Obamacare to Trumpcare – What might happen?

compliance greyWith the election of Donald Trump the Affordable Care Act, commonly known as Obamacare, has a very large target on it.

Significant change to healthcare in the US is coming and it will be driven by a numbers of factors.

It began hours after the inauguration when President Trump issued an Executive Order directing all agencies to waive, defer, grant exemptions from or delay the implementation of any provision or requirement of the ACA that imposes any cost, fee, penalty or regulatory burden on any individual, health care provider, health insurer or purchaser of health insurance.

What does this mean? In the short term nothing.  New regulations will have to be issued and need to follow a legally established process that requires public notice and the opportunity for comments from interested parties.

In the long term it begins the process of repealing and replacing the ACA.

The Republicans now control both houses of Congress as well as the Presidency. Recently a bare bones budget was passed enabling the Senate to invoke a Budget Reconciliation process where by they will be able to pass legislation with a simple majority avoiding a Filibuster.

Tom Price, a physician, has been nominated as the Secretary of Heath & Human Services. He is a close confidant of Speaker Ryan and Vice President Pence and has been vocal about the need for replacing Obamacare.

So what will happen? With the passage of the budget, committees in the House have been crafting replacement healthcare legislation.  Components of that legislation are likely to include:

  • No employer or employee mandate to purchase insurance
  • Elimination of subsidies for the purchase of Healthcare
  • Elimination of many but not all ACA taxes & penalties
  • Phased out Medicaid expansion with the intent of block grants back to the States
  • Tax credits for those without access to Medicare, Medicaid or employer based insurance toward the purchase of healthcare
  • Purchase of insurance across State lines
  • Allowing small business to form associations for the purchase of healthcare
  • Medical liability limits
  • Coverage for dependents to age 26
  • Protection of pre-existing conditions
  • Expanded use of Health Savings Accounts
  • Allowing individuals to opt out of Medicare and purchase a private plan
  • Limits on the employer tax exclusion of healthcare

Combined with the repeal and replacement of Obamacare there is a move to reform the tax code. This includes reducing the Corporate Tax from 35% and reducing the number of Individual tax brackets and reducing the top bracket from 39.6%.

It is yet to be known if the new law will address the role of the individual, the definition of healthcare or the role of the Federal Government.

Any changes will not likely be effective until 2018 or 2019. In the meantime, changes may be made through Executive action and or through the power granted to Secretary Price.

Regardless of what changes are in made, only time will tell if these changes will improve the affordability, quality and access to healthcare.