Donald Trump and the Congressional Republicans have been hell-bent on Repealing “Obamacare,” (A/K/A The Affordable Care Act) either literally or figuratively. Although today’s Executive Order directly effects small businesses, as it pulls participants from Obamacare, the eventual effect will be to weaken it.
Early polls show that a majority of Americans, based on a poll sample, are leery of their intentions. Personally, I believe that the Order will face a severe Court attack, by a number of state Attorney’s General.
Let me suggest several key health insurance considerations:
1. Health insurance is something that you buy when you are healthy, so that you will be covered when you are sick or injured.
2. Just “having insurance” is not enough if it doesn’t cover a wide range of potential health problems.
3. Insurance companies set their premiums through an actuarial analysis of the “risk pool”—the demographics of the total number of plan participants. Such statistical analyses become more accurate as the pool size increases, thus reducing the wide swings in health problems covered, as well as the cost. Furthermore, premiums will also generally rise and fall as the demographics—average age and projected health—change.
As with any Trump policies, this Order has been wrapped in secrecy, and virtually devoid of specifics. But, based on assumptions by tax analysts, the following comments are relevant regarding what we know so far.
Small companies would be able to band together, forming “association health plans” throughout the country, and buy insurance outside of Obamacare. This would constitute a dual-tiered national health care plan, which could possibly add to the participants out-of-pocket expenses.
Association health plans would also permit the purchase of low-cost, limited, and short-term plans. Low cost, and limited, plans appear to take us back to the pre-Obamacare days, when coverage was quite limited—including maternity and mental health—and “pre-existing conditions” was often used to deny coverage.
Insurance, as noted earlier, should not be considered as a short-term investment. Yes, investment! Generally, when you buy any type of insurance, you are hoping that you will never have that serious injury or illness, auto wreck, house fire, etc. Accordingly, short-term health care plans are insane!
Tax-advantaged Health Savings Accounts are also included. HSAs have traditionally been available only to somewhat higher-paid employees, employed by corporations, and the money grew tax-free until used.
If the new association health plans pull participants out of Obamacare, they would generally be the younger and healthier workers, who might prefer the lower premiums, as compared to the consumer protection guarantees under Obamacare.
Donald Trump has been, little-by-little, weakening Obamacare and, then, blaming it for its own demise. So far, the American People are pleased with Obamacare and, hopefully, they will convey that message to their representatives in Congress!
NOTE: Aside from today’s Executive Order, Trump will also terminate the insurance subsidies—funded by health insurers—for low-income participants in Obamacare.