TrumpCare vs. ObamaCare
What is Different About the American Health Care Act / Better Care Reconciliation Act (TrumpCare) and the Affordable Care Act (ObamaCare)?
We explain the difference between ObamaCare and TrumpCare to show how TrumpCare (the American Health Care Act / Better Care Reconciliation Act of 2017) and ObamaCare (the Affordable Care Act) are different.
The goal of this page is to compare TrumpCare in its current from to ObamaCare in the form it was before Trump took office.
With that said, this comparison of “ObamaCare vs. TrumpCare” is notably complicated by the many changes that have been made between Trump’s plan on his site, the House bill, and the Senate bill’s many revisions.
With that in mind, this page is updated to reflect all changes up to the July 13th, 2017 changes to the Better Care Reconciliation Act of 2017 (the Senate’s “TrumpCare” bill). That means that while it doesn’t include the latest Graham-Cassidy proposal, however regarding this the reader should note that… that proposal is very similar to the BCRA save a few changes which one can learn about here.
An Introduction to ObamaCare and TrumpCare
TrumpCare is a nickname for the proposed replacement for ObamaCare AKA the Affordable Care Act (ACA) and general changes to healthcare under Trump.
The repeal and replace plan itself has gone through many iterations. It started as Ryan’s “the Better Way” plan, evolved into the House bill to repeal and replace ObamaCare, the American HealthCare Act (AHCA), then after passing the House with changes became The Senate’s Better Care Reconciliation Act of 2017 and its revisions (the Senate version of the repeal and replace plan which replaces the House bill).
In other words, “TrumpCare” is a term that describes health care reform under Donald Trump. Thus, below we compare healthcare under Donald Trump to HealthCare under Barack Obama generally, and compare the legislation of the Affordable Care Act to the current state of the Better Care and Reconciliation Act specifically.
Although we don’t know if the plan will pass the Senate, or what other changes might be made, we explain everything we know so far below, including how TrumpCare is different than ObamaCare.
We’ll update this page as we know more.
TIP: Due to the constant changes, this page has had to be updated as legislation was revised. The table below works as an overview of TrumpCare in its current state vs. the House Bill in the state it was when it passed the house vs. the Affordable Care Act in its state before Trump took office. See our Better Care Reconciliation Act of 2017 Facts page for the recent updates to the Senate repeal and replace bill.
|The Difference||The Basics of TrumpCare; The Senate Version (The Better Care Reconciliation Act of 2017 or BCRA)||The Basics of TrumpCare; the House Version (The American HealthCare Act or AHCA)||The Basics of ObamaCare; the Current Law (the Affordable Care Act or ACA)|
|Employer Mandate||Large Businesses don’t have to provide insurance to full-time workers or pay a fee (retroactive starting in 2016).||Large Businesses don’t have to provide insurance to full-time workers or pay a fee.||Large Businesses have to provide insurance to full-time workers.|
|Individual Mandate||There is no individual mandate (the requirement to get coverage or pay a fee). Instead, there is a 6 month waiting period to reenter the market if you have a gap in coverage for more than 63 days in the previous year (meaning if you apply for coverage during open enrollment or during a special enrollment you have to wait 6 months from the date of application to enroll in coverage).||There is no individual mandate (the requirement to get coverage or pay a fee). Instead, there is a 30% charge for 12 months if you have a gap in coverage for more than 63 days and reenter the market.||There is a fee if you don’t maintain coverage or an exemption each month (for those who can afford it).|
|Pre-Existing Conditions||Preexisting Conditions are covered, but state-based waivers can be used to exclude certain conditions from lifetime and annual limits (but people of the same age on the same plan can’t pay higher premiums or cost sharing).||Preexisting Conditions are covered, but state-based waivers can be used to exclude certain conditions from lifetime and annual limits and can be used to charge sick people more (although the state must establish a high-risk pool).||No one with pre-existing conditions can be denied coverage or charged higher insurance rates.|
|Essential Health Benefits||States can waive essential health benefits and therefore reinstate annual and lifetime limits. The state-based waivers could result in women and sick people, who rely on essential health benefits and their annual and lifetime limits, paying more (or even being excluded from the market due to cost).||States can waive essential health benefits and therefore reinstate annual and lifetime limits. The state-based waivers could result in women and sick people, who rely on essential health benefits and their annual and lifetime limits, paying more (or even being excluded from the market due to cost).||Essential health benefits are covered on all plans with no annual or lifetime limits.|
|Cost Assistance||Tax credits are based on income and age for those making up to 350% of the Poverty Level (the credits start at 0% and stop at 350% creating a cliff; but expanding credits to 0% – 100% to offset Medicaid cuts). Out-of-pocket assistance is extended on a per-month basis until 2019.||Tax credits are based on age for those making up to 600% of the Poverty Level (the credit then phases out slow); out-of-pocket assistance is cut.||Those making between 100% – 400% of the poverty have access to premium tax credits based on income; out-of-pocket assistance is offered for 100%-250% FPL.|
|Medicaid funding||Obamacare’s Medicaid expansion is phased out over four years, funding is cut, and extra dollars are given to states who spend less on Medicaid (and taken from states who spend more). 90% of the current federal funding would be provided in 2020, and it would decrease by 5% each year until 2023, after which it would be eliminated. People would not be allowed to join the expansion from 2020 onwards. Also, there is a per capita cap for federal Medicaid spending. After 2025 growth in spending would shift from the consumer price index for medical care to the CPI for all goods, a lower level of growth. That means Medicaid expansion is frozen, states who expand on their own are punished, states will get less funding for Medicaid in general, and federal funding will continue to decline after 2025.||Medicaid expansion funding is frozen; block-grants might be added to a later bill.||Medicaid is expanded to all adults in all states that expand and the Federal Government pays 90% of the costs.|
|Taxes||TrumpCare cuts most taxes on industry.
||TrumpCare cuts most taxes on industry. This includes the 3.8% tax on high earners.||ObamaCare taxes those who profit the most off of healthcare.|
|Ratios||Older Americans can be charged 5x more than young people under TrumpCare. Premium costs for the same plan for the same age customer cannot differ (community ratings).||Older Americans can be charged 5x more than young people under TrumpCare. Premium costs for the same plan for the same age customer can differ (no community ratings).||Under ObamaCare you can’t be charged more for having a preexisting condition. Older Americans can be charged 3x more than young people. Premium costs for the same plan for the same age customer cannot differ (community ratings).|
|High-Risk Pools||TrumpCare allows for high-risk pools to create a state-funded (tax payer funded) reinsurance program (via state level waivers).||TrumpCare allows for high-risk pools to create a state-funded (tax payer funded) reinsurance program (via state level waivers).||The Affordable Care Act expanded coverage and got rid of high-risk pools.|
|Cost and Coverage||The plan according to the Congressional Budget Office, saving $321 billion over the decade. However, it did this by leaving 49 million without coverage by 2026 (it increases the uninsured by 22 million by 2026 for a total of 49 million uninsured). The cost and uninsured rate are subject to change based on changes to the bill. This bill notably saves more and covers more than the House bill.||The plan (after amendments) had a price tag that came in under the ACA according to the Congressional Budget Office, saving $119 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 23 million by 2026 for a total of 51 million uninsured). The cost and uninsured rate are subject to change based on changes to the bill.||The Affordable Care Act, therefore, costs $321 billion more and insures 22 million more people by 2026 than the Senate Bill.|
|Bottomline||The Senate’s TrumpCare might bring premium costs down for some, but less assistance and less on healthcare means hospitals and the sick, poor, and elderly will see new hurdles while the most wealthy (business, large employers, high earners) will see tax breaks.||The House’s TrumpCare might bring premium costs down for some, but less assistance and less on healthcare means hospitals and the sick, poor, and elderly will see new hurdles while the most wealthy (business, large employers, high earners) will see tax breaks.||The Affordable Care Act reduced the uninsured and bankruptcy and helped keep hospitals full, but people were struggling with costs. For those with assistance, however, the ACA meant tens of millions had access to affordable coverage for the first time. Currently, uninsured rates are at an all-time low.|
IMPORTANT: It is vital to note that this plan hasn’t passed the Senate and is subject to changes. Also this is a budget reconciliation bill (as it can pass with only 51 votes as a budget bill), and it is unofficially phase 1 of 3 phases (meaning the other 2 phases are still part of the overarching Republican plan for healthcare; in theory at least). That means items Trump promised on his website that aren’t related to the budget like selling across state lines, transparency reform, and litigation reform aren’t in the BCRA. Thus, one should keep in mind that although it doesn’t undo many key ACA provisions, and although it doesn’t do everything Trump promised, it doesn’t mean Republicans don’t have those agenda items in mind for phase 2 and 3. With that said, phase 1 (the TrumpCare below) focuses on budget items (so there are certain cuts and certain provisions that wouldn’t make sense in this bill). If you want to know everything planned, consider checking out our original review of Ryan’s “Better Way” plan.
TIP: See a summary from the Kaiser Family Foundation for a comparison. See also, the Pros and Cons of TrumpCare or “a simple summary of the AHCA with its new amendments” (the version that the senate got).
TrumpCare Vs. ObamaCare: A Summary of What is Different Between ObamaCare and TrumpCare
TrumpCare in its current proposed state (remember nothing has passed yet and they keep changing the provisions of the repeal and replace plan) keeps a lot of the Affordable Care Act (ACA) in place, but it changes a lot too.
Keeping in mind that the bill is still being debated and everything below is subject to change, the basics of what TrumpCare does can be summarized by saying TrumpCare (as it stands now):
- Repeals the fee for the mandates (it doesn’t repeal the mandates) for both individuals to pay a fee for not having coverage and for large employers to insure their employees.
- Freezes Medicaid expansion funding and reduces Medicaid funding in general. The bill freezes federal funding so states can’t continue to expand Medicaid without raising state taxes; it doesn’t repeal Medicaid Expansion, just freezes funding. Likewise, the bill reduces Medicaid spending over time, but doesn’t repeal Medicaid. The specifics of what happens is complex and dates are subject to change (you can read about details here), but generally funding is phased down over time.
- Eliminates most of ObamaCare’s taxes on those with higher incomes, employers, and industry (the result being a major tax break for the top fraction of a percent). With that said, the July 13th revisions in the senate bill retained the 3.8% investments tax and a 0.9% payroll tax increases under the Affordable Care Act.
- Replaces tax credits based on income with tax credits based on income and age (other income-based assistance like Medicaid remains). Notably, tax credits are offered to those making 0% – 350% of the poverty level (the ACA notably didn’t offer credits to 0% – 100% because it intended that group to have expanded Medicaid; this plan cuts Medicaid but offers tax credits to lower incomes). This is notably different than the House bill which offered credits based on age only from 0% – 600% FPL and then phased out.
- Those who reenter the market after having a gap in coverage of 63 days or more have to wait 6 months after they re-enroll via open enrollment or special enrollment. TIP: This continued coverage provision has been re-worked with just about every iteration, so keep an eye on it.
- The plan includes waivers that allow insurers to sell “junk plans” (low premium, high deductible, low benefit plans).
- … however it doesn’t do the litigation reform, sell across state lines, or 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: One thing to note early on here is that the plan originally cut small business tax credits (although they were added back in by the Senate, it is still worth noting) and the plan currently cuts assistance for seniors who are not on Medicare (and raises the ratio older Americans can be charged). Neither of these is in-line with past rhetoric from Trump or the GOP.
The Cost of TrumpCare According to the CBO, The Uninsured Rate Under TrumpCare, and the Controversial Planks of TrumpCare
TrumpCare also does some very controversial things in its current iteration, some of which go against Trump’s campaign promises of “more coverage,” “covering everybody,” and “not letting them die on the streets” (as that quote was referring to Medicaid and certainly tens of millions are going to lose access to Medicaid over time).
Instead of “covering everybody,” TrumpCare defunds Planned Parenthood, takes away demand from healthcare providers (by creating tens of millions of uninsured), takes away funding states could have used for state-based healthcare solutions, and takes large amounts of cost assistance away from Seniors who haven’t reached Medicare age.
However, on the plus side, it leaves some very important provisions of the ACA in place (as we’ll note below) and fixes a few things like the fee associated with the mandate and cost assistance for those making less than 100% of the poverty level.
This means some could see premiums reduced (which would fulfill one campaign promise), but others would see costs increase and access diminished (thus going against another campaign promise).
With all that said, personal costs and coverage implications aside, in terms of national costs and coverage:
The CBO’s July 20, 2017 report: CBO and JCT estimate that enacting the Better Care Reconciliation Act of 2017 would reduce federal deficits by $420 billion over the coming decade and increase the number of people who are uninsured by 22 million in 2026 relative to current law (for a total of 49 million uninsured; about what it was before the ACA’s coverage provisions took effect).
We will discuss pros and cons, but these are the basics.
TrumpCare Vs. ObamaCare: The Major Provisions TrumpCare Changes
To illustrate what else TrumpCare does and doesn’t keep we have used a list of the key basic provisions of the Affordable Care Act and then have crossed out what TrumpCare changes (see the original list for the ACA here):
TIP: It is important to note that the current bill is designed to address budget items only (it is being done as a budget reconciliation bill so it can pass with 51 votes), and some of the following are not budget-related. Some of these provisions could still be repealed down the road in planned Second and Third repeal phases.
ObamaCare’s benefits, rights, and protections include:
TIP: The Senate bill in its current from makes the changes to the ACA noted below. In other words, the list below is what the Affordable Care Act did, meanwhile all NOTES and anything
crossed out helps to illustrate what is changing (in other words the list below is the major provisions of ObamaCare with notes showing what TrumpCare changes).
- Letting young adults stay on their parents’ plan until 26.
- Stopping insurance companies from denying you coverage or charging you more based on health status. NOTE: Waivers can be used to effectively exclude people with certain conditions from some plans (a sort of indirect way to charge more based on health status).
- Stopping insurance companies from dropping you when you are sick or if you make an honest mistake on your application.
- Preventing gender discrimination. NOTE: TrumpCare doesn’t remove all gender discrimination bans or bring back a ratio for women, but it does change a lot for women.
- Stopping insurance companies from imposing unjustified rate hikes. NOTE: One of the main provisions that did this, the 80/20 provision has lapsed and that isn’t helping the markets to stabilize. TrumpCare doesn’t fix this, no one has yet.
Doing away with lifetime and annual dollar limits. NOTE: Waivers can be used to exclude limits for certain conditions (as waivers can waive the ACA’s essential health benefits).
- Giving you the right to a rapid appeal of insurance company decisions.
Expanding coverage to tens of millions by subsidizing health insurance costs through the Health Insurance Marketplaces(HealthCare.Gov and the state-run Marketplaces) NOTE: Open enrollment and healthcare.gov will continue, but some details have changed, including those related to cost assistance (specifically cost assistance is paired back and offered to 0% – 350% with reduced Medicaid expansion, as opposed to the ACA’s 100% – 400% paired with Medicaid expansion). Expanding Medicaid to millions in states that chose to expand the programNOTE: Medicaid expansion is frozen, so it will no longer be “expanded,” and Medicaid in general will also have its funding reduced (with the July 13th changes even allowing for block granting for newly eligible Medicaid recipients). Providing tax breaks to small businesses for offering health insurance to their employees. Requiring large businesses to insure employees.NOTE: The mandate to offer coverage to full-time workers is gone.
- Requiring all insurers to cover people with pre-existing conditions. NOTE: Again, as noted above, people can be priced out due to waivers or find no plans in their region that cover pre-existings because of the waivers… but they can’t be denied directly.
- Making CHIP easier for kids to get. NOTE: Questionable considering Medicaid is being defunded.
- Improving Medicare for seniors. NOTE: Questionable considering the impact all this has on the Medicare market (certainly seniors being charged 5:1 is very bad for some non-Medicare age seniors, but as for Medicare itself, there is no direct action on it in the BCRA).
- Ensuring all plans
cover minimum benefits and ten essential benefits including free preventive care, OB-GYN services with no referrals, free birth control, and coverage for emergency room visits out-of-network. NOTE: The requirement to cover OB-GYN, birth control services, and other essential benefits on all plans are some of the benefits, rights, and protections that all Americans lose, but that women lose specifically.
UPDATE ON ESSENTIAL HEALTH BENEFITS: After discussions between Republicans it looks like Essential Health Benefits will be subject to state-based waivers (along with a few other things). This means they can be cut on a state level. This could mean cheaper plans for some (as insurers would be able to offer fewer benefits), but could also mean that people won’t know what they are getting when they buy coverage. They could end up, for example, picking a cheap plan and then realizing it doesn’t cover any of the services they need.
UPDATE ON MEDICAID AND OTHER CHANGES: Changes were made to the bill in the House as the Tuesday Group, Freedom Caucus, Trump, and Ryan’s conservatives cut deals. Under the changes Medicaid can have work requirements, the Essential Health Benefits may be removed, states will be able to offer more help to seniors (not at ACA levels, but still worth noting), and a few other subtle things will change. These changes were kept in the Senate bill, but dates and specifics were changed. The end result of the House measures was more cuts to Medicaid, but over a longer time period and starting at a later date. the senate then came back and made big changes which are explained in the next paragraph.
ON DEFUNDING MEDICAID. On Medicaid expansion: Obamacare’s Medicaid expansion is phased out over four years under this bill. 90% of the current federal funding would be provided in 2020, and it would decrease by 5% each year until 2023, after which it would be eliminated. People would not be allowed to join the expansion from 2020 onwards. In other words, it freezes expansion as the House bill did. On the plus side, tax credits will be available to people that fall off the expansion because there is no cut-off at 100% FPL. This means millions will lose access to coverage, and millions more who would have been covered in the future won’t be; the change happens more slowly than it did with the House bill. On Medicaid spending: The Senate bill retains the House’s per capita cap for federal Medicaid spending. After 2025, however, growth in spending would shift from the consumer price index for medical care to the CPI for all goods, a lower level of growth. That means states will get less funding for Medicaid in general (not just expansion) and then rates will continue to decline after 2025. This is a bigger cut than was in the House bill.
TrumpCare Also Does the Following
The following are some of the major changes made by the AHCA and BCRA. The Changes below reflect the bill as it stands as of July 13th, 2017 (although with all the changes a few details could still change):
- The Individual Mandate stays, but the fee is retroactively repealed starting December 31, 2015. That means people won’t be charged a fee for not having coverage (although there is a fee paid directly to insurers for 12 months for buying back in).
- The Employer Mandate stays, but the fee is repealed. That means fewer full-time employees will be offered coverage as there will be no penalty for not offering coverage.
- The mandate is “essentially” replaced by a Continuous Coverage Provision. Those who have a gap in coverage of 63 days or longer with have a 6 month waiting period to re-enroll starting at their next enrollment opportunity (which would generally be open enrollment).
- Medicaid expansion funding will be frozen and Medicaid funding in general will be reduced (date subject to change), and a high-risk pool of sorts will be implemented. This pool helps to offset the newly uninsured. TIP: See details. This issue is complex. Many of the uninsured come from this provision.
- Tax credits are based on age and income from 0% – 350% FPL (but there is no slow phase out up to 600% FPL, 350% is the cliff).
- Cost Sharing Reduction subsidies are approved until 2019 on a per-month basis (so they are cut, but they aren’t cut right away like they were in the House bill).
- Employees won’t have access to tax credits, but after 2020 the new age-based credits can be used for any individual health insurance policy regardless of where it’s purchased.
- Ratios for what seniors can be charged by insurers for premiums increase from three times what the youngest enrollees are charged to five times.
- Planned Parenthood will be Partly Defunded (as they won’t be able to accept Medicaid due to a complex rule change); funding would be given to Community Health Centers instead. Many of these do not yet exist and would have to be created.
- Premiums can be paid with HSAs using tax free dollars.
- Waivers for essential health benefits allowing for “junk plans” (low premium, high deductible, and low benefit plans).
- Flexibility on Medicaid funding if a public health emergency takes place.
- Funds for market stabilization and high risk customers.
- Funding for opioid epidemic (to offset defunding for the Medicaid population and waivers for health benefits).
- There is a Block grant option to allow states to add the newly eligible Medicaid population to coverage under the block grant.
- The Medicare Part A Tax increase of 0.9% over $200,000 for an individual or $250,000 for a family will be retained.
- The Medicare Tax on Investment Income of 3.8% over $200,000 for an individual or $250,000 for a family will be retained.
- Contribution limits for Health Savings Accounts (HSAs) will be increased substantially, but one still needs a High Deductible Account and the money to fund it.
- The Annual contribution limit to health Flexible Spending Accounts (FSAs) will be repealed. The ACA capped this limit.
- The 40% Excise Tax “Cadillac” on high-end employer-sponsored health plans is suspended for tax years 2020 through 2024. This has already been kicked down the road by Democrats and Republicans.
- The 10% tax on tanning beds would be repealed.
- The $500,000 Annual Executive Compensation Limit for Health Insurance Executives will be repealed.
- The tax on brand name drugs will be repealed.
- The tax on health insurers will be repealed.
- The 2.3% tax on medical device manufacturers will be repealed.
TIP: The ACA included about 20 tax provisions; the AHCA undoes or changes many of them. The list above is not exhaustive (see a full summary of the BCRA before changes here). Learn more about the taxes in the ACA.
The Bottomline on TrumpCare
The bottom line on ObamaCare vs. TrumpCare is perhaps best expressed by the following points:
- TrumpCare gives large employers, young healthy people, and industry a break in costs via tax cuts and deregulation. It also helps those who live in states that didn’t expand Medicaid but have the money to buy insurance with cost assistance (a small, but notable group).
- The plan presents some real complications for the sick, poor, low-income workers, seniors, and women due to reduced assistance and the defunding of planned parenthood, higher age ratios and less assistance for non-Medicare seniors, the freezing of Medicaid Expansion, and the focus on tax breaks and HSAs over assistance.
- Healthcare providers will lose countless patients, and this could cause a health ,care provider crisis.
- Young people are not incentivized to get plans and this could cause a problem with insurance.
- Employees who just got coverage and small employers will lose assistance, but large employers won’t be burdened with the complexities of choosing between health care and full-time employees.
Thus, the bottom line here is that the law reduces costs for the wealthy, healthy, and young and substantially raises costs for many in other demographics.
The middle class won’t notice much difference unless they get sick and go without coverage. Our poorest people, women, seniors, and low-wage workers will see some new hurdles.
Those with higher incomes will most certainly benefit.
FACT: Single policyholders in the non-group market stand to see premiums that are 15% to 20% higher than under current law, however as the years roll along, costs are projected to come down to prices as much as 10% than the current law. To be fair, this would be true for the ACA too. The prices were projected to spike and then to go down. That is not being acknowledged by Trump or Ryan who instead choose to use terms like “death spiral.” Learn the truth about the “death spiral” myth.