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.
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.
