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AHCA vs ACA: How Trumpcare Differs from Obamacare

You have to be living in a cave not to know that there’s an ongoing debate among Americans right now, regarding Obamacare vs. Trumpcare. Unfortunately, often people side with their political party without knowing all the facts. With all the hype about the proposed AHCA and the current ACA, many Americans are confused. If you’re puzzled over how these two plans differ, you’re not alone. Here are some of the basic differences between the ACA (Affordable Care Act) or Obamacare and the proposed AHCA (American Health Care Act), also known as Trumpcare.

 The Individual Mandate 

One of the main differences is a change in the individual mandate.

  • Obamacare: Under Obamacare, all eligible U.S. citizens are required to buy health insurance so that insurance coverage is affordable for everyone.
  • Trumpcare: Under Trumpcare, the individual mandate is repealed, meaning Americans are no longer fined if they don’t buy health insurance. Instead, the new requirement is continuous coverage, and faili remain covered can mean a 30 percent increase per month in insurance cost. What’s more, large companies won’t be compelled to pay when they fail to provide insurance for their employees.

Tax Deductions

  • Obamacare: Under Obamacare, you’re only allowed to deduct medical expenses if your medical costs are more than 10 percent of your household’s adjusted gross income.
  • Trumpcare: With the new healthcare plan, you may have the opportunity to deduct the entire cost of your health insurance premiums from your tax returns.

Prescription Medications 

  • Obamacare: There haven’t been any provisions under the Affordable Care Act that addresses support for importing overseas drugs.
  • Trumpcare: President Trump has suggested the option of letting Americans buy prescription medications from other countries because this can reduce costs.

Funding for Medicare

  • Obamacare: Currently, under Obamacare, funding for Medicare is based on what’s known as an open-ended matching system. This means that the federal government guarantees it will cover $1 for each $1 that’s spent by the state.
  • Trumpcare: Under Trumpcare, Medicaid expansion will stop, and few Americans will qualify for Medicaid. Also, new Medicaid enrollment will freeze in 2020.

Cost Assistance

  • Obamacare: Americans earning up to four times the federal poverty line are able to obtain cost assistance for purchasing insurance on the marketplace. About 85 percent of people signing up meet the qualifications.
  • Trumpcare: Unlike Obamacare, Trumpcare is based on the age of a person rather than their income. This plan offers tax credits to Americans needing assistance for paying for health insurance.

Essential Health Benefits

  • Obamacare: All health insurance policies that are offered in marketplace were required to cover the 10 essential health benefits so that even the cheapest plan provides some degree of coverage. 
  • Trumpcare: Under the AHCA, it’s the states that will determine if they’ll require insurance companies to cover the 10 essential health benefits.

Age Rationing Ratio

  • Obamacare: Under ACA, insurance carriers aren’t allowed to charge Americans belonging to an older demographic more than three times as much as those of a younger demographic. In other words, the age rationing ratio was 3:1.
  • Trumpcare: Under Trumpcare, the age rationing ratio could change to 5:1. This means insurance carriers will be able to charge older demographics five times more for insurance than younger demos.

Features That Won’t Change

Both plans have some similarities, meaning there are features under the proposed Trumpcare plan that will not change. For example: 

  • People who have pre-exisiting medical conditions will not be denied coverage for insurance. However, Trumpcare lets each state determine whether insurance carriers can charge patients who have pre-exiting conditions more for obtaining healthcare.
  • Young people who are under age 26 can still be covered under their parents’ insurance plans.
  • Insurance carriers still won’t be permitted to set both annual and lifetime restrictions on the amount they’ll reimburse people for essential health benefits. These include those such as physician services, prescription medication coverage, inpatient and outpatient hospital care, maternity care and services for mental health.

 Other Considerations and Warnings

  • Under Trumpcare, abortion funding is restricted, meaning that facilities providing abortions, such as Planned Parenthood, won’t get federal funding.
  • If Obamacare remains intact, about 28 million Americans would stay stable for the next ten years. But if Trumpcare replaces Obamacare, it’s estimated that roughly 54 million people could lose their health insurance by the year 2026.

 Questions? Please contact us and learn more about these two plans affect Americans.