One of the central themes of Donald Trump’s presidential campaign was the repeal of the Affordable Care Act, more popularly known as Obamacare, and with his administration in place, it appears that President Trump will follow through on his promise. He has already installed a staunch anti-Obamacare critic Tom Price as Secretary of Health and Human Services, and signed an executive order that undermines the Individual Mandate, the requirement that Americans with a certain level of income must obtain health coverage or pay a penalty.

While much of the country has opposed the Affordable Care Act—a Kaiser Family Foundation poll in November 2016 found that 45 percent disliked it, while 43 percent supported it—there is little doubt that the law has had a significant impact on health care in America. More than 16.2 million Americans obtained health insurance between 2013 and 2015, primarily through the government subsidized insurance marketplaces or expanded Medicaid programs.

Short Term Changes

With President Trump only taking office in the past few weeks and the glacial pace that Congress operates, there are almost no immediate changes to Obamacare.  In general, most health care analysts believe that the government will take at least a year to design, draft and approve a repeal of ACA—and it could take even longer to create a replacement insurance framework. 

President Trump has signaled his commitment to repealing the law with his executive order that formally stated the administration would seek a prompt repeal of ACA, but it also stated that it would maintain the law in the meanwhile. The order also authorized federal agencies to desist from enforcing laws like the Individual Mandate that impose a financial burden on taxpayers. State governments are also empowered to be more flexible about health insurance markets, while insurers may now sell policies in more than a single state.

An executive order requires Congressional approval to be enforced, but with Republican majorities in both houses of Congress, there is a good chance that this order will eventually become enforced.  In the meantime, it signals to the minority party and the American people that President Trump is fully committed to repealing Obamacare.

Eventual Repeal

It remains unclear what a repeal of Obamacare would actually look like.  With so many millions of Americans covered through the ACA health insurance marketplaces, there is considerable pressure on the administration to replace ACA with a comparable law.  This transition to a new health insurance framework poses the greatest challenges for the new president; not only will he have to maintain coverage for those presently enrolled through ACA, he will want a changeover that is not massively disruptive.

Congressional leaders are well aware of the potential pitfalls of a botched replacement program, so they are proceeding with some caution.  They have reaffirmed that any replacement program will allow more people to obtain health insurance and at more affordable rates, but there is little consensus on the details of a new health insurance law.  Some House officials have said that they would like to substitute insurance subsidies with tax credits.

Unfortunately, there are some large philosophical divisions in the Republican party.  While many moderates are unlikely to support a rollback of the Medicaid expansions, many more conservative party members are averse to tax credit programs that would, in their opinion, create another huge entitlement program.

While both the President and Congress are working on legislative proposals, Trump has repeatedly said that he wants a repeal and replacement nearly simultaneously. He has stated in the past that he supports tax credits, but without a formal proposal from the President, it is difficult to determine if this is a major sticking point or not.

The next few weeks should help clarify the general agenda for the major political players.  President Trump recently announced he would unveil his plan in a couple of weeks, while House Speaker Paul Ryan would submit his proposal along with the Senate’s plan—from Susan Collins, Rrand Paul, and Bill Cassidy—sometime afterwards.

How to Prepare for the Post-Obamacare Era

It appears that Obamacare is approaching its terminus, so you should expect some big changes if you are insured through the current marketplaces. From the rhetoric of President Trump and Congressional leaders, there will almost certainly be some kind of replacement program that will allow at least some of the 11 million Obamacare enrollees to maintain health coverage.

In one recent Congressional proposal, there were tax credits available to taxpayers according to their age instead of government subsidies based on income under the Affordable Care Act.  For those under age 30, they were granted $2,000 annually to pay for health insurance premiums, while those between age 60 and 64 were allowed $4,000 in annual tax credits.  This new system would favor younger Americans who pay far less for their insurance. Seniors, however, would still have Medicare to serve as their primary insurance.

While this new framework would put those with less income at a disadvantage, it would help the overlooked middle class. For many households with income higher than 400 percent of the poverty threshold, they could not qualify for subsidized plans.  Under this new tax regime, these middle income families would receive assistance through tax credits in purchasing plans.

If you are covered under your expanded state Medicaid program, it is in your best interest to remain enrolled.  Under the new Congressional proposal, those who remain enrolled would continue to get federal financial assistance, but new enrollees would only get such assistance through 2020. So if you leave Medicaid, try to sign up again before the 2020 deadline.

There is good news for Obamacare enrollees with pre-existing health conditions. Republican leaders intend to prohibit insurers from discriminating against ill enrollees.  Unlike under ACA which financed these high risk enrollees through the Individual Mandate, the GOP plan would give states more than $100 billion to help cover costs. States could the develop their own way of financing the high cost of providing care to the health-compromised.