Obamacare has been effective for 7 years,
with major provisions phased by 2014 and remaining provisions phased by 2020. The average premium
doubled from $232 to $476 per person after Obamacare’s 2014 implementation. It is not
a fair comparison despite the seemingly steep hike as the insurance market and schemes and
benefits offered are profoundly different. Recently, New York insurer filed for a 16.6%
premium increase for 2018, and the North Carolina insurer demanded a 22.9% increase. The increase
in mainly due to the uncertainty of whether the Trump administration would fund Cost-Sharing
Reduction payments, which is a $7bn reimbursement for low-income enrolees in copays and deductibles.
While the ultimate attributable causes of premium hike is unclear, it is still a reality
and it’s taking a financial toll on the customers, especially the middle class. Moreover,
the growth in healthcare cost is faster than the growth in GDP partly due to the subsidies
and tax credits handed out in ACA, meaning that it is worsening the federal budget problem.
Therefore, American Health Care Act, or Trumpcare, is being publicly released by House Republicans
in March 2017. In May 2017, the House of Representatives voted to pass Trumpcare, sending the bill
to the Senate. The Senate will redraft the bill instead of voting on the existing version.
The bill allows states to decide if insurers can charge higher premiums for people with
pre-existing conditions. It removes individual mandate and instead emphasises continuous
coverage by enforcing a one-year 30% increase in premium if consumers allow a lapse in coverage
for more than 63 days. It also scales back federal support for Medicaid funding by allowing
states to decide if they wish to accept federal grant for Medicaid, and expects to scale the
funding down to 90% of the current level. This means the low income group would still
be covered, but those with middle income could potentially lose their financial assistance.
States get to choose if the 10 essential benefits have to be included in the policies by applying
for waivers for the insurers. In addition, the full health insurance premium amount is
tax-free. In Obamacare, insurers cannot place annual
and lifetime limits on coverage but Trumpcare allows these limits.
If Trumpcare were signed into law, it is expected to offer savings both in federal spending
and premium paid. At the same time, it is likely to leave more people uninsured. The
younger, healthier and richer who mainly voted Democratic are better off. The older, blue-collar
whites or the very people who put Trump into office are squeezed by the reform and face
larger out-of-pocket expense.