The American Health Care Act of 2017, commonly known as TrumpCare, has passed the House of Representatives… regardless of your politics, major changes are likely on the way for the nation’s medical and health insurance industries.
According to the World Bank, the United States spends more on health care than any other nation on earth – 17.1% as of 2014, which is likely to have risen even more since then with the rising premiums and increased enrollment in health insurance plans under the Affordable Care Act. And as burdensome as that is, the employer mandate and tax incentives prevent the impact on the individual from being even worse.
Trump’s plan is based on a shift from income-based incentives and a unified market (the Obamacare exchange) to private-sector providers and an age-based tax credit, regardless of income or the cost of your premiums. While the total cost is likely to remain about the same on a national basis, the individual impact of this bill can be profound.
WINNER: High Income Earners
The wealthiest Americans, who currently receive no tax benefit on their insurance premiums, and are already most likely to have health insurance and not be subject to the individual mandate’s tax penalties, will become eligible for a tax credit of $2000 to $4000 depending on age. The New York Times’ analysis showed Trump’s plan on top for individual incomes above $75,000 at all ages and in every state.
LOSER: The Working Class
Typical wage-earners making up to $40,000 will lose money if they choose to keep health insurance, which may no longer be advisable under the Republican proposal.
WINNER*: The Uninsured
This one comes with a caveat. While the individual mandate is likely to go away, relieving the tax burden on the uninsured, other provisions in the law make it more difficult to enroll in health insurance plans after a lapse in coverage, and likely more expensive as well.
LOSER: Patients with Pre-Existing Conditions
Under the AHCA, a long list of common health conditions, including chronic diseases like cancer and diabetes, but also life events like pregnancy, lifestyle choices like drug use, and genetic predispositions and family history for certain diseases, give insurers the right to cancel coverage or only offer much more expensive high-risk policies.
WINNER: Residents of New York, Washington and Massachusetts
In these three states, state health plans greatly reduce or eliminate the negative effects of Trumpcare — however, this may be temporary as the state governments absorb the enormous increase in spending from a lack of federal subsidies.
LOSER: Residents of Alaska
Due to its low population density and dependence on air travel, getting health care in Alaska is much more expensive than the Lower 48. Obamacare accounted for this, with a national health insurance exchange and the ability to spread this cost between all states. The AHCA’s removal of these exchanges will likely cause many insurers to pull out of Alaska and those who remain to charge rates in line with the real cost of care in the 50th state.