With each new administration, there are changes to the way average Americans experience their day-to-day lives. This is especially noticeable when changes are made to healthcare and related services, as it directly affects the lives of millions of Americans.
The Obama administration brought us the Affordable Care Act (ACA) health reforms, known as Obamacare. And when Donald Trump became the new President of the U.S., his administration proposed changes to the ACA.
While the Senate failed to pass the Trumpcare bill (AHCA), it’s interesting to note how Trumpcare compares to Obamacare.
Whether you’re seeking clarity about your existing coverage under Obamacare or curious about the proposed changes brought by Trumpcare, you’re in the right place. This article examines Trumpcare vs. Obamacare – the differences, similarities, pros and cons.
An Introduction To Obamacare And Trumpcare
Two significant and divergent approaches have shaped the American healthcare landscape: Obamacare and Trumpcare. Both approaches sparked intense debates on issues ranging from access and affordability to the role of government in healthcare.
Obamacare In A Nutshell
The Affordable Care Act, or Obamacare, was enacted in 2010. The health reform law sought to make healthcare affordable through health insurance to benefit everyone, including low-income earners.
The ACA did away with the denial of coverage for pre-existing conditions. The cap on coverage was outlawed, meaning insurance companies could no longer put annual or lifetime limits on essential health services. The ACA also covered services like preventative care and prescription medication.
While these and other medical insurance reforms, like the expansion of Medicaid, were well received, one was not. The ACA made health insurance mandatory and included penalties for not having health insurance. This individual mandate required most Americans to have health insurance coverage or pay a tax penalty when filing their federal income taxes.
The idea behind this was to create a broader and healthier insurance pool, which would help stabilize insurance markets by spreading the risk across a larger number of individuals. While well-intentioned, this mandate became very unpopular and was eventually scrapped.
However, the repeal was only at the federal level. The states of California, Massachusetts, New Jersey, and Rhode Island decided to retain an individual mandate and tax penalty, as did the District of Columbia. Vermont also has the mandate but does not impose a penalty for non-compliance.
Does Obamacare Still Exist?
Although President Trump’s AHCA aimed to amend the ACA and even repeal part of it, this was unsuccessful.
Obamacare remains active despite the federal repeal of the Individual Mandate clause. By 2022, 35 million people across the U.S. had health insurance under the ACA.
Overview Of Trumpcare
In 2017, under the Trump administration and seven years after the advent of Obamacare, a new bill was proposed. The American Health Care Act (AHCA), otherwise known as Trumpcare, was a health reform plan that the Republicans wrote.
Intended as a replacement plan for President Obama’s ACA bill, it was voted on and passed in the House of Representatives on May 4, 2017. However, it never passed through the Senate and did not become law.
In 2020, President Trump signed an executive order declaring it U.S. policy to protect people with pre-existing health conditions. But this was already assured in part of the earlier bill from the Obama Administration, the ACA.
That was one of the very few similarities, though. Trumpcare sought to reduce much of the federal spending that Obamacare necessitated.
It also did not support Obamacare’s individual and employer mandates and accompanying tax penalties that made it the law to have health insurance.
Trumpcare Proposals For The Healthcare System
During the discussions and debates about repealing and replacing the ACA, there were principles and ideas proposed by the Trump administration and some Republican lawmakers.
These proposals aimed to reduce government involvement in healthcare and provide more flexibility to states and individuals. Some key ideas included:
- Elimination of Individual Mandate: One of the main features of the ACA was the individual mandate, which required most Americans to have health insurance or pay a penalty. Trumpcare proposals aimed to eliminate this mandate.
- Alteration of Employer Mandate: The ACA also included an employer mandate, which required large employers to provide health insurance to their employees or face penalties. Some Trumpcare proposals sought to eliminate or modify this mandate.
- Expanding Health Savings Accounts (HSAs): Tax-free health savings accounts were already under the Affordable Care Act. Trumpcare would continue to allow individuals to use Health Savings Accounts (HSAs).
- Allowing cross-state insurance sales: Some proposals suggested enabling insurance companies to sell plans across state lines, potentially increasing competition and providing consumers with more options.
- Medicaid reform: Trump proposed a freeze on Medicaid expansion funding with additional cuts to federal funding
- Pre-existing conditions: Bans on discriminating against preexisting conditions, as instituted by Obamacare, would be kept in place.
- Essential health benefits, as required of ACA plans, could be excluded from plans on a state level. However, a state-based waiver had to be obtained from the government.
Trumpcare would have offered millions of Americans the same primary advantages as Obamacare but with less government spending and more state autonomy concerning how insurance plans were structured. However, the changes proposed by Trumpcare would have had some severe consequences for millions of Americans.
Trumpcare Vs. Obamacare: What Are The Differences?
What were the glaring differences between Obamacare and Trumpcare? Were there any striking similarities? We examine both in the tables below.
Trumpcare And The Affordable Care Act – Main Differences
|Key Differences||Obamacare (ACA)||Trumpcare (AHCA)|
|Individual Mandate||Individual mandate for health insurance and a tax penalty for non-compliance||No individual mandate and tax penalty enforcing sign-up for health insurance|
|Medicaid||No state authority to manage Medicaid||The State had the authority to manage Medicaid|
|Risk Sharing||No Federal Invisible Risk Sharing Program to absorb the costs incurred by insurers covering high-risk individuals. |
Although Obamacare has done away with the discriminatory rules that hurt high-risk people with pre-existing conditions, it has not addressed the higher costs faced by insurers.
|Included a Federal Invisible Risk Sharing Program, a pool of money set aside by the federal government to help insurance companies cover the high medical costs of specific individuals. |
Unlike risk pools used by insurers in the past because they would be unknown and thus “invisible” to the policyholders. This allowed high-risk individuals to pay the same as low-risk policyholders.
|Essential Benefits||All health insurance plans had to offer a range of essential benefits, such as preventative care, to be approved by the ACA.||Health insurance plans did not have to cover such essential health services if the state they operate in received a waiver from the federal government.|
Trumpcare And The Affordable Care Act – Main Similarities
|Key Similarities||Obamacare (ACA)||Trumpcare (AHCA)|
|Child dependents||Under the ACA, adult children can remain on their parent’s health insurance plan until the age of 26||Under the AHCA, adult children could also remain on their parent’s plan until age 26|
|Subsidies||The ACA introduced subsidies to help low-income individuals afford health insurance.||The AHCA also offered subsidies for low-income earners to afford medical insurance.|
|Designated enrollment period||Obamacare has a specific open enrollment period during which one can purchase a health plan||The AHCA also included a designated enrollment period to purchase a health plan|
|Special enrollment||If life events prevent enrollment at the specified time, one may qualify for a special enrollment.||As with the ACA, the AHCA offered special enrollment periods for people affected by certain life events.|
Pros And Cons Of Trumpcare
Every bill has its pros and cons, as did the proposed Trumpcare bill.
Capitalizing on the public’s resistance to the individual mandate, Trumpcare seized the opportunity to do away with it. It also offered those parts of Obamacare in place today that so many people rely on – help for low-income earners and people with pre-existing conditions.
Help For Low-Income Earners
Even with affordable insurance available, many people struggle to pay the costs of their premiums. Like Obamacare later introduced with its subsidies, Trumpcare allowed health insurance subsidies to be made available to low-income earners.
No Denial Of Coverage For Pre-Existing Conditions
Again, Trumpcare offered something that Obamacare later introduced as part of the ACA. With no more discriminatory practices against people who had pre-existing conditions, they could enjoy access to health insurance coverage despite their long-standing ailments.
No Individual Mandates
Although the ACA was later amended to remove the individual mandate at the federal level, it caused a significant backlash when it was first introduced. The AHCA proposed to do away with individual mandates, which boosted support for Trump’s proposals.
Several common criticisms and concerns were associated with the series of efforts to repeal, replace, or modify the Affordable Care Act (ACA).
Trumpcare And Employer-Sponsored Insurance
One of the biggest cons of Trumpcare was related to employer-sponsored insurance. Under Trumpcare, U.S. states and employers could opt out of Obamacare’s limits on out-of-pocket costs.
This would have far-reaching consequences because almost half of Americans receive health insurance through their employer. It would affect many millions of Americans’ household budgets.
Trumpcare And Medicare
Trumpcare did not threaten the existence of Medicare itself. However, the AHCA would repeal an essential tax on high-income Americans that funds Medicare.
In addition, The drug industry fee, whose revenue is dedicated to Medicare Part B, would have been eliminated under the AHCA bill. This would necessitate raising the program’s premiums drastically.
Trumpcare And Medicaid
One of the ACA’s main goals was expanding Medicaid. The AHCA would roll this back. TrumpCare also intended to cap federal Medicaid funding in every state.
The side effect of these proposed changes was the healthcare security Medicaid provided to millions of Americans would now be in jeopardy. Because of changes proposed by Trumpcare, every new Medicaid enrollee would suffer limited coverage and benefits.
Eligibility Requirements For Trumpcare
Under Trumpcare, average Americans with relatively good incomes could continue to gain access to good health insurance.
However, eligibility requirements for Medicaid would have changed considerably. Some groups would have to be working to be eligible for Medicaid.
States would have been able to limit enrollment on the program of non-elderly applicants, putting those whose income was equal to a maximum of 138% of the FPL.
Trumpcare coverage would not have reached as many Americans as Obamacare coverage.
- The initial Obamacare individual mandate spurred many uninsured people to get the health coverage they and their families needed. But it was later repealed.
- Medicaid expansion ensured that many low-income earners, especially older adults, had access to good medical care and coverage. With the expansion rollback and funding cuts proposed by Trumpcare, the most vulnerable members of American society would be at risk.
- Likewise, funding cuts proposed by Trumpacre in respect of Medicare would force the program into financial distress and raise premiums for those who could least afford it.
- Because they no longer had to limit their employee’s out-of-pocket costs, employers could take advantage of this loophole under Trumpcare. Many Americans rely on employer-sponsored health insurance. This would have meant fewer of them could enjoy the full benefits of it due to financial constraints caused by these out-of-pocket costs.
- Because Trumpcare allowed states to waive the essential health benefits requirement, insurers could get away with offering less coverage for things like screenings and preventive care. This meant that fewer illnesses would be detected early.
Trumpcare Vs. Obamacare – Which Is Better?
Every new Administration brings changes, and healthcare is usually one of the hottest debate topics. It’s a pattern that we see over and over again. Even President Biden’s Administration has affected healthcare with its ideas about the ACA.
But Trumpcare would have effectively replaced Obamacare. It would have brought changes that would majorly impact US health insurance as we currently know it. The wide range of coverage enjoyed today would not likely have been a reality under Trumpcare.
However, these changes to US health insurance never came to pass, and Obamacare is still active today. Although not perfect, the ACA has encouraged higher-than-ever rates of insured people. It has also allowed various coverage options on the ACA marketplace.
Luckily, it’s also easy to sign up for ACA-approved health insurance and reap all the benefits. To enroll in Obamacare, you only have to meet the following requirements.
- Be 18 years old or above
- You must be a US citizen or legal resident/lawfully present individual
- Not incarcerated at the time of application
- Not be covered by Medicaid
- Not covered by a spouse or parent’s health plan or employer-sponsored plan
How To Sign Up For Obamacare
You can choose a plan and sign up on the dedicated ACA platform at healthcare.gov, on one of the many state-based health insurance exchanges, or through a trusted ACA-compliant insurance broker like Enhance Health.
Even if you are unemployed or earn a very low income, there’s a plan that’s just right for you. With Obamacare, you get to enjoy subsidies to help with the cost of insurance, just like Trumpcare would have offered.
But you’ll also enjoy other benefits that Trumpcare didn’t offer, like the guaranteed ten essential health benefits covered with every ACA plan.
This comparison of Trumpcare (AHCA) vs. Obamacare (ACA) clearly shows that although there are several similarities, the differences are significant. Trumpcare had pros and cons. But the people bearing the brunt of the cons would be those who need health insurance the most.
With our finger on the pulse of the healthcare insurance industry, Enhance Health aims to provide an understanding of the considerations you must make when choosing the right insurance plan for your needs.
If you want more information on ACA health insurance plans or need help choosing the right one, contact us today.
Our expert insights into the broader healthcare policy landscape will help you make informed decisions about your health and well-being. We’ve helped countless Americans get the coverage they need at a price they can afford. Let us do the same for you.