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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Requires every American have health insurance or pay a tax penalty.Individual MandateRepealThe mandate will be repealed, however, individuals who forgo health insurance for more than 63 days will pay a 30% surcharge on their insurance premiums for a year.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50 employees to offer health insurance to all employees or pay a penalty.Employer MandateRepealThis mandate will be repealed.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.

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2017 Covered California Rates Surge
2017 Covered California rates surge 13.2%. The health insurance marketplace, where California residents can go to shop for coverage and possibly receive premium assistance, will end it’s two year run sans a double digit rate increase. Furthermore, the sharp increase will likely play a significant role during this year’s upcoming presidential election.

The Reason

The spike in Covered California rates was driven by its two largest insurers, Blue Shield of California & Anthem Blue Cross. Blue Shield of California said its average hike was 19.9%, the biggest statewide increase. Meanwhile, Anthem Blue Cross averaged an increase of 17.2%. Together, the insurance carriers account for roughly half of Covered California’s enrollment. Peter Lee, Covered California’s executive director, said prices for 2017 reflect the rising cost of care, not efforts by insurers to increase their profits. Furthermore, proponents of Obamacare will argue that federal subsidies spare most consumers from the full impact of the premium increases.

Additionally, lenient rules for special enrollments are partially responsible for the leap in rates. The designated signup period outside of open enrollment have allowed some people to enroll only until they needed care. Insurers complain these people tend to generate more claims and higher costs.

The Silver Lining

Premium increases in California will vary widely by region and by insurance company. It could, however, force cost-conscious consumers to move to lower metal-tier plans.

Minus One

Lastly, Covered California announced United Health Group would be leaving the exchange after just one year. The nation’s largest health insurer posted significant losses in the individual market.

Below is the tentative list of insurance carriers selected for the 2017 exchange:

  • Anthem Blue Cross
  • Blue Shield of CA
  • Chinese Community Health Plan
  • Health Net
  • Kaiser Permanente
  • L.A. Care Health Plan
  • Molina Healthcare
  • Sharp Health Plan
  • Oscar Health Plan of California
  • Valley Health Plan
  • Western Health Advantage

Source: Kaiser Health News

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2015 Obamacare Open Enrollment Guide
Originally, the 2015 Obamacare Open Enrollment was slated to begin on October 15th, 2014. It is now November 15th. Some say the reason for the move is so enrollment numbers and rate increases would not impact Mid-term elections on November 4th. Whatever the intent is behind pushing back the dates, the fact remains, open enrollment is the only time of year you can get an individual or family medical plan that count as minimum essential coverage without a “qualifying life event”. (what are qualifying life events?)

Below is a quick overview of the most important things to know about the Affordable Care Act Open Enrollment, or more popularly known as Obamacare.

Open Enrollment Dates

The Open Enrollment period for 2015 coverage is November 15, 2014 to February 15, 2015. If you don’t enroll in coverage by then, you won’t be able to purchase health insurance in 2015 until the next Open Enrollment period beginning the following year, and may incur penalties or fees.

When Does My Current Coverage End

If you’re enrolled in a 2014 plan, your benefit year ends December 31, 2014. If you’d like to continue coverage in the same plan, you can renew your current health plan or choose a new health plan during the 2015 Open Enrollment period. When renewing your same plan, be aware of any rate increases the insurance carrier may add.

*If you currently have a plan that doesn’t meet all of the essential health benefits required by the Affordable Act, you will not be able to keep this plan. Your insurance carrier will automatically move you to an Obamacare compliant plan or you can choose a new plan that does.

Where Can I Buy Health Insurance?

One big misconception I see a lot is people think the only place they can purchase health insurance is through their state’s Insurance Marketplace, also known as an “exchange” (or through healthcare.gov if their state does not provide an exchange).

This is only half true. Individuals and families can still purchase coverage the traditional way by using an agent or calling the insurance carrier directly. This is important because not all insurance carriers offer coverage on the Insurance Marketplaces. Therefore, using an agent will allow you to have access to more carriers, which in turn gives you more insurance coverage options. The only real reason to get coverage through the Insurance Marketplace is if you are eligible for premium assistance, as you can only get help paying the premium from the government by signing up for coverage through the Insurance Marketplace.

What Are The Penalties / Fees?

If you don’t have health coverage during 2015, you may be required to pay a penalty / fee. The fee in 2015 will be higher than in 2014. The fee for 2015 will be 2% of your income or $325 per adult/$162.50 per child, whichever is higher.

When Will My Coverage Start?

When you enroll is just as important as enrolling. Your coverage doesn’t necessarily start the following month you apply. During Open Enrollment, if you enroll:

  • Between the 1st and 15th days of the month, your coverage starts the first day of the next month. For example, if you apply for coverage on March 9th, your coverage will start on April 1st.
  • Between the 16th and the last day of the month, your coverage starts the first day of the second following month. So if you enroll on March 23, your coverage starts on May 1st.

Other Enrollment Periods¹

Special Enrollment Period

You may buy health insurance outside of Open Enrollment only if you qualify for “Special Enrollment” (SEP). To qualify for a SEP, you must have endured a “qualifying life event” such as marriage, birth or adoption of a child, or loss of other health coverage. Learn more about how you qualify for a special enrollment period.

Medicaid / CHIP

You can enroll in Medicaid or the Children’s Health Insurance Program (CHIP) any time. There is no limited enrollment period for these programs. You can apply any time. If you’re qualified, you can enroll immediately.

Small Business

If you are a small business, you can start offering coverage to your employees at any time.

¹Source: healthcare.gov

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What Small Business Owner's Need To Know About Obamacare's Employer Manadate
Most small business owner’s I speak to assume they will have to provide health insurance benefits for their employees beginning 2015. In addition, they feel the law will have a negative impact on small business. The fact is, ObamaCare should help most small businesses with tax credits and creating more options when shopping for health insurance. Below are some things small business owners need to be aware of before the “employer mandate” goes into effect.

The Magic Number

If you are a business who employs less than 50 “full-time equivalent employees”(FTE), which is generally an employee working 30 hours a week, the Affordable Care Act does not require that you provide your employees with health care coverage.

Obamacare uses the number of full-time equivalent employees to calculate whether or not a business will be subject to the employer mandate. Obamacare also has many ways of counting FTEs. One way is by adding the hours of part-time employees and equating that to a FTE employee. For example, 3 part-time employees each working 10 hours a week will be considered one FTE employee. Divide the hours of all part-time employees for the month by 120. This will give you the number of FTEs your part-time employees equal.

25 FTE or Less

If you have less than 25 FTE and provide health insurance benefits even though you are not required to, you may be eligible for a tax credit to help offset the cost of premiums. (In order to receive the credit, the employer must purchase health insurance through the state’s health insurance exchange). Also, these tax credits are retroactive back to 2010, which means businesses can still claim their health insurance tax credit from 2010 to the present.

Greater Than 50 FTE

Small businesses with 50-99 (FTE) will need to start providing insurance to employees by 2016. Businesses with a 100 or more employees will need to start providing health benefits to at least 70% of thier FTE by 2015 and 95% by 2016, or be hit with a per employee penalty.

What Do I Need To Tell My Employees about ObamaCare?

If your company is covered by the Fair Labor Standards Act, meaning you have annual sales greater than or equal to $500,000 or engage in interstate commerce, you must provide written notice to employees informing them 1)about the the Health Insurance Marketplace, and that 2)they may be able to get lower costs insurance in the Marketplace based on their income, depending on any coverage you offer. Employees also must be notified if 3)they buy insurance through the Marketplace, they may lose the employer contribution (if any) to their health benefits. Note: This notice must be provided to all employees regardless of whether they are full-time or part-time employees or whether or not they’re enrolled in your health care plan.

Do I Need To Purchase Coverage Through The “Marketplace”?

Obamacare does not mandate where small businesses purchase coverage. They are only concerned whether or not you are offing affordable health insurance. Therefore, business owners can purchase coverage from the state’s “business marketplace”, called SHOP (Small Business Health Options Program) or just as you do today by calling a broker. Using a broker is always advised as they will be able to help you determine which plan will best fit the needs of your company and your budget. Be to sure to ask if the broker is certified to sell exchange plans. If they are, they will be able to guide you through those plans as well.

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As the dust begins to settle after the Supreme Court ruling on the constitutionality of Patient Protection and Affordability Care Act. People are beginning to wonder how “Obamacare” will impact them. One of the tools that individuals have used to help control their health care costs may not be as valuable when the legislation is in enacted in 2014.

With healthcare costs continuing to increase, individuals have used Health Savings Accounts (HSA) to help manage their health care costs by paying for deductibles and other medical expenses with tax-free money set aside in an HSA, and preserving the use of health insurance for more catastrophic events. This has been an effective strategy because insurance companies offer High Deductible Health Plans (HDHPs) with low premiums for those willing to pay for routine health expenses on their own. Obamacare threatens this approach by implementing minimum coverage thresholds that insurance plans must satisfy in order to operate.

Currently, using HDHPs in conjunction with HSAs, individuals can contribute money to their HSAs to help protect themselves in the event they have to pay the high deductible. Money is contributed to an HSA and withdrawn tax-free when used to pay for qualified medical expenses. Unlike other health savings vehicles, such as an FSA, the funds in an HSA never expire year to year, so consumers can accumulate substantial funds for future medical expenses.

Under the PPACA, the “actuarial value” threshold will divide health plans into tiers to determine the coverage threshold for that plan. For example, a health insurance plan at the “gold” tier, must have an actuarial value of 80%, meaning the plan must pay for 80% of each insured’s medical expenses. The lowest tier, bronze, must have an actuarial value of 60%, or cover 60% of medical expenses. HDHPs currently cover a lower a percentage of an insured’s medical expenses and will be required to provide higher reimbursement rates with lower deductibles, which will in turn cause higher premiums. This not only jeopardizes the future of the HDHPs, but HSAs as well, because, currently, HSAs can only be used with HDHPs.

This is important to note. For many healthy Americans, using HDHPs, which allow coverage at a low premium, together with HSAs, has been a way to manage their health care costs. While the sole intention of the PPACA is to not eliminate HSAs, in theory, it does make them less valuable in the future.

Source: Advisor One

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Supreme Court Upholds ACA Ruling
Today, the Supreme Court of the United States upheld the constitutionality of the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).

PPACA’s current health insurance reform provisions will remain in force and the implementation of the law will continue. The mandate, which will require all US citizens obtain health insurance or pay a penalty, will take effect in 2014. The law will continue to be challenged by opponents, and will sure to be a hot topic during this year’s presidential election. Below are some of the law’s major implementations and when they take effect:

2012

  • Incentives for physicians to join together to form “Accountable Care Organizations”. If Accountable Care Organizations provide high quality care and reduce costs to the health care system, they can keep some of the money that they have helped save.
    Effective January 1, 2012
  • Any federal health program will be required to collect and report racial, ethnic, and language data. The Secretary of Health and Human Services will use this data to help identify and reduce health disparities. Effective March 1, 2012
  • Implementation of rules for secure, confidential, electronic exchange of health information, as well as the standardization of billing. Effective October 1, 2012
  • The introduction of a hospital “Value-Based Purchasing” program (VBP) in Original Medicare. The program offers financial incentives to hospitals to improve the quality of care. Effective October 1, 2012

2013

  • New funding will be provided to state Medicaid programs that choose to cover preventive services for patients at little or no cost. Effective January 1, 2013
  • states to pay primary care physicians no less than 100% of Medicare payment rates in 2013 and 2014 for primary care services. The increase is fully funded by the federal government. Effective January 1, 2013
  • States will receive two more years of funding to continue coverage for children not eligible for Medicaid. Effective October 1, 2013

2014

  • Health Insurance Exchanges established. Effective January 1, 2014
  • Individuals who can afford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans. If affordable coverage is not available to an individual, he or she will be eligible for an exemption.
    Effective January 1, 2014
  • Workers meeting certain requirements who cannot afford the coverage provided by their employer may take whatever funds their employer might have contributed to their insurance and use these resources to help purchase a more affordable plan in the new Affordable Insurance Exchanges.Effective January 1, 2014
  • Americans who earn less than 133% of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible to enroll in Medicaid. Effective January 1, 2014
  • Tax credits to help the middle class afford insurance will become available for those with income between 100% and 400% of the poverty line who are not eligible for other affordable coverage. (In 2010, 400% of the poverty line comes out to about $43,000 for an individual or $88,000 for a family of four). Effective January 1, 2014
  • The law prohibits new plans and existing group plans from imposing annual dollar limits on the amount of coverage an individual may receive.Effective January 1, 2014
  • The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions.
    Effective January 1, 2014
  • Small business tax credit for qualified small businesses and small non-profit organizations. In this phase, the credit is up to 50% of the employer’s contribution to provide health insurance for employees. Effective January 1, 2014

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