Care Reconciliation Act (BCRA), which is currently being voted by the House and the Senate. Despite the optimist attitude of the President and his unconditional support to the new bill, the BCRCA has not been approved, and has been opposed by many Republicans as well. Trumpcare proposes age-based tax credits to replace governmental subsides and pushes for the removal of many Obamacare’s requirements and restrictions.

Before analyzing the main differences between Obamacare and Trumpcare, it is worth noting that the original Republican bill was revised by the Senate, which proposed to:

• Loosen insurance requirements;
• Keep some of the Obamacare taxes on wealthy individuals;
• Set aside additional federal funds to facilitate the stabilization of health insurance markets; and
• Increase funds to oppose opioid addiction.

However, besides few minor changes, the Senate Republican bill – which was proposed in June 2017 – maintained most of the provisions originally set out in the House legislation. According to several media agencies and politicians, the new bill would cause major losses in insurance coverage – in particular for low and middle-income persons. Furthermore, the new bill proposes a gradual cut back in federal aid for indigent citizens and a roll back of the Medicaid. According to a CBO analysis of the legislation, should the bill be approved, “23 million fewer people would have insurance over the next decade.”

To understand the main differences between Obamacare and Trumpcare, we need to focus on each aspect separately.

Changes in insurance costs

One of the main critics of the Republicans to the Affordable Care Act concerns the excessive costs of the health care system. The Senate GOP health care bill proposes major changes in the structure of insurance markets and financial subsidies for low and middle-income citizens. Yet, although the BCRA would reduce the cost of health plans, it would cause a dramatic increase of the price of insurance premiums for low and middle-income consumers.

• The Affordable Care Act provides subsidies to people earning less than 48,000$ a year and makes sure that the amount of the subsidy is directly linked to the citizen’s income and to the cost of insurance in the area; and
• The Senate GOP proposal would maintain the tie between the citizens’ income and the amount of subsidy but would stop at 350% of poverty level; furthermore, subsidies would be linked to costs of “skinnier” (less comprehensive) health care plans.

Trumpcare also includes provisions regarding taxes and tax cuts:

• Obamacare includes higher taxes for citizens who earn over $250,000 and for companies and corporations with more customers; and
• Although the Senate bill keeps two of the Obamacare taxes on wealthy customers, the GOP legislation proposes huge tax cuts for wealthy citizens, insurance companies and medical device makers.

Individual and employer mandate

Some of the most striking differences between Trumpcare and Obamacare concern individual and employer mandates.

• Obamacare requires people – who can afford to pay for health care – to purchase a health insurance or to pay a tax penalty;
• Trumpcare does not include tax penalties for those who do not purchase an insurance; yet, individuals who remain uninsured for over two months will have to pay a 30$ surcharge and will have to wait a period of six months before buying a new plan.

Furthermore, the Affordable Care Act requires larger companies to provide insurance coverage to their employees while the American Health Care Act would eliminate this provision.

Medicaid

Medicaid is a program signed into law in 1965 that provides health coverage to over 69 million low-income Americans, including children, elderly, persons with disabilities and pregnant women. Medicaid is funded by the central government and individual states.

• During the Obama administration, Medicaid was expanded and perfected – thus allowing millions more to purchase affordable health coverage; furthermore, 32 states – including New York, Indiana, California and Arizona – provided more funds to the program; and
• The stance of the Republican Party on Medicaid is not quite clear yet. The GOP bill would allow Medicaid to exist until 2020 but the program would then be replaced with a block grant or a fixed per capita cap; furthermore, individual states would have more power to impose restrictions on citizens benefiting from Medicaid.

Guaranteed coverage and preexisting conditions

Another major difference between the two legislations concerns guaranteed coverage and preexisting conditions. Although in both cases people with preexisting conditions cannot be denied health coverage, the GOP bill would allow insurance companies to pose limits on some coverage.

• Under Obamacare, insurance companies are obliged to provide coverage to persons with preexisting conditions without restrictions and cannot charge sick people more; furthermore, elderly consumers can only be charged three times more than young consumers; and
• Under Trumpcare, insurance companies could pose certain limits on the coverage provided to people with preexisting conditions and to charge elderly people up to five times more than younger consumers.

Women’s health coverage

The plan proposed by the Trump administration would seriously undermine the Planned Parenthood program and might have serious consequences on lower-income, single women.

• Under the Obamacare, insurers cannot charge women more than men and need to provide women with some basic benefits, including contraception, pediatric and maternity care; furthermore, the Planned Parenthood program provides health coverage and medical services to low-income, pregnant women – although abortion is not included;
• Trumpcare maintains the prohibition for insurance companies to charge women more, but allows states to pose limitations on the basic benefits offered to women (i.e. contraceptives and maternity care could be dropped); furthermore, low-income women might be denied essential services and would be barred from purchasing Medicaid funds to seek abortion.

Summary

Throughout his presidential campaign and since the beginning of his mandate, Trump has expressed serious concerns and critics on the impact of the Affordable Care Act – also known as Obamacare – on the health care system of the nation. The United States has one of the most expensive health care systems in the world; yet, the services offered are not proportionate to the amount of money spent by taxpayers and leave many low and middle-income citizens without adequate coverage. Seeking a major change in the health care system of the country, Donald Trump proposed the American Health Care Act – also known as Better Care Reconciliation Act or Trumpcare. Despite various differences, the two programs have few features in common:

• In both cases, insurance companies are obliged to provide some essential benefits to all consumers;
• In both cases, insurance companies cannot charge people with preexisting conditions more nor can they refuse to offer sick people health coverage;
• In both cases, young adults under the age of 26 can be covered by their parents’ insurance plan; and
• In both cases, insurance companies cannot set annual or lifetime limits on how much they have to pay to cover an individual.

However, Trumpcare has not been approved yet and has been opposed by the entire Democratic Party and by many Republicans as well. The Senate further modified the bill proposed by the House but the deadlock has yet to be solved. One of the main issues of the Republican bill is the lack of transparency: the absence of a clear financial plan has left many wondering on the economic implications of such drastic change to the health care system. Furthermore, according to several media outlets and political analysts, Trumpcare would increase the number of uninsured by 23 million in few decades, would make health coverage more expensive for low and middle-income Americans, and would cost taxpayers around $420 billion – amount that could possibly be lowered to $200 billion.

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