What is TrumpCare?

TrumpCare” is a term that describes health care reform under Donald Trump. We explain TrumpCare and how it is different than ObamaCare.

Below is a list of updates on TrumpCare in its different iterations. This includes the latest Republican bill to repeal and replace ObamaCare, a breakdown and cost analysis of TrumpCare as presented on DonaldJTrump.com, and notes on past promises Trump has made.

If you just want to find out about TrumpCare and what is changing, see the Difference Between ObamaCare and TrumpCare (You can also see a summary from the Kaiser Family Foundation for a comparison).

Below we’ll start by examining the latest “TrumpCare” bill; the AHCA (the American Health Care Act), which most people call TrumpCare.

Then we’ll move on to Trump’s plan from his site. First, we explain the pros and cons of TrumpCare, then a summary of the major provisions in TrumpCare, and then offer some general TrumpCare facts.

Lastly, we’ll take a close look at TrumpCare as featured on his website and discuss a cost analysis. Along the way, we’ll be comparing all this to the current Affordable Care Act (ObamaCare) to find out what does or doesn’t change.

The means there is a lot of ground to cover, but this is why we start with the essential basics in the next section! As a more solid plan is in place, we’ll make sure to provide simple and clear informational pages.

TIP: The “TrumpCare” described below did not pass the House, so for now “the ACA (ObamaCare) is still the law of the land“. With that said, one should expect a continued effort to pass provisions like those featured below in the near future.

NOTE: The current TrumpCare plan, the AHCA, has its pros and cons (just like ObamaCare has its pros and cons). It is worth noting that, according to a recent CBO report, An estimated 52 million people would be uninsured under the Republican health care plan by 2026, compared with 28 million who would lack insurance that year under ObamaCare. On the positive side, the plan reduces the deficit by $337 billion over the decade.

IMPORTANT: TrumpCare is a word that describes any changes to ObamaCare under President Trump. Nothing is written in stone yet, and the most recent bill is still being debated and change. Thus, all provisions below are subject to change. So this is the gist of what TrumpCare currently looks like, but it is not a final “TrumpCare.” It is still unclear if the final bill will have the support to pass the House (or Senate) and it is assumed there will be a period in which Americans can offer feedback. Make sure to brush up on the basics so you can better understand what you like and don’t like about “TrumpCare.”

TrumpCare Facts 2017: The Facts on the “The American Health Care Act” (the House Bill Trump Supports)

House Republican’s have unveiled an official ObamaCare repeal and replace plan, and Trump has said he generally supports it (even if not all Republicans do).

Before we get to a full summary, let’s do a quick list of the pros and cons of TrumpCare.

The Pros and Cons of TrumpCare  (as Found in the “The American Health Care Act”)

The pros and cons of TrumpCare will give you a quick sense of what is in the bill and whether it is better or worse that ObamaCare in expanding the quality of coverage and access and easing the regulatory and financial burdens on Americans, industry, and the government.

NOTE: Keep in mind some will see the following “cons” as “pros,” and some will see the “pros” as “cons.” That is a matter of perspective; the core of what the plan is doing is the same either way. See a more robust pros and cons of TrumpCare list here.

PROS: The bill maintains the ban on preexisting conditions and keeps many other protections from the Affordable Care Act. These protections can still go away in the future, but they don’t here. The plan also freezes Medicaid expansion rather than just cutting it. The plan also addresses problems for higher-income Americans and gets rid of the fee. Lastly, the plan also expands HSA use and benefits. This plan is “centered” given past rhetoric and is in-line with the plan Trump promised (it doesn’t cover everyone, or debate drug prices, or implement any “big” promise Trump made on stage, instead we mean it lines up with his actual plan on his actual site).

The GOP has also discussed future legislation that would allow insurers to sell across state lines and aimed to reduce litigation in healthcare, but those are not in the AHCA (likely because there are limits to what can be accomplished through a budget reconciliation).

CONS: The bill freezes Medicaid Expansion by decreasing its reach rather than increasing it. It gets rid of the employer mandate for employers to provide coverage to full-time workers. It charges people 30% more for 12 months if they drop coverage (but notably doesn’t ban preexisting conditions). It changes income based assistance to age-based tax credits. It gets rid of out-of-pocket cost assistance. It lets insurers charge older Americans more and allows for “junk insurance” by getting rid of standards like actuarial values. It defunds Planned Parenthood. Women, seniors, and lower-income Americans get the short end of the stick, while industry and higher-income Americans get a better deal. The plan likely spends at least as much as ObamaCare in “net” spending (as it cuts taxes), but no CBO report has been furnished yet. The biggest negative is that it fails to address many sticking points of ObamaCare, and doesn’t seek to expand coverage. Instead, it addresses some Republican’s issues from a centered standpoint by trading entitlements for low-income people for entitlements for all.

UPDATE: It looks like essential health benefits may be cut in the final bill. We will report when we know more.

BOTTOM LINE: This is a centered bill. It isn’t a “way better” plan by any measure, but it is a workable alternative that shifts around “winners and losers.” Obviously, higher-income Americans and Businesses are the “winners,” but this is arguably consistent with Trump and the GOP’s message. We didn’t elect Bernie Sanders, so we didn’t get single payer, we didn’t elect Hillary, so we didn’t get ObamaCare 2.0, we elected Trump and Ryan, so we got their plan, which we call TrumpCare. That isn’t as much a judgment call as it is a summing up of reality.

A Summary of TrumpCare (as Found in the “The American Health Care Act”)

The bill is currently in the process of being reviewed and changed, so all provisions below are subject to change, but in general the ObamaCare Repeal and Replace plan (that some are calling TrumpCare) does the following:

  • The first thing to note is that many provisions start in 2018, 2020, and beyond (after Congress is elected 1 to 2 times and Trump gets another shot). They do a “slow rug pull.” For example, Medicaid Expansion funding is frozen in 2018 or 2020, so people don’t loose coverage until after another round of elections. There is logic in slowly easing out programs, the ACA did it too, but it still should be noted that the biggest impacts will be “delayed.”
  • Instead of Medicaid expansion, the plan block-grants traditional Medicaid. This likely results in less funding for states and less low-income Americans covered over time (millions each year). It is good that states get to keep their programs, but the lack of funding undoes anything overly positive one can say about this.
  • The plan takes away the fees for the mandates (the employer mandate to provide coverage and the individual mandate to get coverage), but not the mandates themselves. The mandate was very unpopular; no mandate fees result in less money for paying down our debt. Employer’s don’t have to offer coverage to full-timers. There is a lack of incentive for young healthy people to enter the market. This provision is a win for people who were facing the mandate but creates many complications for those who got employer coverage under the law.
  • The plan takes away most taxes on industry. You can imagine what happens when the federal government is starved of revenue. The deficit isn’t going down without other serious cuts elsewhere. For example, the tanning bed tax is repealed.
  • The plan includes a continuous coverage exclusion which allows insurers to charge you 30% more if you have a gap in coverage of more than 63 days. After you pay in for 12 months, it goes back to normal. This is arguably a fair trade for the mandate, but it will also prevent low-income Americans from accessing coverage in many cases (not sure how this fills the market with young people; but there are many worse ideas out there). Supporters of the law should give due credit where credit is due, the GOP keeping preexisting conditions protections is important. Trump promised, and this bill did it; that is recognized.
  • The plan replaces income-based tax credits and out-of-pocket cost assistance with age-based cost assistance. This works well for some groups and fixes some sticking points, but older people (under 65) with lower incomes and low-income young people with higher medical costs are going to lose significant assistance. Those with chronic conditions who depend on out-of-pocket cost sharing would be in trouble. As a plus, those stuck with high costs due to income just over the 400% poverty level under ObamaCare will feel some relief here, which is a positive factor).
  • The plan gets rid of out-of-pocket cost assistance. People don’t alway realize it, but everyone making under 250% of the poverty level is getting cost assistance on out-of-pocket costs. This goes away. This paired with the age-based tax credits and freezing of Medicaid expansion and continuous coverage provision has obvious impacts on all low-income Americans.
  • The plan expands HSAs. HSAs are useful, but many consumers don’t like them as they require one to stash away thousands each year upfront to reap benefits. The idea is to encourage you to put money into a savings account with tax advantages. Then you can use the funds for a broad range of healthcare costs. This is really smart, and we have them now, but people from all walks of life tend to yell at me a lot when I suggest using them (see our comments section, see an example). The new limits essentially replace cost sharing subsidies, but people with no extra cash are going to be upset I suspect. That being said HSA changes suggested by this leaked draft would help a lot of people without significant tax revenue loss. Those changes include: making the HSA contribution limit equal to the HDHPs maximum out-of-pocket limit, allowing people to purchase OTCs, reducing the tax penalty for use the funds for non-approved medical spending, allowing older couples to make catch-up contributions together, and a 60 day window after purchasing an HDHP for an HSA to be establish with tax benefits backdated from the start of coverage. It’s a bit surprising that GOP plan doesn’t drop the requirement to have a HDHP altogether and allow everyone an opportunity to get the tax benefits of these savings accounts.
  • It would increase the taxes paid by middle-class workers on their wages by making the value of employer insurance taxable income. At the same time, it would cut taxes on employer benefit packages valued over $500,000, the tax on incomes over $200,000-$250,000, the tax on insurers’ profits, and the tax on brand-named pharmaceutical companies.
  • And way more including strange things like defunding parts of the brand new 21st Century Cures Act that the GOP just passed. They defund sections of a highly touted ‘bipartisan’ Act that just passed. There are other things like that. Also, abortion coverage and such is stripped away in very specific ways. That is, of course, a tricky one which could have a dramatic effect the way insurers in every sector offering this coverage (or not). There are many negatives. We need very smart policy-minded people on yesterday.
  • The plan also expands the ratios of what people can be charged, so older Americans can get charged more (this oddly creates barriers for older American not yet at the Medicare age).
  • The plan also notably doesn’t touch essential health benefits or lifetime or annual limits. We can’t cover everything here, but we did want to note that these are all good things!
  • … and they try to defund Planned Parenthood altogether. In a super shady move where they don’t name PP directly but instead add the following catch: “For a state to receive funding for Medicaid (or a waiver) for payments to any non-profits (or anyone associated with them) who provide abortions (except under the Hyde Amendment) whose funding from Medicaid as a nationwide health care network exceeded $350,000,000 in the fiscal year 2014”. No matter what your politics, it seems unfair to shove a Planned Parenthood repeal in a repair plan.

BOTTOMLINE: This plan hurts low-income Americans and women (it charges them more and takes away coverage and assistance options in general), but this plan helps industry, those making over 400% of the poverty level, large employers, and those ideologically opposed to ObamaCare. The plan both costs money and lowers the total insured in America (undoing some of the ACA’s good work). However, the changes also fix some things. It is a mixed bag, or as some on the Freedom right say, “it just picks different winners and losers.” It could have gone further to garner the favor of either progressives or free-enterprise movement conservatives, but instead it took a centered approach.  It acknowledges that we can’t all get that we want all the time. It lays a decent foundation that touches on most of his points as found on DonaldJTrump.com.

TIP: Learn more about “The American Health Care Act,” the ObamaCare Repeal and Replace plan. It doesn’t include everything Trump promised, but it does touch on most of his points as found on DonaldJTrump.com.

Past Updates on TrumpCare

TrumpCare is a nickname given to whatever healthcare plan passes under Donald Trump, that means explaining TumpCare means explaining everything that changes with ObamaCare under President Trump. With that in mind, here are is a recanting of past updates. In the next section, we will examine Trump’s plan as found on his site.

UPDATE: Trump and Republicans in Congress had stated that they would seek to repeal ObamaCare within Trump’s first hundred days in office. True to their word the process of repeal has begun. Trump has signed an executive order on ObamaCare. “The American Health Care Act” is on the table. After a meeting with President Obama, President-elect Trump suggested he would either amend ObamaCare or repeal and replace it, not just repeal it, and would keep key provisions like guaranteed coverage for preexisting conditions and allowing kids to stay on their plans until 26. More recently, Trump promised “simultaneous repeal and replace,” “insurance for everybody,” and he doubled down on his longstanding promise of “negotiating with drug companies.” Unfortunately, after a meeting with drug companies, Trump backed away from allowing negotiations.

UPDATE: With Tom Price selected to be health secretary, and him favoring the GOP solution for preexisting conditions, it is likely we will get a “Continuous Coverage Exclusion” for pre-existing conditions.” It’s not the same as the ACA version. For example, it has very long exclusion periods, so make sure you understand the implications! See our review of the GOP ObamaCare alternative plan and our review of the Burr, Hatch, and Upton plan for an idea of what Republicans have suggested for ACA replacements in the past. It is very likely TrumpCare will draw elements from past GOP plans, as ultimately it is Congress who makes the laws.

TIP: The GOP forever altered the lexicon when they called the Patient Protection and Affordable Care Act “ObamaCare.” With this in mind, Trump’s healthcare plan has been unofficially dubbed “TrumpCare.” This is true even though no formal plan is on the table yet.

TIP: You can see Trump’s healthcare reform to make America great again here. See Vox’s TrumpCare article for a different take. We discuss all things TrumpCare below, including a line-by-line review of his original plan and all the updates since the election. There is a lot of ground to cover, so read carefully.

An Overview of TrumpCare (“TrumpCare” as found on DonaldJTrump.com)

Above we covered what is happening, below is what Trump promised on his website. The two are aligned, but none of the big promises he made like “healthcare for everybody” have been kept. We only got “a way better plan.” Perhaps it was meant as wordplay to insinuate supporting Ryan’s Better Way plan word-for-word with a few tweaks.

The bottom line here is we got a more centered plan. We got the one on his site, not the one we heard about rhetorically. Given this, the information below is still useful for understanding TrumpCare in its current iteration.

On his website, the TrumpCare plan listed is part a rehash of the Republican playbook, “insurance across state lines, HSAs, get the sick out of the healthcare system to keep costs down,” and part, an “oddly socially liberal market-based healthcare reform and cracking down on big pharma.”

The new “The American Health Care Act” is pretty much what Trump promised (minus a few “oddly socially liberal” reforms and cracking down on big pharma).

Despite some of the expected Republican views being included in his written plan, some parts of the plan and the words that Trump says paint a very different picture.

Below we’ll look at what Trump’s written position and past statements could mean for the future of healthcare reform, and how TrumpCare is different (or not ) from ObamaCare. Make sure to see our review of “The American Health Care Act” for an idea of how it is the same and different than TrumpCare as written on DonaldJTrump.com.

First, let us get a glimpse a Trump speaking his mind so we can set the stage.

“The Government’s Gonna Pay For It” – Wildcard Donald Trump on Single-ish Payer.

TIP: See how past healthcare proposals from the GOP differ and relate to each other. Past healthcare reform proposals compared.

The Cost of TrumpCare

The Committee for a Responsible Federal Budget did a review of Trump’s healthcare plan. The following article shows a breakdown of costs: MEASURING TRUMP’S HEALTHCARE PLAN. The result is a cost of roughly $550 billion over ten years under conventional scoring and about $330 billion with dynamic scoring (see breakdown below).

trump-health-analysis

Note that this analysis does not include Mr. Trump’s call to negotiate aggressively for Medicare drugs, a policy that is not listed on his website. He has previously claimed that $300 billion a year could be saved through negotiation, a claim we rated as false because Medicare will only spend an average of $111 billion each year on prescription drugs. Based on previous estimates by CBO, actual savings would likely be small or negligible.

NOTE: The plan assumes a full repeal of ObamaCare before replacing it. While this is possible given Trump’s statements, it isn’t necessarily what we would get from the future President Trump.

NOTE: Like him or hate him, Trump has mentioned some critical health policies like expanding Medicaid and debating drug costs for Medicare. These didn’t make it into the Trump plan as written, but it would be a mistake to overlook the benefits of strategies like debating drug prices for Medicare.

10-Year Estimates of “Healthcare Reform to Make America Great Again”
Policy Costs (+) / Savings (-)
Repealing Obamacare Coverage Provisions  -$1,120 billion
Repeal Obamacare Tax Increases  $660 billion
Repeal Obamacare Medicare Savings  $940 billion
Dynamic Effects from Growth (excluded from conventional scores)
 -$220 billion
Subtotal, Repeal Obamacare $260 billion
Allow insurance to be purchased across state lines -$10 billion
Create deduction for individual insurance premiums $100 billion
Allow importation of prescription drugs -$20 billion
Require price transparency and promote health savings accounts (HSAs) *
Subtotal, Replace Obamacare $70 billion
Total under Dynamic Scoring (including growth from repealing Obamacare)
$330 billion
Subtract Dynamic Effects from Growth (excluded from conventional scores)
-$220 billion
Total under Conventional Scoring
$550 billion

* Less than $10 billion of net costs or savings.
Source: CRFB calculations based entirely on various CBO estimates for the independent pieces. All estimates are very rough and rounded to the nearest $10 billion. Interactions or interest costs not included.

TrumpCare As Written on DonaldTrump.com

Below is an annotated version of TrumpCare. I explain what each measure means for America and the current ObamaCare system.

1) Completely repeal Obamacare. Our elected representatives must eliminate the individual mandate. No person should be required to buy insurance unless he or she wants to.

COMMENT: No Republican is likely to repeal ObamaCare in full. Saying “repeal ObamaCare” is a way of saying, “get rid of key provisions like the mandates, subsidies, coverage for preexisting conditions, insurance on parents’ plans for those under 26, and specifically, regulations on key businesses favored by the GOP.” This doesn’t mean Trump plans to do all of this. It means he could. Past GOP replacement or repeal plans have gone after the aforementioned provisions before. Trump  says we must eliminate the individual mandate to obtain and maintain coverage, so that part seems likely. From there, we can speculate that this could, by extension, mean getting rid of subsidies and a few other key regulations, such as bans on annual and lifetime limits or rules against discrimination based on gender or health status. Of course, Trump hasn’t explicitly stated what he plans to do, so nothing is certain. The thing I want to stress here is that “repeal the mandate” almost certainly means eliminating the clause requiring insurance companies to cover people with preexisting conditions. Although President Trump has suggested he will keep preexisting conditions protections, it will take some real skill to get rid of the mandate but not the protections. The mandate and open enrollment together protect insurers from people waiting until they are sick to sign up. Thus, the two together keep costs down. As in pre-ACA times, we could see that only a health issue that occurs while a person is covered by an insurance policy would be covered, or we may see that people can only keep their plans if they elected to maintain their coverage. We want to avoid reading too much into a single website statement or offhanded comment made before or since the election. Instead, we want to make clear that repealing the mandate could, by extension, mean repealing key provisions which many Americans rely on to ensure access to affordable coverage. See why Republicans can’t just repeal ObamaCare.

2) Modify existing law that inhibits the sale of health insurance across state lines. As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs are expected to go down, and consumer satisfaction is expected to go up.

COMMENT: Republicans have always wanted to sell insurance across state lines. The conversation as to why or why not is nuanced. It’s not a bad idea and would make his constituents happy. See The Problem With G.O.P. Plans to Sell Health Insurance Across State Lines.

3) Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions? As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want health care coverage can have it.

COMMENT: Deducting health insurance premiums makes a lot of sense. People are getting taken to the cleaners with rate increases. Trump says he will expand Medicaid here too, or eluded to a variation of this. That is potentially a big deal, and very opposite of what the Cruz’s and Rubio’s of the world want (which means Trump could face opposition on this from his own party). See why Medicaid expansion is so important.

4) Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate. These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty. The flexibility and security provided by HSAs will be of great benefit to all who participate.

COMMENT: The Republican view part two. Expanding HSAs sounds great, but the actual policy is typically code for, “benefit upper-middle class who can afford to fund HSAs.” The GOP would like to give people a free 1,000 to fund an HSA, but as much as I love HSAs, you can’t fund $3,000 to $6,000 for the tax benefits if you don’t have the income to do it. Learn more about HSAs.

5) Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.

COMMENT: If Trump didn’t just suggest expanding Medicaid-like programs, I would be shocked to realize that Trump just called for war on the price setters of the healthcare industry. I’m pretty sure he is implying he will let Medicare negotiate drug prices. See why Drug costs are crippling the American taxpayer.

6) Block-grant Medicaid to the states. Nearly every state already offers benefits beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better than the federal government. States will have the incentives to seek out and eliminate fraud, waste, and abuse to preserve precious resources.

COMMENT: The Republican view part three. It’s not a bad move, but block-grants sound better on paper. See why block grants are worse than they look on paper.

7) Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.

COMMENT: Trump just suggested measures that would result in big Pharma losing a great deal of money; once you pay non-US prices you’ll never go back. See why the US pays more than other countries for drugs.

TrumpCare as Spoken By Donald Trump

Trump’s health policy is largely unknown; that much is clear. All we can do is listen to what he is saying and judge it for what it is.

Single Payer – Trump Style

Trump has essentially insinuated that he plans to implement a market-driven version of single payer insurance. He made this very clear in a debate where his dialogue with Cruz focused on the Medicaid side:

CRUZ: So does the government pay for everyone’s health care?

TRUMP: … I’m not fine with it. We are going to take those people…

CRUZ: Yes or no. Just answer the question.

TRUMP: Excuse me. We are going to take those people, and those people are going to be serviced by doctors and hospitals. We’re going to make great deals on it, but we’re not going to let them die in the streets.

CRUZ: Who pays for it?

COMMENT: Go to about 8 minutes into the video blow and see Trump win a debate against Republicans by pushing moral healthcare policies.

Learn more about Donald Trump on HealthCare from ontheissues.org.

How is TrumpCare Different From ObamaCare?

TrumpCare, as written on Trump’s site, is like Republican health care reform meets BernieCare. TrumpCare, as it is unfolding, is still anyone’s guess.

On the site, the plan has little in common with ObamaCare outside of Medicaid expansion. So far in real life, it is looking like the GOP will push to block grant Medicaid, which could have a number of implications. Block-grant could mean expansion, or it could mean provide loopholes to decrease federal funding (the fear of liberals). Like on many of these issues, it really is still too early to tell.

On the site, Trump sounds as though he wants a complete repeal of the ACA, but language since the election hints that this won’t be the case. It makes little sense to try to get rid of every part of the Affordable Care Act, especially the parts about that aren’t drawing criticism.

Trump seems to be dropping the mandates and some subsidies, pushing Medicaid expansion rhetorically, pushing Medicaid block-grant in practice, deregulating a little, regulating a little, and maybe initiating some version of a free-market single payer/public option like we saw in Upton, Burr, and Hatch’s CARE plan or Pence’s HIP.

Trump’s stance on healthcare, as far as we know, contains a lot of room for bipartisan reform. It is still too early to know what a Trump will do as a President under the GOP controlled congress, but if it is a moderate version of what he has said, Americans should be just fine.

In many ways, the real issue all comes back to Trump’s pronouncements that, “we aren’t going to let them die on the street” and “the goal is insurance for everybody.”  Were those empty promises, or real ones?

Politicians almost always put out a rough outline, the PPACA is 1,000 pages of legislation, so we can’t make a completely fair comparison just yet. Stay tuned.

UPDATE POST TRUMP ELECTION: Now that Trump has been elected, we will discuss what policies he attempts to implement. We will keep this page updated has Trump begins to shape his repeal or replace plan. For now, the ACA is still the law of the land. Everything from ObamaCare’s cost assistance to ObamaCare’s fee applies despite the recent order and suggested replacement plans.