The Trump administration is steadily moving toward restructuring the federal healthcare law. Such an action comes as no surprise since President Trump has always been an outspoken critic of the Affordable Care Act, or ACA, popularly known as Obamacare.
Trump Alternative
In place of Obamacare, the Republican proposal called The American Healthcare Act (AHA) means to bring far-reaching changes. The alternative proposes radical changes like eliminating taxes mandated under Obamacare. The most controversial topic from the new Republican health draft is the phasing out of the Affordable Care Act’s Medicaid expansion. At the same time, it seeks to retain some of the existing legislation’s more popular provisions.
One can say the Republican alternative often termed as “Obamacare Lite” maintains the bare framework of the Affordable Care Act. However, the uncertainty over the source of costs accrued to the government has not yet been resolved. Also, the extent of the effect on varied sections of the society is not yet clear.
The Republican proposal seeks to change the mandatory requirement to purchase insurance with a system of penalties to be imposed by insurers. It also aims to replace subsidies with tax credits that are refundable. Also, the burden will be put more on the state level. Finally, all the taxes levied under Obamacare would be abolished. On the flip side, insurers will have to provide coverage to individuals regardless of any preexisting condition.
CBO Projection Painting a Different Story
In such a mixed scenario, a projection by the Congressional Budget Office (CBO) has added fuel to the debate. Per the projection, in a decade from now, approximately 24 million Americans would lose insurance coverage if the Obamacare replacement is passed. However, the CBO is also of the opinion that federal deficits would fall by $337 billion between 2017 and 2026 under the replacement bill.
Effect on Hospital Stocks
The foremost question that arises now is whether hospital stocks stand to gain or lose on Capitol Hill. Supporters for the Republican alternative argue that if the proposed changes are implemented, the sector would get paid for several services that earlier had to provide free of charge.
