Trumpcare: How to Kill a Dying Pig

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So today the House of Representatives voted to pass the American Health Care Act which most commentators have been referring to as Obamacare-lite. All but one Democratic congressman voted against it but they were joined by 19 Republican defectors. About half of those defectors voted “no” because the AHCA isn’t enough like Obamacare! The other half, led by Kentucky representative Thomas Massie, actually voted on principle. They campaigned on the promise that Obamacare would be repealed and since this bill doesn’t do that they refused to back it. Holy cow! There really are politicians who mean what they say!

Paul Ryan and the Donald will trumpet this as the fulfillment of their promise to repeal Obamacare but as you are about to learn it didn’t do that all. They just took the existing law and fiddled around the edges, much like painting a termite infested house to keep it from collapsing.

If the Senate passes this and Trump holds a grand signing ceremony to celebrate another way he is making America great again then the AHCA is certain to be renamed Trumpcare. The Obamacare disaster will then be owned by the Stupid Party.

But you don’t care about that. You want to know how this is going to affect you. So here goes:

If you are an employee of a big company with employer provided health insurance or on Medicare then you won’t notice much change at all, unless you are devotee of Democratic/Republican politics. If you are a Republican you will now find yourself having to defend the indefensible while you Democrats can rightfully criticize this horrible law. It’ll be a complete flip from the previous seven years.

But the rest of us will notice some changes.

A few of these changes are good. The godawful blatantly unconstitutional penaltax will be history. No longer will you have to pay a $1,000 (or $2,000 … or $3,000) fine because you were too selfish to hand over $10,000 to $20,000 in premiums to a bunch of crony-capitalist insurance companies. For many of us this is awesome news because we can now escape this horrible system. But this could come back to bite us all in the ass (you’ll see how at the end of this article).

The bill will also allow you to put more tax-free money into a Health Savings Account (HSA). Right now the estimate is that a family could put as much as $13,000 into one of these accounts next year. Also, most of the restrictions Obamacare placed on these accounts will be lifted so that you can use the money for things such as over-the-counter medications.

And the God-Squad will be happy that funding for Planned Parenthood is eliminated for 1 year. Praise the lord!

But there is a lot that is still the same, only the semantics have changed.

Millennials who discovered that a philosophy degree won’t even get you job at Piggly Wiggly can still stay on Mom and Dad’s insurance until they are 26.

All the ridiculous coverage requirements are still there. Guys, you are still going to have to pay for insurance that covers you in case you get pregnant, and gals, you will still need to get coverage in the event that you develop prostate cancer.

The Medicaid expansion will be left in place but the money will be given to the states to hand out as they see fit. This could be a bad thing or a good thing … most likely both.

And despite all the wailing and hand wringing by Nancy Wicked-witch-of-the-west Pelosi and Upchuck Schumer, the health insurance premium assistance/subsidies are still there. But they will be handled differently. Instead of the government paying your insurance company on your behalf you will apply for a “refundable” tax credit. Why is the word refundable in quotes? Because it doesn’t always mean what you think the word refund means. If your tax credit is less than the amount of income taxes you paid then you actually are getting a refund of some or all of your income taxes. But if the tax credit is more than what you paid in income taxes then the feds are taking money from someone else and giving it to you. That is not a refund. In fact, that is the definition of a subsidy. Nancy and Chuck … STFU!

And the gem that is causing Obamacare to slowly wither away is still in place – insurers must still sell insurance to those with pre-existing conditions at the same premium as a healthy person.

There are a bunch of other provisions that most of us won’t even notice but there is one more item that turns this bill into a nightmare … unless you’re like me and find big government programs to be expensive and inefficient disasters … in which case you will find this whole fiasco to be hilarious.

That item is the individual mandate to buy insurance. It is still there but Paul Ryan and his idiot henchman have made the penalty for not buying insurance so weak that it is almost meaningless.

As I stated above, the penaltax is gone. So what is the penalty for not complying with the mandate?

If you go without insurance for more than 62 days then your new insurance premiums will be jacked up by 30% for the next year.

I can hear some of you now – “Really? That’s it? So what? I can save more than enough money to cover the extra 30% by not having any insurance at all until I find out I need it.”

Exactly.

In fact, if you go without insurance for 4 months and then decide to get it again, you will be a little bit better off financially, even with the 30% penalty, than you would have been had you paid for uninterrupted insurance.

Bill Clinton said it best … This is crazy! Why would anyone buy health insurance?

If you can do 5th grade math you are going to figure this out rather quickly. When Trumpcare gets signed into law, don’t buy insurance until you need it. Stick tax-free money into an HSA and use that to cover emergency medical bills. If you find out you have cancer then you can buy insurance to treat your pre-existing condition. Unless you have an expensive illness, it makes no sense for you to needlessly pay thousands of dollars in premiums under Trumpcare.

This is far stupider than anything the Democrats did (I didn’t think it was possible).

Obamcare was already in a death spiral. This week all of the big health insurers pulled out of the state of Iowa. That left one small insurer to cover almost the entire state. Two days ago that insurer (Medica) intimated that they will also quit the state leaving zero (nil, zilch, nada) exchange health insurers for all but a few counties. The last health insurer in 16 Tennessee counties has declined to submit a 2018 rate proposal to the state, leading the state government to believe that these counties will also be without an exchange insurer. This is certain to happen in other parts of the country. People won’t be able to buy ANY insurance on the exchanges. Trumpcare will accelerate this problem.

Obamacare is repealing itself. Everyone knows this is the Democrats’ fault. If the Stupid Party had half a brain they would have let the Obamacare pig die a natural death. Then they could have come to the rescue with a free market plan when everyone was clamoring for a solution.

But noooooooo. Paul Ryan and his squad of short-bus Einsteins had to stick a bunch of feathers onto the Obamcare pig and tell us that it’s an eagle. In reality what the Republicans are doing is putting their name on the pig and hastening its death by applying leeches. Trumpcare will destroy the individual health insurance market in the US, the Democrats will regain control of Congress, and President Warren will sign government run single-payer health insurance into law in 2021.

It’s really hard to comprehend just how fucking stupid the Republican Party is.

But all is not lost, there is still a chance to fix this even if Trumpcare passes. An amendment to the bill would allow states to apply for a federal exemption from certain provisions of the law, most importantly the parts about coverage requirements and what insurance companies can charge for pre-existing conditions. If enough states get an exemption we may be able to kill Trumpcare before it kills the insurance market. Hopefully it will be enough to stave off the progressive single-payer wet dream.

Dear Rand Paul – when this bill hits the Senate please vote no. Save us from Trump, Ryan, and their band of merry idiots.

Wayne Middlesteadt is the author of Five Ways to Beat the Market and The Golden Age of Distance Running.

About Author

Wayne Middlesteadt

Wayne Middlesteadt is a 1986 graduate of Georgia Tech and has an MBA from Georgia State University. Currently working as a financial writer and track and field historian, his latest book is Five Ways To Beat The Market.

  • Recon5

    You lost me at “voted on principle” and therefore took action that leaves us with Obamacare as is, complete with penalties and lack of access for people to broke after paying their premiums to meet the deductible.
    This is why I’ll never be a libertarian. I never try to adjust reality to better fit my ideology. You are no different than Obama or the progs – you’re just the other side of the coin.

    • Wayne Middlesteadt

      They voted against a bill that doesn’t repeal Obamacare but barely changes it to make it look like the Republicans did something that they didn’t really do. This handful of Republicans want a bill that actually does get rid of Obamacare and they will vote for that. Thomas Massie has been very explicit about this. If you don’t understand this then I can’t help you.

      • Recon5

        Here’s what I understand, Wayne: we don’t have enough votes for a full repeal, and a partial repeal without a replacement or a repeal and delayed replacement leaves the pre-ex in place and removes the mandate, which eventually destroys the industry and everyone that depends it, so guess who then comes in to pick up those pieces after the libertarians “saved us” from those half-measures they castigate R’s for? It ain’t you.
        R’s are working with what is, not what they would like “is” to be.

        • Wayne Middlesteadt

          Maybe you should have read past the first paragraph because your stance and the disastrous consequences that will result for your party were addressed in the article. What the “working with what is” Republicans did with this bill was incredibly stupid.