Liabilities of America’s new health care

President Donald Trump’s reconstruction of Obamacare leaves several in disagreement of its benefits

“TRUMPCARE” — US House Majority Leader Kevin McCarthy, US House Speaker Paul Ryan and US Representative Greg Walden held a news conference on the American Health Care Act on Capitol Hill in Washington D.C. (Reuters)

In an ideal world, generosity would be the backbone of America. People would work and strive toward their highest potential, the poor would be humble and thankful and the rich would share their wealth with no governmental force. People would support the less unfortunate in a laissez-faire, hands-off approach if they actually had interest in the well-being of others instead of their membership subscriptions with Amazon.

With this being said, America’s health care may never find an efficient and powerful balance. The country remains divided as people either lean toward left-winged objectives or right-winged. Once Obama’s term ended, President Donald Trump immediately took his turn to introduce other approaches that will remove the Affordable Care Act, also known as Obamacare.

Everyone remembers Obamacare and all the hype it brought. It was a law that ensured that all Americans have access to affordable health insurance, mainly targeting small companies who do not provide health insurance and people who do not own insurance. The policy implemented this by providing tax credits, or consumer discounts, on government-sponsored health insurance plans. Obamacare also expanded the Medicaid assistance program to make health care cheaper.

Obamacare banned insurance companies from denying health coverage to people with pre-existing health conditions. This health care accepted anyone for any reason with the hope of subsidized costs. Also, young adults could remain under their parents’ plans until age 26, and expanded eligibility for Medicaid for the poor.

Obamacare was divided into four plans leveling from Bronze, Silver, Gold and Platinum, that determined the prices and cost-sharing percentages. The tactic was to choose the best plan that met an individual’s needs, held the desired doctors in his or her network and covered his or her drug prescriptions.

Many Americans disliked Obamacare from the start. Because of its complexity, people could not easily understand its insurance policies, let alone sign up. And although everything sounded too good to be true, Obamacare required several demanding conditions that needed to be met.
For instance, an individual could only receive discounts if the household income was in a range below the Federal Poverty Level. This Federal Poverty Level is a number that allows the government to determine the minimum amount of money needed for basic necessities.

For those whose income was slightly above the Federal Povery Level, especially the middle-income Americans, they had lesser options of receiving any discounts. The subsidies were not substantial enough, and the fines for not having coverage were too small to encourage enrollment in these plans. In return, insurance companies backed out from participating in Obamacare, since only a smaller sector of Americans had signed up.

Another issue with Obamacare was that it was required by law to have this insurance for those who met the certain income criteria. Other options included having Medicare or Medicaid or pay a penalty that will be charged on the tax return. Those who work in larger companies that provided their own benefits were able to avoid the Obamacare policies.

Several Americans even debated whether or not Obamacare was constitutional, although the Supreme Court ruling had claimed it to be.
Trump himself has claimed that Obama has not made significant impacts and only ruined the health care system in the U.S., as one of his well known campaigns was to remove Obamacare.

On Mar. 6, President Trump implemented his plan, calling it the American Health Care Act, by taking the first step to reconstruct America’s health care system with the goals to repeal and replace Obamacare.

So what does Trump mean when he claims to “repeal” and “replace?” Many republicans actually intend on a “partial repeal” since there are some elements of Obamacare that they want to keep.

This replacement will likely use the same sources of revenue, like reduced spending on private Medicare lanes, and will allow young adults to stay on their parents’ plans until age 26. It will still require no discrimination for pre-existing conditions, but insurers may set their own prices. Examples include charging more for people who are recently uninsured, although there may be higher charge rates for people with a lapse in coverage. This new plan still keeps a tax credit system for people to buy insurance, but it changes depending on age and income, as it uses the market rather than government policies.

Trump’s health care plan differs from Obama care for the central reason of removing the requirement to buy insurance. Individuals and larger companies will not be penalized through taxing or fines if they do not own or offer insurance. There will be no more limits on healthcare savings, allowing Americans to save in a healthcare savings account, whereas Obamacare placed limits on it. Trump intends to cut funding for Planned Parenthood, which normally receives federal funding to provide abortions, contraception and cancer screening. Taxes from the 2010 health care law will be repealed, including taxes on prescription drugs, over-the-counter medications, health-insurance premiums and medical devices.

Trump’s plan will offer the catastrophic policies, providing insurance for those needing immediate medical care, whereas Obamacare had covered basic care without exclusions. However, Trump’s plan will end the essential benefits for some in Medicaid, encouraging more limited policies to only cover cases of major illness or injury. In addition, new enrollment in Medicaid will freeze in 2020, so until then, Medicaid may experience a burst of expansion in the next few years until it will close.

With everything that Trump will include, democrats are not the only ones upset about Trump’s plan. Several conservatives argue that this bill will be too similar to the Obamacare that it is meant to replace. Meanwhile, democrats claim that this is just another republican plan to favor the wealthy, leaving the rest of millions stripped away from insurance.

While Trump’s plan would offer tax credits based on income and age, the net effect would be a decrease in federal subsidies. Those who would be affected are older people with lower incomes living in rural areas, such as the general demographics for Trump’s voters. Rural communities tend to have fewer insurers with less competition, giving insurance companies the freedom to charge their prices, resulting in higher premium rates.

Many doctors and providers claim that this bill would probably lead to patients losing their insurance. In addition, it could raise costs of healthcare, since the affordability of the tax structure and proposed major changes in Medicaid financing.

While the House GOP is still arranging further details, they stay “committed to repealing Obamacare and replacing it with fiscally responsible policies that restore the free market and protect taxpayers.”
So what does it take to make an ideal health care system? Solving this problem requires transferring the decision power from large and impersonal bureaucracies to the individuals. The ideal health care system needs to avoid the political umbrella to optimize the well-being of everyone. And instead, if health care becomes a market based on decisions, individuals can accept the benefits of their good decisions and bear the costs of their bad ones.

If the health care system was established as a market, patients would be the principal buyers as they chose their options, compare prices and make decisions. Physicians would serve as the principal agent of patients, helping them make informed choices. Hospitals would become competitors in the business of health care delivery. They would compete for patients by improving quality and lowering price, although basic requirements and certifications will need to be met. Health insurance companies would specialize in the business of insurance by reimbursing policyholders in the case of conflicting or urgent health events.

And finally, the government would provide funds for health insurance premiums for those in need. The government would facilitate the insurance system encouraging private savings for small medical bills, private health insurers for large medical bills and life-long savings for medical needs for retirement. It would also encourage free and open competition in the markets for medical services and private health insurance.