Differences Between TrumpCare and ObamaCare

(Updated May 27, 2017- and will be updated again as TrumpCare evolves)

To understand TrumpCare we have to first go back and redefine the insurance industry. It used to be that insurance was essentially a large scale, calculated group gamble. A group of 10 people each put in $100/month, with the expectation that of those ten people, 8 of them would probably only use about $100/month, give or take a few dollars. One person wouldn’t use their insurance at all, but would purchase it just to be safe. And the final person would likely need to use far more than $100, but the unused portion from the other nine people would cover the difference.

But then healthcare got more expensive and the pooled amount from the ten people didn’t cover everything. So the insurance providers raised the rates to $200. And then for the people that needed more than the $200/mo, they asked for more money. And lowered the rates for the group of people who barely used it.

To the business mind this makes sense. The person who uses more of the resources should have to pay more. But in reality what this really did was actually take money out of the system when they lowered the rates for the lower users.

And so they raised the rates on everyone. Again.

So people complained. And rightfully so. They were paying a lot more and receiving the same amount of care. And more and more people couldn’t afford insurance.

And then came ObamaCare, and the idea that access to healthcare was a right.

ObamaCare created more access to insurance by creating mandates, and tax credits. Mandates is just a fancy word for penalty. Fail to get insurance, pay a mandate.

Tax credits were not as easy to understand. To put it in simplest terms, pretend you receive a tax refund each year of $1,000. ObamaCare took that $1,000 and put it towards your insurance premiums for you, in theory, lowering your monthly insurance expenses. It also did away with all pre-existing conditions. You no longer paid more if you used more. Basically it used your own money to subsidize your insurance premiums.

It also greatly expanded Medicaid.

The problem was it varied from state to state, and didn’t always work the way it was planned. It raised taxes, and users no longer received tax refunds. And in many cases, at the end of the year, owed more money to the government to cover their tax credits.

Opponents of ObamaCare didn’t like the mandate or the higher taxes, or the poor administration and application of the program, which unarguably, was full of faults.

Which brings us to TrumpCare.

TrumpCare does away with the general pool and calculated gamble idea of insurance. And instead takes the “business is in business to make a profit” approach. The majority will pay a calculated, evened out sum. Some will pay less, and get less. And the higher risk, higher use pool will pay more.

And Medicaid is scaled back dramatically.

Mandates will be gone. And so will the use of tax refunds to pay for premiums. Instead, TrumpCare takes the nearly opposite approach. What you spend in insurance can be used as a tax deduction.

Under TrumpCare, if you go for more than 63 days without insurance, you will be penalized a 30% increase on your premiums. Individual insurance providers will be able to determine which pre-existing conditions will cost more. You cannot be denied coverage for a pre-existing condition; you will pay more for a pre-existing condition.

ObamaCare attempted to create more federal control over insurance, so that it was more homogenized across the country. Except due to interstate commerce and medical rules, much of it was still controlled at the state level.

TrumpCare turns the majority of control over to the states. Including the right to decide which pre-existing conditions can cost more. It also creates the opportunity for state run “high risk pools.” The idea behind “high risk pools” is a compassionate apology to the chronically ill. Those individuals who need more health care may be able to receive assistance from the “high risk pool.” This would cap how much an individual would pay out of pocket a year, and acknowledging that this pool of people may not be able to work or pay for themselves, creates a subsidy to assist.

According to the AARP, high-risk pool premiums for people with preexisting conditions could be as high as $25,700 annually. Under Obamacare the out-of-pocket maximum for a plan in 2016 was $13,700.

If there were a simple way to wrap up what TrumpCare is and what it aims to do, the bottom line would be that it does nothing to make healthcare more affordable, or more easily accessible. Overall, TrumpCare offers tax cuts to the industry, not to the users. ObamaCare taxed those who profited off of healthcare.

Last but not least, it is worth noting that over the next decade, Obamacare was projected to reduce the total deficit by $124 billion. In its most recent assessment, the C.B.O. said repealing Obamacare would increase the deficit by $353 billion between 2016 and 2026.

In what I hope is my only slightly biased commentary on the subject, there is one question I'd like to raise. Is healthcare a "right?" Can a commodity ever be a human right? Can something be a human right when it forces that another person to work or serve? Of the named rights in the U.S. Constitution, (right to free speech, right to bear arms, right to assemble, etc) no other inalienable right requires the work or services of another person. I'm not determining an answer here. Just raising the question.

Wrapping Up-

When possible, I used direct facts, and shared them as I found them in the actual text of the American HealthCare Act (AHCA), also known as HR 1628. I never take a detail or fact if it cannot be confirmed with hard data, and if and when possible, avoid dramatically biased sites such as Breitbart, DailyKos, etc.

Sources Used
Money magazine (subsidiary of Time)
AARP report on the AHCA
TrumpCare Facts website
ObamaCare Facts website (both TrumpCare and ObamaCare Facts sites are very biased. I only used information that correlated across both sites.)
Wall Street Journal
Washington Post
NY Times

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