Amid no shortage of controversy, the Affordable Care Act, also known as Obamacare, is apparently on its way out, with the American Health Care Act, also known as Trumpcare, set to take its place.
That after the AHCA legislation was passed by the U.S. House of Representatives on March 4, 2017.
Noting he was confident the bill would make it through the Senate, President Trump referred to Obamacare as "essentially dead" in statements made at the White House after the AHCA cleared the House.
"This is a great plan," Trump added. "I actually think it will get even better. This is a repeal and replace of Obamacare. Make no mistake about it."
The legislation that would change the face of health care in America - again - is expected to be taken up by the Senate in late spring or early summer.
That gives financial advisors some time to lay out a client blueprint for leveraging the AHCA, which should replace Obamacare, in some form, by the time the summer is out.
While it's no doubt early, some are ready to do just that.
"This is certainly a tricky discussion and one that's difficult to really have an honest discussion about," states Sierra Knight Magee, owner of Knight Magee Insurance, in Richmond, Va. "The problem is that at this stage, we only have an 'idea' of what is being proposed under TrumpCare."
That said, there are also some things consumers should know that go beyond the proposal stage. "We do know that instead of a subsidy under the ACA, TrumpCare is proposing a tax credit," Magee says. "The credit would vary based on age but not necessarily your health."
For example, two 30-year-olds may receive the same credit, but one may have preferred health insurance premiums, while the other is paying much more due to their pre-existing conditions, she explains. "Currently, the ACA does not rate based on pre-existing conditions," she says. "Trumpcare is promising that those with pre-existing conditions will not be denied, but do we know if they will be able to afford what's proposed to them?"
Adam M. Hyers, owner of Hyers and Associates, Inc., an insurance firm in Columbus, Ohio, agrees that it's early in the game, and the facts on the ground could change as the Senate takes up the AHCA.
"If this is a nine-inning game, we are maybe in the fourth or fifth inning," Hyers says.
But that doesn't mean advisors should ignore discussing the topic with clients.
Hyers says there are some changes to "like and dislike" about Trumpcare, but a lot of changes are still to take place in the Senate.
"The problem is my individual clients have had a lot of issues with Obamacare," he says. "Many have lost plans they liked, lost their doctors, seen their deductibles and out-of-pocket increase while also paying higher premiums. They want to see that change, but at what cost?"
To clarify the issue for both advisors and consumers, Hyers offers the following "point-counterpoint" on Obamacare versus Trumpcare:
Obamacare: Insurers can charge older Americans no more than three times the cost for younger Americans
Republican plan: Insurers can charge older Americans five times as much as younger Americans. States would also be able to set their own ratio.
"Many of my older clients can barely afford Obamacare as it is - especially if they don't get a tax credit," Hyers explains. "Trumpcare will have to drive rates down significantly in order for this to help those waiting for Medicare eligibility."
Obamacare: All Americans are required to have health insurance or pay a tax penalty.
Republican plan: The mandate is repealed, but individuals who forgo health insurance for more than 63 days must pay a 30% surcharge on their insurance premiums for a year.
"This will be interesting," he adds. "I do see a lot of consumers gaming the system, unfortunately. They buy insurance, have a knee or shoulder surgery, then drop it. Others were even moving states in order to get a Qualifying Life Event (QLE) as they waited to buy insurance until they needed it. The government has since cracked down on some of the QLE abuses."
Obamacare: Requires all insurance plans to cover certain health conditions and services, such as emergency room visits, cancer treatment, annual physical exams, prescription drug costs and mental health counseling.
Republican plan: Allows states to define what benefits are mandated or opt out of the requirement entirely.
"There are good and bad scenarios here," Hyers states. "Consumers and insurance agents are going to have to perform more due diligence when buying insurance. There are many who would prefer to have more bare-bones, catastrophic type plans in order to reduce premiums. This worked well before Obamacare so long as everyone understands what they are selling and buying."
Obamacare: Prohibits insurers from denying coverage or charging more to individuals who have pre-existing medical conditions.
Republican plan: States can let insurers charge as much as they like to sick people. The GOP plan allocates $8 billion to help subsidize those patients.
"I imagine this language will have to change in the Senate," he says. "The sick will get priced out and there will be outrage. Perhaps there will be certain levels as to how high the sick can be charged and/or subsidized. Those who have had no lapse in coverage should not be charged more in my opinion - that's one thing that makes Medicare work."
Overall, consumers need to understand that more responsibility for their own healthcare is being placed back on them, says Chris Orestis, executive vice president of GWG Life and a 20-year veteran of the insurance and long-term care industries. He also says the Trumpcare plan, like Obamacare, has its winners and losers.
"By eliminating mandates and the right care and instead giving consumers the freedom to choose, they are being given more responsibility to manage their own care and costs," Orestis says. "If you are lower income, less healthy or elderly expect costs to go up and protections against excluding many pre-existing conditions to disappear. If you are young, healthy or wealthy expect tax breaks and costs to come down with the elimination of mandates."
Editors' pick: Originally published May 12.