Image source: Getty Images.
In a little more than five weeks, American voters will head to the polls to determine who will lead the United States for the next four years. Regardless of whether the American public chooses Hillary Clinton or Donald Trump, the result will be historic, because our next president will be either the first woman in the Oval Office or a businessman with no background in public or military service.
Obamacare will be a major issue this election
The upcoming presidential debates should help the American public better understand each candidate's positions. However, there's one issue on which Trump's and Clinton's stances are perfectly clear: the future of Obamacare, officially known as the Affordable Care Act.
Obamacare today may be just as polarizing as it was when President Obama signed it into law six and a half years ago. According to the Kaiser Family Foundation's Health Tracking Poll, which is taken on a near-monthly basis, you can count on two hands how many months the "favorable" views of Obamacare have outnumbered the "unfavorable."
Image source: Getty Images.
Many consumers are displeased because ACA-compliant plans are raising their premiums. And some have been forced to change plans or primary care physicians because of Obamacare's minimum essential benefit requirements.
On the other hand, Obamacare has also pushed the uninsured rate to the lowest levels on record. Based on the National Health Interview Survey, the uninsured rate in the U.S. dipped to 8.6% during the first quarter of 2016. There are 21.3 million fewer people uninsured today than there were in 2010.
Also, a recent study published in the Brookings Institution'sHealth Affairsshowed that even though substantial premium inflation is expected in 2017, Obamacare hasslowed the rise of premium prices. The authors credited the individual mandate and Advance Premium Tax Credit, which spurred enrollment and thus helped to broaden the risk pool for insurers.
As you can see, whether Obamacare is a success or a failure is up for debate.
So which side of this debate do our presidential candidates stand on?
Image source: Flickr user Nathaniel F.
Hillary Clinton on Obamacare
If she reaches the Oval Office,Democratic presidential candidate Hillary Clinton plans to keep Obamacare firmly in place and "build on its successes." In particular, Clinton outlines five key areas that she plans to focus on to make the ACA more effective.
1. Prescription drug reform: For starters, Clinton has been campaigning for more than a year now about prescription drug reform. In both 2014 and 2015 prescription drug inflation increased by more than 10%, and Clinton believes that slowing prescription drug inflation could strongly lower healthcare costs. Her proposed solutions include reducing the length of time branded drugs are protected by patents, as well as creating a federal task force to act as a watchdog for drugmakers seeking excessive price hikes.
2. Incentivize Medicaid expansion:Nineteen states have chosen not to expand their Medicaid programs, and Clinton would attempt to incentivize them to do so. This would make millions of lower-income Americans eligible for Medicaid (those earning up to 138% of the federal poverty level), which would likely reduce the uninsured rate even further.
Image source: Flickr user neverbutterfly.
3. Focus on rural America: Hillary Clinton wants to focus on rural America, too. Rural Americans, who have more limited access to healthcare, often pay higher insurance premiums. Clinton would explore options that could include rural health clinics and federally qualified health centers, along with additional subsidies that would make healthcare more affordable for rural Americans.
4. Double community health center spending: Fourth, Clinton aims to double spending at community health centers across the U.S. and nearly triple the size of the National Health Service Corps, which offers loan repayment and scholarships to doctors and students who provide medical services in underserved communities.
5. Support women's reproductive care: Lastly, just as Clinton planned to support women with her Social Security initiatives, she's fighting to ensure that women have access to reproductive care.
Would these proposals work? While that's up to the public to decide, the biggest concern with Clinton's proposals is funding. Doubling community health center spending, increasing tax subsidies for rural Americans and low-income individuals and families, and further incentivizing Medicaid expansion could cost a pretty penny.
Though Obamacare's decade-long cost estimates have fallen from the Congressional Budget Office's first projections prior to Obamacare's launch on Jan. 1, 2014, it could be tough for Clinton to find the funding needed to make these proposals come to fruition.
Image source: Flickr user Ninian Reid.
Donald Trump on Obamacare
On the other hand, Republican presidential candidate Donald Trump released a seven-point plan back in March that would first and foremost repeal Obamacare completely. Beyond simply repealing Obamacare (which is the first point in his healthcare plan), Trump has planned six additional points that he believes will improve healthcare in the United States.
1. Allow the sale of health insurance across state lines: Following Obamacare's repeal, Trump would allow insurers to market their plans across state lines. Doing so would presumably increase competition between insurers, thus lowering premium inflation, and it would give rural Americans access to more affordable healthcare options.
2. Full health-premium tax deductions for individuals: Trump's plan also entails allowing individuals to, like a corporation, take a full deduction of their healthcare premiums when filing their tax return. Knowing a large deduction was coming by Tax Day could encourage consumers to enroll.
3. Allow for HSA use:Trump's healthcare plan also encourages the use of Health Savings Accounts, or HSAs, though he hasn't expounded on what changes he'd make to the existing HSA contribution limits, if any. In order to contribute to an HSA, consumers need to be enrolled in ahigh-deductible health plan, and they can't be claimed as a dependent by anyone else or enrolled in Medicare. Withdrawals from an HSA are allowed at any age for qualifying medical care on a tax-free, penalty-free basis. Trump's plan also entails, upon death, allowing the money in an HSA to be passed to the deceased's heirs.
Image source: Flickr user Evan Guest.
4. Require more price transparency from insurers: Additionally, Trump is calling for improved pricing transparency from health insurers, which is somewhat similar to what Obamacare's marketplace exchanges offer consumers.
5. Give Medicaid block grants to the states: Fifth, Trump believes the federal government should give states Medicaid block grants that they could spend as they see fit, rather than controlling how states use their Medicaid grant money. The idea is that state and local governments have a better understanding of which programs need funding in their state than the federal government does, so there would presumably be less waste.
6. Remove barriers to entry into free markets for overseas drug providers: Finally, Trump wants to break down the barriers that prohibit American consumers from purchasing cheaper pharmaceutical products in overseas markets, such as Canada.
There are two main concerns with Trump's healthcare reforms. First, there are no provisions guaranteeing that consumers with pre-existing conditions will be accepted by insurers, which could cause the uninsured rate to balloon. Second, the health-premium tax deduction seems to favor the wealthy. Because deductions are based solely on what a consumer pays for healthcare each year, those who chose more comprehensive and expensive plans would see a greater deduction than consumers who could only afford low-end plans. In other words, it's a regressive tax deduction.
Whose plan do you believe is better for America?
A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.
Sean Williamshas no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen nameTMFUltraLong, and check him out on Twitter, where he goes by the handle@TMFUltraLong.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.