The Essential Basics of the House Plan to Repeal and Replace ObamaCare (AKA TrumpCare)
We explain everything you need to know about the latest House ObamaCare repeal and replace plan (TrumpCare).
The House voted Thursday, May 4th, 2017 on their ObamaCare repeal the American Health Care Act amended by the MacArthur Amendment.
The bill passed 217-to-213. The bill will now go to the Senate for review and another vote.
TIP: See a simple summary of the American Health Care Act for the basics or keep reading to learn more.
Below we cover the essentials of what you need to know.
- The GOP has long promised an ObamaCare replacement (if you need a refresher on what ObamaCare does, see here).
- The replacement plan they have been pushing is, on paper, a three phase version of their Better Way Plan.
- The first phase is the American Health Care Act.
- This phase is being passed through “budget reconciliation” which means it needs less votes to pass than a bill not passed thorough reconciliation (it also limits what it can do; see the Byrd Rule).
- The first attempt to pass the American Health Care Act failed in the House.
- After that attempt, the MacArthur Amendment was added.
- Thursday, May 4th, 2017 the House passed the amended bill 217-to-213.
See live coverage: House GOP races toward ObamaCare repeal vote. We will post the results when they are known.
UPDATE: The Bill passed the House 217-to-213, it will now go to the Senate for review and another vote.
How This all Relates to TrumpCare and What the Republican ObamaCare Plan Means for America
TrumpCare describes this bill if it passes and all other healthcare reform under Trump. This includes:
- The latest Republican bill to repeal and replace ObamaCare, the American HealthCare Act (and the related MacAurther Amendment with “invisible high-risk pools”), TIP: This is what they are trying to pass.
- The January Executive order that takes some wind out of the mandate’s sails,
- The April 2017 Regulations that allow for narrow networks and shorten open enrollment,
- Tom Price’s plans as shown on HHS,
- The TrumpCare as presented on DonaldJTrump.com. We break it down and do a cost analysis of it.
- Past promises Trump has made (like “insurance for everybody“).
The original American HealthCare Act (what they are trying to pass in the vote noted above):
- Repeals the mandates for both individuals to pay a fee for not having coverage and for large employers to insure their employees.
- Freezes Medicaid funding to states beginning in 2018 (this freezes federal funding so states can’t continue to expand Medicaid without raising state taxes).
- Eliminates most of ObamaCare’s taxes on those with higher incomes, employers, and industry (i.e. the bill is most tax breaks for the top fraction of a percent).
- Replaces tax credits and out-of-pocket assistance based on income with tax credits based on age and no out-of-pocket assistance. Income-based assistance like Medicaid remains. Notably, tax credits are offered to those making 400% – 600% of the poverty level. This is unlike ObamaCare and may have a positive impact on people.
- Charges a 30% Fee for 12 months for entering or reentering the market for those who don’t obtain coverage during open enrollment and then maintain coverage.
- However, it doesn’t do the litigation reform, allow sales across state lines, or make the transparency reform promised on Trump’s site. To be fair this is, even if only unofficially, supposed to be phase 1 of 3.
NOTE: The plan also does a few odd things that likely won’t pass the Senate, these include provisions that make it so Planned Parenthood can’t be reimbursed for Medicaid. This provision is hidden beneath complex language like many other provisions in the bill.
Meanwhile, the MacArthur Amendment, the other part of what they are trying to pass as noted above, allows states to undo key ObamaCare protections at a state level.
This will, in many cases, result in Republican-led states being able to charge the sick and elderly more while giving younger and healthier people a break, in the name of “encouraging fair health insurance premiums.”
To offset the fact that the sick can be pushed out of the market on a state level, and to attract insurers to states to increase competition, it also creates a risk adjustment program (like ObamaCare had).
It does all of this via three waivers:
- A waiver for community health ratings so the sick and elderly can be charged more,
- A waiver for essential health benefits so states can exclude certain conditions for annual, lifetime, and other cost sharing limits, and
- A waiver that allows for risk adjustment measures including an “invisible risk pool” which we explain below.
NOTE: The Amendment originally exempted Congress from the changes and allowed them to keep ObamaCare. However, this was changed (after drawing ire).
The Costs of TrumpCare 1.0
The plan (before the Amendment) had a price tag that came in under the ACA according to the Congressional Budget Office, saving $337 billion over the decade (according to their first report). However, it did this by leaving 52 million without coverage by 2026. It increases the uninsured by 24 million by 2026 for a total of 52 million.
Is This Like TrumpCare Promised on Trump’s Website?
Obviously that is “get rid of the mandates” as it says on Trump’s site, but that isn’t “insurance for everybody” and that isn’t “not letting them die in the streets.”
However, this is only supposed to be phase 1 of 3. No one knows what is coming next.
We will have more information once we find out if this version of TrumpCare 1.0 passes the house.