Trumpcare (AHCA) vs. Obamacare (ACA)

Affordable Care Act

Trumpcare (AHCA) vs. Obamacare (ACA)

Published on October 22, 2017

Share

An updated version of this article reflecting changes for 2019 can be found here.


The Senate failed to the AHCA, which means it cannot become a law. ThisThe following information provides an outline of the AHCA, which failed to become law.  
.
Trumpcare is a nickname for the American Health Care Act (AHCA), a replacement plan for the Affordable Care Act (ACA or Obamacare) that was written by Republicans in the House of Representatives.
The AHCA was voted on, and passed in the House on May 4, 2017.
For the AHCA to become law, the United States Senate would have to vote on the bill and pass it with a majority vote. It would then need to go to the President’s desk and he would have to sign it into law.
.
Here’s a breakdown on how the two pieces of legislation match up:
 
 

Key Policy Differences

Affordable Care Act

(Obamacare)

The American Health Care Act

(Trumpcare)

Is there a federal tax penalty for not having health insurance?
Yes
No
Does the federal government provide subsidies or tax credits to pay for health insurance premiums?
Yes
Yes
Are there income limits on those tax credits?
Yes
For 2016 returns, the limits for the continental US were (approx.):
$47,080 for an individual
$97,000 for a family of 4
Yes
They begin to phase out at $75,000 for an individual
They begin to phase out at $150,000 for a family
What is the maximum tax credit or subsidy amount that the government will pay?
There is no fixed dollar limit.
The credit ranges from $2,000 per year (for a young, single adult) up to $14,000 per year (for a family that includes older adults.)
Can I buy a plan that doesn’t cover benefits I don’t want (like mental health and substance use disorder services)?
No.
All qualified health plans must cover Obamacare’s “10 essential health benefits”
Yes, if your state receives a  special waiver from the federal government
Can parents keep their adult children on their health insurance plan until age 26?
Yes
Yes
Can my application for health insurance be declined if I have a pre-existing condition?
No
No
If I have health insurance without a recent break in coverage, can I generally change my plan during the normal enrollment periods without paying a penalty just for having a pre-existing condition?
Yes
Yes
If I have a newborn baby, can I add my baby to my health insurance plan, or buy a new plan that covers the baby, without penalties or higher costs just because the baby has a pre-existing condition?
Yes
Yes
If I’ve been uninsured for several months, could I be charged more for my health insurance I have a pre-existing condition?
No
Possibly (see extended answer below*)
Are there specific open enrollment periods when I can sign up for insurance or change my plan?
Yes
Yes
Are their special enrollment periods when I can change my insurance if I have certain life events that require me to do so?
Yes
Yes
Who defines the mandatory benefits that will be covered by my health insurance plan?
Federal agencies
Federal agencies, or states when they are granted a special waiver
Does it place any caps on profit-taking by health insurance companies (through “medical loss ratio” rules)?
Yes
Yes
Does it generally give states the authority to manage their Medicaid funds without federal mandates? 
No
Yes
Does it have a Federal Invisible Risk Sharing Program? (see definition below)
No
Yes

 
.
*Q: How do the ACA (Obamacare) and AHCA (Trumpcare) treat people differently if they have a pre-existing condition? 
A: Both laws have rules in place to prevent people from waiting until they get sick to buy health insurance.
Here is how they differ:
Under the ACA (Obamacare) there is an individual mandate, which requires every American to buy health insurance and maintain that coverage year-round. Those with a gap longer than two months generally have to pay a tax for being uninsured, and can’t sign up for new insurance until the next open enrollment period.
Under the AHCA (Trumpcare) there is no individual mandate. Instead, states can apply for a waiver that would allow them to make their own rules that encourage people to maintain health insurance coverage year-round.
Like the ACA, the AHCA sets up a system where a person who stays insured, without an extended gap in coverage, will typically not pay a different price for health insurance based on whether or not that person has a pre-existing condition.
But, unlike the ACA, the AHCA give states the authority to change the pricing rules for people who do not stay insured year-round.
One of the things a state can do is charge people who go uninsured for an extended period of time, and have a pre-existing condition, a higher rate for their health insurance, for a certain time period that is generally expected to be up to 12 months.
.
Q: Why not simply stick with the individual mandate to make sure everyone has health insurance?
A: The individual mandate has not worked.

  • 19 million opt-out of Obamacare: According to a March 2017 article by the Associated Press, 19 million people have opted-out of Obamacare, either by paying the uninsured tax (6.5 million) or by filing a hardship exemption (12.7 million).
  • 18 million enroll in Obamacare – Roughly 18 million have enrolled, including about 11 million on government exchanges and almost another 7 million off exchanges.
  • Many who enroll in Obamacare cancel their coverage – By some estimates, more than 20% of those who do enroll in Obamacare cancel their plans during the year. Some consumers who purchased coverage on state-run exchanges have seen their plans cancelled for unknown reasons.
  • Many doctors don’t get paid by patients on Obamacare – According to the Great American Physician Survey, 45% of doctors with patients on Obamacare have problems collecting large deductibles from patients, and 24% see claims denied because patients’ don’t pay their premiums.

.
Q: What is the Federal Invisible High Risk Sharing Program?
A: The Federal Invisible Risk Sharing Program is essentially a pool of money set aside by the federal government to help insurance companies cover high medical cost individuals.
These risk pools differ from many risk pools used in the past because they’re invisible to the customer. In other words, high medical cost individuals typically would not know they’re in the risk pool.
Assuming they have maintained continuous coverage, such individuals are expected to pay the same price for their health insurance as people who are healthy.
Please note that, as of the time of this article, the AHCA is quite likely to change before it becomes law, if it ever becomes law.  So far, it has only passed the House of Representatives, but it must still go through the Senate, which is very likely to make many amendments and may not pass the AHCA at all.
Therefore, you should not cancel or change your current health insurance coverage in anticipation of the AHCA being implemented in any particular form, or at all.
 
The Chart Breaks Down The Differences Between Obamacare, the House of Representatives’ Plan, and the Senate Plan

 
 
This Chart Compare Obamacare to the House’s AHCA Proposal


 
 
 
 

We’ll let you know when we publish anything new.