The Financial Pros and Cons of Repealing the Affordable Care Act

Walk into a room full of people and mention the Affordable Care Act and, before you can say “Obamacare,” you might hear more opinions and anecdotes than the hundreds of provisions in the act itself.

President Donald Trump based a large part of his election campaign on the promise to repeal and replace the healthcare program. Even before he took office, the U.S. House of Representatives and Senate set the stage for rolling back Obamacare by voting in a budget strategy allowing them to make major changes. President Trump promises to unveil a plan that provides “insurance for everybody” with lower premiums and deductibles, according to a Jan.11, 2017, news conference with the Washington Post.

With repeal still weeks away at a minimum, here’s a look at the top immediate financial impacts on your wallet should the Affordable Care Act get repealed before Congress can agree and sign “Trumpcare” into law.

Pro: The Choice to Opt Out

Under Obamacare, all individuals must carry health insurance. Based on the need for healthy people to pay equally into the healthcare insurance market, the provision keeps healthcare costs down for sick people who otherwise would not be able to afford insurance and treatment.

If Obamacare is repealed, each individual could decide whether they want to buy into healthcare insurance or pay their own healthcare costs on a cash basis. This is ideal for people who already pay out-of-pocket for complementary or alternative healthcare or young, healthy people with little to no medical costs.

Even with a $503 per month tax credit, a family of four making $51,853 per year — the median income according to the U.S. Census Bureau — can expect to pay a minimum of $86.16 a month for insurance they won’t even use after a $503 per month tax credit.

Pro: More Choices, More Savings

Repealing Obamacare lets each patient shop for plans with benefits that most closely fit their needs. Although states like California, Massachusetts and New York have five or more exchange carriers to choose from, healthcare exchange providers continue to pull out of the Obamacare market. Five states have only one carrier that offers coverage across all counties, leaving 18 percent of  U.S. citizens with no choice.

President Trump’s vision for healthcare would let individuals shop for insurance across state lines, creating a strong national exchange with plenty of individual choices. One version of a Trumpcare plan promoted by Sen. Rand Paul of Kentucky allows individuals and business with few workers to create associations for maximum bargaining power.

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Con: Cost of Lost Coverage for the Sick

Without healthy people paying into the healthcare system, insurance companies must raise rates for sick individuals to keep healthcare profitable. In many instances, patients undergoing treatment for serious health conditions would no longer be able to afford to continued treatment.

Monthly insurance costs for the fictional family of four could be as low as $433 monthly for a plan that has a $0 deductible if someone needs regular treatment and medications. Compared to $10,000 or more for a single course of chemotherapy, repealing the Affordable Care Act could leave sick patients and their family having to choose between imminent death or financial ruin.

Con: Cost of Lost Coverage for Young Adults

Under Obamacare, young adults can stay on their parents’ coverage until age 26. This age group could end up losing coverage should insurance companies revert to removing young adults from their parents’ policies when they reach age 18 or 21.

College age kids typically enter the workforce as part-time employees, retail clerks or workers in the hospitality and restaurant industries making minimum wage with no insurance provided. A college student working a 25-hour work week at $10 per hour would have a gross income of only $13,000. Although Medicaid or college-based insurance can be a possibility for some, many would need to resort to medically underwritten health insurance if the AFA gets repealed, leaving Mom and Dad to pick up the cost.

Up Next: 5 Things Obamacare Got Right — and 5 Things That Need to Be Fixed