Obamacare 2.0: TrumpCare

The state of nationalized healthcare has been subject to debate within the United States most notably in the past decade. In the beginning, ideas that were flung “across the aisle” contended that either America needed a national healthcare initiative or that the sector should stay privatized. Now, the debate centers around what style of national healthcare should be implemented. As a result, Republicans have created a new style up for interpretation: the American Health Care Act (AHCA), also known as TrumpCare. In the wake of TrumpCare’s recent congressional failings, this article will serve as a guideline to what TrumpCare is, by itself and relative to ObamaCare, as well as to why it failed.

 

The biggest divergence from the ObamaCare system presented by the AHCA is the elimination of the individual mandate. When asked to explain the mandate portion of his idea for healthcare during a debate on January 28, 2008, Obama explained that the mandate was focused on “lowering costs.” Today, this is touted as the financial backbone of ObamaCare (and nationalized healthcare in America). Those who do not want healthcare must pay a tax penalty of 2.5% of household income or up to $2,085, whichever is higher.

As the lower and middle-class demographics in America have less disposable income than the upper-class, this means that the ObamaCare mandate disproportionately harms those lower and middle-class citizens who do not purchase health insurance (or subscribe to ObamaCare). TrumpCare would take away this mandate, removing that disproportionate coercive burden set in place by ObamaCare. As a result, economic sovereignty would have increased, particularly for the lower and middle-class, as these groups would have had the viable options to subscribe to health insurance or not.

However, the lack of a mandate also corrupts the financial backbone of national healthcare services. Without the mandate, insurance prices would rise temporarily in the short-run, the government would have to invest more into the program, or the system itself would collapse. President Trump chose the first option. While releasing the mandate would inherently give lower and middle-class citizens more options, the rise of insurance premiums in the short-run could also lead to more people becoming uninsured.

Another important aspect of TrumpCare is the restructuring of Medicaid funding. Under the ObamaCare system, the federal government matches dollar-for-dollar what the states invest into their own Medicaid programs. However, TrumpCare aimed to instead administer block-grants to states (meaning a limited fund) so that they may use it for their Medicaid program as seen fit. Under the TrumpCare block-grant initiative, state governments would be operating on a set funding amount which could reduce wasteful spending, fraud, and inefficiency.

TrumpCare also would have allowed individuals to deduct the total cost of insurance premiums from their tax returns. Under the ObamaCare system, only medical expenses beyond 10% of income were allowed to be written off as a tax deduction. This generally means that higher-income citizens would not be able to write off medical expenses as tax deductions, and lower and middle-class citizens could. However, under the TrumpCare system, everyone would be able to write off the total insurance premium cost as a tax deduction, but an important distinction must be drawn between writing off insurance premiums and writing off medical expenses. The ObamaCare text gives a way to write off medical expenses exceeding 10% of income, while the TrumpCare text allows everyone to write off the total cost of insurance premiums as a tax deduction. These policies do not inherently contradict each other, so the effect on the public would depend on whether TrumpCare served primarily as an amendment to ObamaCare or if Obamacare were completely repealed and replaced by TrumpCare. Since TrumpCare was withdrawn in Congress, it is impossible to tell what the ultimate outcome would have been.

Lastly, we can consider why TrumpCare failed. Establishment Republicans such as Ted Cruz and Marco Rubio hold the historically prevailing conservative idea that a national health care system is unsustainable. In addition to this prevailing idea, The House Freedom Caucus and other House members met with President Trump and Vice-President Pence at the White House before TrumpCare was to be voted on. Their demands were clear – cut essential health benefits. Representative Kinzinger (R-IL) gives insight as to how the meeting occurred. It seemed as though Trump had made ground with Republicans to find something sustainable enough to replace ObamaCare. However, Trump and the majority of House Republicans were not willing to cut health benefits to the extent that the Freedom Caucus required.

The Democrats have also recognized the incongruity of benefits to higher-income demographics rather than lower and middle-class citizens. Simply put, TrumpCare does not align with Trump’s self-proclaimed goal: “insurance for everybody.” The bill is not radical enough for a group that holds enough votes to stifle Republicans’ measures, and it was too radical for Democrats. TrumpCare, like President Trump himself, offered a moderate take on the increasingly polarized healthcare debate. Every plan, policy, and initiative will have winners and losers, and the perceptions that we, as Americans, have of these policies influence how we think of good or bad – it simply depends on who we want our winners to be. As a result, TrumpCare is simply a more moderate, winner-and-loser trade off version of ObamaCare that won’t allow either the Republicans or Democrats to realize the totality of benefits they would like to see.

 

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