Donald Trump's Presidency Heralds the End of Obamacare

by Charles Katebi

Last week marked the fourth and most likely the last year that the federal healthcare exchanges will sell insurance under the Affordable Care Act, aka Obamacare. That's because Republican Presidential-elect Donald Trump vows to repeal Obamacare during his first hundred days in office and jumpstart real healthcare reform.

At a speech in Gettysburg, Pennsylvania prior to Tuesday's election, Trump told a crowd of supporters:

"When we win on November 8, and elect a Republican Congress, we will be able to immediately repeal and replace Obamacare. I will ask Congress to convene a special session to repeal and replace."

It's hard to state how fundamentally consequential repealing Obamacare would be for healthcare in Wyoming. And as President with a Republican Congress, Trump has a clear path to do just that.

Repeal Obamacare

For starters, repealing Obamacare will end the law's cripplingly expensive "age rating" rules that penalize younger people with higher premiums simply because of their age. Under Obamacare, insurers are barred from charging individuals in their twenties and thirties less than 1/3 what they charge older subscribers. But since older individuals have six times higher healthcare costs, this mandate effectively doubles the premiums younger people pay for coverage.

Obamacare's repeal will also erase the law's mandated "essential health benefits" that require people to buy health plans that cover a smorgasbord of expensive treatments and services regardless of whether they're needed or desired. These mandatory benefits include maternity care, newborn care, as well as pediatric vision and dental care, even if someone doesn't have children. A survey of seventeen of the largest health insurers estimates that all of Obamacare's rules raised the cost of insurance by 180% percent for younger individuals.

Without these coverage and price control schemes in place, patients will be free to choose from a greater array of health coverage options to meet their medical and budgetary needs.

Expand Health Savings Accounts

But Trump's healthcare agenda goes beyond ending Obamacare. One of his proposals aims to finally end the original sin of American healthcare policy: the federal employer-sponsored health insurance tax subsidy.

Since World War II, the federal government has exempted employer-provided health benefits from income and payroll taxes, creating a huge incentive for businesses to provide health coverage to employees and decide how employees receive their healthcare. This arrangement effectively insulates workers from the cost of their healthcare, which allows providers to raise their prices safe in the knowledge that patients don't care how much they cost.

Rather than perpetuate this giant tax subsidy, Trump supports expanding Health Savings Accounts, or HSAs, as an alternative to our current employer-provided health insurance system. An HSA is a savings account that allows individuals to save for healthcare expenses on a tax-free basis independent of their employers.

But federal laws make it extremely difficult for individuals and families to use HSAs. Under current law, individuals can only deposit up to $3,400 and families can only deposit $6,750 into HSAs. HSAs holders are also mandated to purchase high deductible health plans which limits their appeal to sicker individuals and families with high cost healthcare needs.

Members of Congress offer Trump a way to make HSAs a true alternative to employer sponsored insurance. Rep. Dave Brat (R-VA) and Sen. Jeff Flake (R-AZ), recently introduced the "Health Savings Account Expansion Act."

This bill raises HSA contribution limits three fold, allowing individuals to deposit up to $9,000 and families to deposit up to $18,000 into HSA's to pay for health coverage. In addition, it lets individuals and families spend HSA-funds on over-the-counter medication, direct primary care, and health insurance premiums.

These reforms would offer American workers a choice: use health coverage their company chose, or take their health benefits as a direct financial contribution that they can spend on better coverage from the carrier of their choice, all tax-free.

Block Grant Medicaid

Perhaps most importantly, Trump supports block granting Medicaid and letting states tailor the program to take care of their unique low-income patient populations. Federal regulations mandate who Medicaid covers, the services they're entitled to, and how they receive services. These top-down mandates force states to spends enormous sums on wasteful and inefficient methods that divert resources away from actual healthcare.

One of these costly mandates is Medicaid's Institutional Care Program, or ICP.

Under ICP, Medicaid must provide long-term care services to elderly recipients through expensive nursing facilities. This is particularly expensive for Wyoming since we have the most expensive nursing homes of any state. On average, Wyoming's Medicaid program spends $32,199 per patient on long-term care, compared to $18,439 for the rest of the country. Some states like North Carolina spends just $10,518 on long-term care.

A far more cost-effective approach would provide long-term care directly in peoples' homes. Wyoming currently has a Long-Term Care Waiver and an Assisted Living Facility Waiver that offers elderly patients the option to receive long-term care service at home or assisted living facilities. Thanks to these waivers, Wyoming spends less than half on these patients than if they received their care through nursing facilities. If President-elect Trump block grants Medicaid, Wyoming could expand these waivers and provide all of their long-term care through home and assisted living locations.

None of these changes will be easy. They'll be fought tooth and nail by powerful vested interests that benefit from Obamacare at the expense of patients, doctors, and families. But for the first time in eight years, the country has a shot at real patient-centered healthcare reform.