Republicans in Congress are having a hard time selling the American Health Care Act of 2017, a bill that purportedly aims to eliminate the Affordable Care Act implemented under the administration of former President Barack Obama. The new healthcare bill, which is being called Trumpcare and Ryancare, does not bode well for millions of Americans who were previously not covered by health insurance policies, and it may end up creating higher premiums.
The main problem with Trumpcare is its intent: the proposal seeks to undermine Obamacare for purely political reasons. As a result, the bill is a mess just like other policies enacted and formulated by the Trump administration have been. Ostensibly, the proposal aims to address one specific problem with Obamacare that has caused instability of insurance markets. Since Obamacare prohibits insurance companies from declining coverage to Americans who have pre-existing health conditions, insurers are now forced to sign up patients who may already suffer from cancer, diabetes, cardiac ailments, and other conditions that are expensive to manage.
It is no secret that many Americans choose to forego health insurance policies until they feel that they are very sick; in the insurance world, this situation is known as adverse selection. When insurance companies are plagued by adverse selection, they may choose to exit certain markets, thereby reducing the available options.
Higher premiums have already affected Obamacare, and Republicans pushing Trumpcare believe that they have a magic pill to cure this ailment, which mostly affects insurance companies used to making piles of money. One strange Trumpcare provision allows Americans to go uninsured year after year without fear of annual penalties assessed when they file their taxes. Trumpcare would impose another type of penalty: 30 percent if individuals spend at least 63 days without a health insurance policy. The fine would be collected by the insurance company when the patient finally gets around to shopping for a new policy.
With Obamacare, an American worker whose income is below 300 percent of the poverty level currently pays less than $700 a year for a health insurance plan. Under Trumpcare, she would pay as much as $1,169 for a Silver Plan if she is assessed the continuous enrollment penalty. As can be expected, working class Americans are the most likely to go without insurance for extended periods, and thus the most likely to pay these penalties.
In the end, Trumpcare is falling way short of expectations, and even senior Republicans in Congress are calling on the bill to be sent back to the drawing board.