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Obamacare vs Trumpcare Comparison

Obamacare vs Trumpcare Comparison
The American Health Care Act, unofficially coined Trumpcare, is a healthcare bill which will repeal and replace parts of the Affordable Care Act. It will make significant changes to the U.S. health insurance system, as well as unwind many of the taxes and coverage mandates currently in place. Below, our Obamacare vs Trumpcare comparison, highlights important aspects of each law you should be familiar with.

The bill passed the House of Representatives on May 4, 2017. It moves to the Senate where it will be reviewed then voted on. Here’s some key aspects of Obamacare and the American Health Care Act, and how they differ.

Obamacare vs Trumpcare Comparison

ObamacareCategoryTrumpcare
Requires every American have health insurance or pay a tax penalty.Individual MandateRepealThe mandate will be repealed, however, individuals who forgo health insurance for more than 63 days will pay a 30% surcharge on their insurance premiums for a year.
Requires businesses with more than 50 employees to offer health insurance to all employees or pay a penalty.Employer MandateRepealThis mandate will be repealed.
Increases Medicare taxes on the wealthy and imposed new taxes on medical devices, health insurers, drug companies, investment income, tanning salons and “Cadillac” health insurance plans.Taxes / PenaltyRepealWill repeal most Obamacare taxes and delays taxation on “Cadillac” health insurance plans to 2026.
Requires insurers to allow dependent children under the age of 26 to be covered by their parents’ policiesCoverage for DependentsKeepMaintains this requirement.
Requires all insurance plans to cover certain health conditions and services, such as ER visits, cancer treatment, annual physical exams, prescription drug costs and mental health counseling.Essential Health BenefitsReplaceShifts authority to individual states to define what benefits are mandated or opt out of the requirement entirely.
Expands Medicaid health insurance for the poor to cover more low-income individuals. Funding is based on an open-ended matching system whereby the federal government guarantees at least $1 for every $1 spent by the state.Medicaid CoverageReplacePhases out Medicaid expansion to reduce federal funding to the program by $880bn over the next decade. As a result of rolling back Obamacare’s Medicaid expansion, fewer people will qualify for Medicaid assistance.
Prohibits insurers from denying coverage or charging more to individuals who have preexisting medical conditions.Preexisting ConditionsReplacePermits states to obtain waivers to allow insurers to charge more for people with preexisting conditions. However, higher premiums will only apply to individuals with preexisting conditions who have a gap in coverage longer than 63 days.
Provides refundable tax credits for low-income individuals who purchase coverage via a health insurance “marketplace”, as well as cost-sharing assistance for some out-of-pocket medical expenses.SubsidiesReplaceProvides tax credits to people who need help paying for their insurance. This assistance is based off of the person’s age and not their income.
Insurers can charge older Americans no more than three times the cost of a younger American’s premium.Coverage for Older AmericansReplaceInsurers can charge older Americans five times as much as younger Americans.
HSAs require high-deductible health plans (HDHP) and significant funding.Health Savings Accounts (HSA)ReplaceHealth Savings Accounts will be more attractive, such as increasing annual contribution limits. See what 2017 HSA contribution limits are currently at.
Can deduct medical expenses if these costs exceed 10 percent of the household’s adjusted gross income.Tax DeductionsReplaceAllow people to deduct 100 percent of their health insurance premiums from their federal tax returns each year.
*Source: Trumpcare.com

Winners & Losers

Our Obamacare vs Trumpcare comparison identifies key differences which will impact every American. Depending on your viewpoint, a lot stands to be gained or lost under the new bill. So who are the potential winners and losers?

Winners

Young: Younger Americans, between the ages of 20 and 30, will benefit the most under Trumpcare. Their premiums will likely drop significantly. Insurance carriers will have the ability to sell a more stripped-down and cheaper plan. This will be attractive to the young and healthy, who do not require a benefit-rich policy.

Wealthy: Obamacare is funded in part through higher taxes on the wealthy, including a 3.8 percent tax on investment income and a 0.9 percent payroll tax for individuals earning more than $200,000 ($250,000 for couples). Trumpcare will eliminate these taxes.

Residents of low-cost states: Under Obamacare, subsidies are pegged to actual insurance costs in each region: higher where insurance (and medical care) are more expensive; lower where policies and care are more affordable. Under Trumpcare, tax credits are based on age groups, and each age group would be the same nationwide. Therefore, in areas where insurance costs are low, the net credit will be higher.

Losers

Older Adults: Older adults, specifically people in their 50’s and 60’s, will be the biggest losers under Trumpcare. The bill allows older adults to be charged as much as five times more than younger policy holders. The allowable maximum amount under Obamacare is three times. Even though older adults will receive larger tax credits, they will likely end up paying more. In addition, AARP states adults between the ages of 55 and 64 will see premium and cost-sharing increases of $3,600 more per year.

Low-income families: Trumpcare will repeal much of the provisions put in place to help low-income earners by Obamacare. It will terminate the expansion of Medicaid, which negatively impacts low-income families.

Still Uncertain

Children’s Health Insurance Program (CHIP) CHIP is a federal-state partnership program that helps families with low incomes get health coverage for their children. This program is up for negotiation this year, and whether Trump will renew the program or not remains to be seen.