What Replacing the Affordable Care Act Means — Pros and Cons

With the Trump Administration and Republican-controlled Congress working to replace the controversial Affordable Care Act (ACA) by 2018, there are plenty of opinions as to whether it’s a good thing or not. The ACA was passed in 2010 and took effect in 2014. It was designed as a way to ensure all Americans have access to quality, affordable healthcare by making health insurance mandatory. The plan featured Marketplace Exchanges where low-income people qualify for subsidies. It also expanded access to Medicaid; required insurance companies to make coverage available to everyone — even those with pre-existing conditions — and made free preventive services available to those who are covered. It’s estimated that 20 million Americans now have insurance coverage because of the ACA.

However, not everyone, is excited about the ACA and many would like to see it repealed and replaced. Proponents of repeal believe the federal government shouldn’t require individuals to purchase healthcare coverage. They are frustrated by the high premiums and high deductibles paid by those who can’t qualify for subsidies. Opponents of repeal are concerned it could mean severely reduced coverage to millions of Americans. Trump’s Plan President Donald Trump has a seven-point plan. He and Trump Republicans in Congress are working on the details. Their basic plan has two main components — the full repeal of the ACA, and replacing it with several new policies, and turning Medicaid into a block grant program.

Pros and Cons

Experts differ on whether repeal would be a good or bad thing. Here are some predictions on what could happen to some of the key points of the Affordable Care Act:

Employer-sponsored Insurance – Large companies would no longer be forced to provide health insurance to employees who work 30 or more hours. Although many people assume most employers would continue to do so since most people view coverage as a valuable benefit. There is concern that employees who work fewer than 30 hours a week will no longer be offered coverage. However, critics of the ACA believe many employers have skirted the rule by requiring part-time workers to clock less than 30 hours a week.

Health Savings Accounts – A Health Savings Account is a tax-free way to save money for healthcare expenses. Trump would like to expand access to this savings vehicle. As now structured, HSAs can only be used with high deductible plans, and the majority of people with insurance now do not have high deductible plans.

Interstate Insurance Sales – Trump and Republicans want to remove barriers preventing insurance companies from selling policies across state lines. They believe it will spur competition and lower costs. Opponents believe it won’t work because of the different regulations from state to state.

Medicaid Funding – The ACA expanded coverage from low-income children, pregnant women, parents, the disabled and elderly to include low-income adults. Instead, Trump’s healthcare plan would give each state a fixed amount of federal money in the form of a block grant to provide healthcare to low-income people on Medicaid. Opponents are worried that repealing the ACA and giving state governments responsibility for disbursing healthcare funds will leave millions of the poorest Americans without insurance.

Pre-existing Conditions – The ACA prohibits insurance companies from denying coverage to anyone – including people who have pre-existing conditions. This provision is widely supported. The problem is that in order to fund this feature nearly everyone who isn’t covered by Medicaid or Medicare must buy insurance. But if the mandate to buy insurance is repealed, many people, including those most in need of it, will not buy insurance until they absolutely need it. This kind of behavior drives up costs for everyone.

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