Obamacare and Trumpcare: a comparison

A few months back, no one would have expected that US elections would take such a turn. Ever since Donald Trump became president-elect, there have been speculations that Russia, or rather Putin, conspired to make Trump the President. Whatever the speculators say the fact remains that Trump took oath on 20th January and is now President of one of the most powerful countries in the world, The United States of America. Trump’s election manifesto mainly focused on two things, firstly, to improve and upgrade the country’s defence mechanism, secondly, to repeal Affordable Care Act or Obamacare and create a comprehensive healthcare policy. It was quite unusual to see a politician sticking to his words; Trump signed an executive order to repeal Obamacare within a few hours of taking his oath of office. Signing his first order at the Oval, Trump sent a powerful message to the citizens that he will abide by his words that he will restore faith in the government and provide economic liberty to all citizens. During his election speeches, he emphasised on creating a sound public policy that will broaden healthcare access, make healthcare more affordable and improve the quality of the care available to all Americans. He also believes that it would be obstinate the economic damage incurred by Obamacare to the nation. Some Trump supporters have divided opinion on Obamacare, some people think Obamacare should be completely repealed whereas some people think Obamacare is should not be repealed. This step surely looks in a positive direction, but let’s analyse Obamacare and Trumpcare.

Mostly, people are under the impression that Obamacare has been repealed and is now no more a law. But what it means is that Trump has partially repealed Obamacare keeping some points intact. The Senate rules forced them not to fully repeal the Affordable Care Act (ACA). Now, the Trump Government is planning to use budget reconciliation to pass their “Repeal Bill”. Budget Reconciliation is limited to items directly related to federal spending, revenue and fiscal effects and can’t be used for making big policy changes. They cannot repeal Obamacare fully, as they would require at least 60 votes in the Senate whilst they have only 52 members. Budget Reconciliation will allow them to pass the legislation with a bare majority. There has been a scission in the Grand Old Republican Party on what points of Obamacare should be kept intact and what points should be implemented. They have been arguing on many points weather allowing young adults to stay on their parents plan until 26 years of age or take out the requirement for everyone to buy insurance or pay penalty. Most Republicans are voting out the clause of buy insurance or pay penalty, as they believe that this clause implies unnecessary burden on the citizens. This chopping of Obamacare would take a considerable amount of time.

Moreover, high rates of enrolment for Medicaid under Obamacare increased the numbers of health insurers in US to more than 20 million. As per Council of Economic Advisor’s report under President Obama, expanded coverage under Affordable Care act prevented 24,000 deaths annually. Furthermore, a reduction of more than $300 billion in fiscal deficit of the country over next ten years is projected pertaining to ACA law. However, it needs to be noted that United States of America is still the highest payer on healthcare with a spending of nearly $3.2 Trillion in 2015.  A whopping 17.5% GDP was spent on healthcare in 2014. Even then, approximately 10.5 % people under 65 remains without an insurance cover whereas 4.5% population of states could not afford medical care due to cost issues.  Life expectancy remains to be 79.3 (Global Health Observatory Data, WHO, 2015), which is way less than many other developed countries. More than one third of adults in US are Obese whereas overweight plagues nearly 70% of adults over 20 years of age in 2013. In 2011-14, 12.3% American lived with Diabetes. Heart disease remains the leading cause of death among Americans. Leaving alone the preventive Health, healthcare does not seem to be very sunny in United States of America. However, it may be too early to judge the fruits of Obamacare whilst Trump is all set to replace the current form of law. While Obamacare aimed for quality, Trumpcare is heading more for coverage for all. Although Trump has emphasized on ‘insurance for everybody’ agenda, the finer details on the policy, implementation and execution are still anticipated.

 The United States is moving towards Republican ideology of Healthcare, which would also allow insurers to offer policies across state lines. If the purchased plan complies with state requirements, any company will be able to offer insurance in any state. This will allow more competition in the market, which would result in insurance costs going down and consumer satisfaction going up. They are also working towards providing price transparency from all healthcare providers, which would enable citizens to find lucrative fee for medical procedures and examinations. Trump during his electoral campaign affirmed his stand on fair and competitive costing, as “Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.” This makes it quite certain that Trump with his exemplary deal making skills is going to bargain hard with healthcare providers, insurance firms as well as medical equipment manufacturers for much fairer prices.

Trump instructed agencies to find ways to minimise needless economic burdens, but the way ahead is still unclear. He stood to his promise to repeal Obamacare the very first day but its only half job done as he said that Obamacare would be repealed and replaced simultaneously. Donald Trump, a very good businessperson has smartly played the card of simultaneously replacing Obamacare and bought a considerable time. The transition period between abolishing parts of current Policy and introducing new points could take several months or maybe more than a year. Many people are furious over Trump for not having draft of a new policy ready before repealing the Affordable Care Act, which could in fact create a chaos in the market between insurers and insured citizens. A recent study published by the Congressional Budget Office stated that “The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill. Later, after the elimination of the ACA’s expansion of Medicaid eligibility and of subsidies for insurance purchased through the ACA marketplaces, that number would increase to 27 million, and then to 32 million in 2026. Premiums in the non-group market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent, relative to projections under current law in the first new plan year following enactment. The increase would reach about 50 percent in the year following the elimination of the Medicaid expansion and the marketplace subsidies, and premiums would about double by 2026”.

As the GDP of USA is on a 5-year low and every day as fresh Executive Orders are being signed by the new president, the Republicans are worried for the future of the country. A joint CBO and JCT estimates that repealing ACA would increase the federal budget deficit of the country by $137 billion over the period from 2016-25. However, GDP may average around 0.7% over 2021-25 due to repeal, owing to increase in economic outputs. On the other hand, savings due to repealing the insurance coverage under the Obamacare would grow at extremely slow rates. The cost benefit ratio is quite uncertain considering the health of Americans is at stake. There is an estimated rise in uninsured nonelderly population by 22 million in 2017 as compared to same subject group projection under Obama led ACA. Moreover, individually purchased coverage or via Medicaid is also expected to fall by 30-32 million. On the other hand, employment based coverage is expected to go up by 8 million. Does those figures give an insight into Trump’s “Insurance for Everybody”? Well, that is still speculative.

Recently, Trump reiterated “But they’ll be beautifully covered. I do not want single payer. What I do want is to be able to take care of people.” This multiplayer approach in providing a universal and affordable healthcare would be the toughest challenge for the new US President. If this idea of broader coverage at affordable cost becomes successful, it would definitely draw several lessons in healthcare for countries all over the world to follow. The fine structure of new law is still awaited. This transition period between repeal and replace is the critical one. Republican representative Diane Black at a weekly address reassured the ‘smoothness’ of this period. Putting the healthcare in hands of people seems to be a key Republican Agenda for making “America Great Again”. It would be definitely interesting to witness if Trump could make “Healthcare affordable again’’ and “America healthier again”.