The Pros and Cons of the ObamaCare Replacement AKA the Pros and Cons of TrumpCare (as found in the The American Health Care Act)

We present a simple list of the pros and cons of the ObamaCare Replacement plan (as found in the The American Health Care Act) that some call TrumpCare.

The point of this list is to give you the bare bones basics from a centered perspective (thus some will see the pros as cons and cons as pros, but the list will work to inform). See our review of the American HealthCare Act for more information.

TIP: The aim of Ryan and Trump is to pass this bill through a process in which only 60 votes will be needed in the Senate. This means they can’t do a full repeal and can only go after provisions that require funding. Given this, treating the idea that it isn’t a full repeal as a pro or a con is beside the point.

The Pros of TrumpCare / ObamaCare Repeal and Replace / American Health Care Act

  • The bill gets rid of the fee for not having insurance (it doesn’t get rid of the mandate, it just gets rid of the fee).
  • The bill keeps many of ObamaCare’s provisions. It doesn’t keep all the provisions, but this round keeps essential health benefits (except for Medicaid and it repeals the defined actuarial values which could make minimal essential coverage meaningless), lifetime and annual limits, preexisting conditions exclusions, and tons of the little improvements that the ACA made. It only goes after a few provisions: Tax Credits and out-of-pocket cost assistance, the employer and individual mandate, and Medicaid expansion.
  • The bill freezes and starts to defund Medicaid; it doesn’t defund Medicaid or Medicaid Expansion. This means there would be wiggle room for both Republicans (to get re-elected) and Democrats (to push for expansion again).
  • The bill helps those making over the 400% poverty level ($47,520 for an individual and$97,200 for a family of four in 2016) by expanding HSAs and providing a tax credit based on age. This really does help that lower-upper class / middle class (depending on region and perspective) who aren’t already covered through their employer.
  • The bill eases the tax burden on industry and large employers (not small employers), if trickle down works, get out your buckets because it is going to be raining. If it doesn’t, then this is probably a con unless you invest in or work for or own specific types of healthcare companies (like device maker or drug maker).
  • The bill does some interesting things like block-grant Medicaid, allow the selling of insurance over state lines, reduce litigation in healthcare, and create a sick pool. All these can be big cons if not implemented well or if you are anti-entitlement. They could be negatives if used as a tool to starve programs for the sick and poor through defunding over time, but they could be positives if they are properly funded.
  • The bill might reduce the cost of plans by easing requirements and letting insurers sell across state lines (although that would mean more “junk insurance” and fewer consumer protections).

The Cons of TrumpCare / ObamaCare Repeal and Replace / American Health Care Act

  • The plan hurts the sick, poor, and women, is a wash for the healthy middle class and helps the upper tiers, large employers, and industry. The movement right calls this “picking winners and losers,” the left calls it “trickle down oligarchy,” the center might say “at least we didn’t get single payer or Rand’s plan.” Still, it really does shift tax breaks/credit from the bottom to the top.
  • The bill defunds Planned Parenthood (which is a con unless you are a very specific type of ideologue).
  • The bill doesn’t seek universal coverage, and the uninsured rate will increase over time.
  • The bill charges people 30% more for 12 months if they have a lapse in coverage for more than 63 days. This means that people who can’t afford coverage due to cost will have an extra cost barrier. Is this better or worse than the mandate? Probably better in some respects, especially for a selection of our 320 million, but it raises some obvious complications like “why would a young person enter the market?”
  • The bill doesn’t incentivize healthy people to enter the market. Sure, most get their coverage through work or Medicare, but many young people will likely wait to get covered.
  • The bill gets rid of the employer mandate, that is great for employers and employees who got expensive employer plans, but that isn’t great for those who relied on employer coverage. Fewer employers providing coverage means more burden on the state to provide assistance.
  • This bill changes the way minimal essential coverage is defined and applied. It repeals the definitions of plan levels (Bronze, Silver, Gold, Platinum) deregulating the insurers need to meet specific actuarial values. It also repeals the requirement for Medicaid to provide minimal essential coverage. Essentially, it’s not clear what minimal essential coverage is in this framework.
  • The bill can’t possibly reduce the deficit without deep cuts, as it shifts costs and gets rid of taxes (so it spends but decreases revenue). The CBO report isn’t done, but I don’t see how it could be fiscally conservative, pas CBO reports have suggested this sort of plan won’t decrease costs. See for example: How Repealing Portions of the Affordable Care Act Would Affect Health Insurance Coverage and Premiums. UPDATE: It is projected to reduce the deficit nominally over 10 years according to the CBO, but it does this by cutting Medicaid expansion and cost assistance which one can reasonably consider “deep cuts.”
  • The bill changes tax credits to age-based credits and gets rid of out-of-pocket assistance and freezes Medicaid Expansion. So it shifts assistance from the poorest to higher incomes (skipping the middle class in the process). This helps those over 400% of the poverty level and mostly hurts those below it. This should be weighed against the mandate. Those who don’t want coverage will save the fee from the mandate.
  • The bill ignores every idea by any liberal or conservative except Paul Ryan and his crew. It includes a lot of tweaks to the old “Better Way” plan that seem to aim at appeasing Trump and centered liberals and conservatives, but it doesn’t include any ideas that Bernie came up with or even that the Kochs would want. It favors industry and employers, but in a Ryan way and not in another way. It doesn’t even really look to Pence’s plan or Price’s plan much (for better or worse).
  • It doesn’t address many sticking points that ObamaCare had. It implements an ideological plan with some concessions. For example, those who stuck in the Medicaid gap or struggling with out-of-pocket costs will have fewer options, not more. There may be cheaper plans coming out, but affordability will still be an issue.

The Bottom Line

The bottom line is that this isn’t all good or all bad from any perspective, it fixes a few ObamaCare sticking points and creates new sticking points.

What do you think?

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Makaren on

The fact that low income citizens will be impacted by rising price or cessation of coverage is a travesty. The fact that this is based on age and not income offers tax credits for older citizens who make enough money that they really don’t need the credit and turns away from lower income citizens who actually need the help and coverage.

John Well on

smh give me some health insurance LMAO

Michele Sawyers on

The media of course will jump all over this if Trump cannot pass his health care bill, but the average American has come to realize that the news is bought and paid for, as it were. Obama Care had a great idea. …But from a financial point of view, it had the propensity to eventually crash the system. I’ve taken economic classes recently where we’ve followed this subject in detail, so although as a mother and grandmother I cringed at the list of what services were on the chopping block ( pregnancy, medicaid, mental health, etc. ), I knew that these fundamental services could, under “good management”, essentially become less of a drain on the economy. But would we have good management? Who actually runs our entire health care system today are the HMO’s, in bed with big pharm, which legally operates without any cap. This IS our problem. So if we start there, real solutions can made. on

Smart, agree 100%. This is the type of thinking we need in Congress.

Jacob on

I think the American care act should be called Republicare and not trumpcare so when it fails the American people we will all know who to blame.

Denise on

Is there ANY information as to what health services would actually be covered under Trumpcare? I cannot find anywhere an outline of specific services that an insured can depend on when going to the doctor, hospital, clinic, or having lab work, tests, therapies, chronic illness maintenance. Where is this information or does it not exist? It’s obvious most of American’s will be losers but there is no discussion about services covered so people can see what this is really about. We need specifics not rhetoric. on

Even the full bill we reviewed didn’t cover this. I will call your attention to this though… could be buried in here:

My honest guess is that we don’t know because the plan is to remove the standards and let insurers decide (they seem to want to bring costs down by deregulation).