When there is a transfer of power, especially presidential power, from one party to another in the United States, the first questions generally revolve around what the new president or controlling party will do about the laws, reforms, and regulations passed by the previous president or party. These questions are especially potent when dealing with controversial or even failing reforms. During the transition from President Barack Obama to President Donald Trump, one of the main questions on Americans’ minds is the next step for the Affordable Care Act (ACA), also known as Obamacare.
In 2010, President Obama signed the Affordable Care Act into law, which brought forth many changes to the United States healthcare system. The goal of the law was to provide affordable, comprehensive, and equal coverage for all Americans; however, most Republicans and some Democrats opposed key portions of the ACA. One major challenge to the ACA was the Independent Business Federation lawsuit against key provisions of the act, including the fine for those who do not have healthcare coverage. The Court ruled in favor of the law, stating that the fine was a tax permitted under the constitutional power of Congress to levy taxes. This ruling upheld key portions of the ACA and essentially ensured that the law would not be completely struck down through constitutional challenge. Other major challenges to the law have been the Hobby Lobby and Little Sisters of the Poor lawsuits against the Obama administration regarding the contraceptive and abortion coverage mandates, which initially did not provide meaningful ways for religious employers, whether nonprofit or for-profit, to invoke religious freedom and moral privilege in order to avoid covering birth control under their employee health insurance plans. Hobby Lobby won its case while the Little Sisters essentially won their case when the Supreme Court unanimously voted to order lower courts to provide accommodation for the Little Sisters’ moral opposition.
Outside of constitutional challenges, the ACA has had numerous economic and logistical challenges since its inception. The healthcare.gov website infamously had technical problems after its launch in the months leading up to the implementation of the mandate in January of 2014, which caused concern and criticism from both Republicans and Democrats. Furthermore, in 2015, Senator Marco Rubio pushed for and inserted a crucial provision into a Senate spending bill that reduced the ability of the federal government to bailout healthcare companies that lost money in the ACA exchanges. These bailouts were known as “risk corridors” and allowed companies to lose money by offering low cost plans and have the shortfall made up by federal taxpayers. The removal of risk corridors caused many healthcare companies to pull out of ACA exchanges and caused a major tangle for the law.
Average Americans are feeling the heat of health insurance reform, too. According to a report by Freedom Partners, insurance premiums have risen by about 28% between 2009 and 2014. This increase is much, much higher than wages rose in that time, and premiums have continued to increase since this report was released in 2015. In 2017, premiums are expected to rise an average of 25%, the largest increase in history. Some scholars attribute this rise in health care costs directly to the ACA, which they consider poorly written and economically doomed to fail. So what’s next?
Throughout his 2016 campaign, Donald Trump campaigned against the ACA, promising to repeal and replace the failing law in its entirety, while still assuring working class Americans that they would be covered. President-elect Trump focused his campaign on attacking the job-killing and unaffordable qualities of the ACA that truly affect every working American, especially in Rust Belt states. Some argue that this strategy may have won him the election.
Since his victory, Trump has softened his approach to the ACA. He is reportedly considering keeping two major portions of the ACA: the mandate that insurers must cover those with preexisting conditions and the portion that allows young adults to remain on their parents’ plan until the age of 26. Despite uproar over softening of his position, Trump is possibly choosing to keep relatively popular portions of the law, specifically the preexisting condition mandate, and he is signaling willingness to compromise as president, which is crucial for success.
Furthermore, Donald Trump does not need a full repeal in order to weaken the ACA to an essentially useless law. Through executive power, he can weaken and even repeal many of the regulations that were crucial to keeping the ACA on semi-solid ground. This method would leave the framework of the ACA on the books without giving it any of the methods needed to enforce provisions such as the healthcare and contraceptive mandates. Trump could also simply use presidential veto power in order to defund the ACA, which would force both houses of Congress to act in order to provide healthcare options for millions of Americans. These methods are crucial because a full repeal may be impossible because the Republicans do not have a 60 vote, filibuster-proof majority in the Senate.
Although Mr. Trump will have a major hand in the drafting of any new healthcare law designed to replace the ACA, the law will be officially drafted and passed by the Republican majorities in both houses of Congress. In June, House Speaker Paul Ryan unveiled the “Better Way” ACA replacement plan from the House GOP, which provides a clear outline of what Republicans envision the country post-ACA. Ryan’s plan, similar to President-elect Trump’s, places high reliance on healthcare savings plans and high-deductible insurance plans specifically available for young, healthy Americans. Furthermore, Ryan’s plan removes the mandate to buy health insurance, instead encouraging insurance companies to compete for the business of healthcare consumers. Finally, Speaker Ryan’s plan offers a tax break for individuals who do not receive healthcare from their employer in order to make healthcare more affordable; a key difference from the ACA is that this tax break is available for usage in the free market as opposed to purchasing through an Obamacare exchange.
During the campaign, one of the major tenets of Mr. Trump’s ACA replacement was the removal of state boundaries regarding the sale of healthcare, opening up competition for health insurance across the states in order to create a more favorable and competitive free market for consumers. Speaker Ryan’s replacement plan also offers the ability to remove the lines around the states in order to lift the monopoly of the Obamacare exchange in states where only one insurer has opted into the exchange. This is a crucial area in which both Trump and Ryan agree and will most likely feature in any replacement plan that the two leaders draft together.
Regardless of the final process or shape of the “repeal and replace” plan that Donald Trump and other Republican leaders have proposed, it is certain that the health insurance industry will look very different four years from now if Donald Trump is able to implement any of his promised campaign policies. Everyday Americans will have to be the final judges of whether those policies are successful for improvement and affordability of the healthcare industry.
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