Donald Trump’s presidency promises to bring major economic changes to the country and one of the key issues that many advisors and clients are worried about is the future of the Affordable Care Act, commonly referred to as Obamacare. Trump has stated that he intends to repeal this program and has nominated to his cabinet someone who many describe as the perfect person for the task.
House Budget Committee Chairman Tom Price (R.-Ga.), Trump's nominee for secretary of the Health and Human Services Department, has long stated that he thinks that the government shouldn't be in charge of healthcare and has gone so far as to propose legislation to limit Washington's influence over healthcare policy.
The 20 million people who are covered under the Affordable Care Act are now left to wait and see what actions Trump will take in this area. The program has been lauded for increasing the number of people who have health insurance and has also been panned for rising healthcare premiums. (For more, see: How Obamacare Can Be Repealed.)
An Uncertain Future
Trump has yet to state his formal plan of action but has said he'd like to keep some of Obamacare's more popular features, leading to some confusion. This is a major cause of concern for some advisors and their clients who are unsure of what the future holds for their healthcare plan. Jude Boudreaux, founder of Upperline Financial Planning, told InvestmentNews that he covers his own family along with one of his full-time employees under Obamacare and he’s not certain that he will still be able to carry coverage under another plan. “My oldest daughter was billed more than $1.1 million for care during the two years she was treated for leukemia, and she would be an uninsurable risk if certain provisions of Obamacare were ever repealed.”
Trump has stated that there are some aspects of the Affordable Care Act that he likes, such as requiring coverage for preexisting conditions and the option for parents to cover children under their healthcare plans until age 26. But it is not clear just how these factors would survive under a different type of plan, as their means of funding would be revoked. Trump will also need Congressional approval to accomplish his plans, which may be possible now that the Republicans control both the House and the Senate. Obamacare will most likely remain in effect for 2017, but it’s anyone’s guess what will happen after that at this point. (For more, see: The Evolution of Obamacare Since Its Inception.)
Many financial advisors have helped their clients to qualify for additional assistance from Obamacare with the use of prudent income-planning strategies, but this financial assistance may disappear with the changes that Trump has promised. It seems fairly certain that the cost of coverage will most likely change, with premiums for those who are healthy going down and rising for those with health conditions.
Clients who have retired in the past few years and are not 65 years old may be especially vulnerable to any changes that are made, as they may be forced to choose between going without coverage or returning to the workforce. Some financial advisors are counseling their clients to sign up for 2017 coverage, even if the premiums are much higher than last year’s. They are also telling those clients to focus on preventive care and deal with any outstanding health issues now. Some advisors are also optimistic that Trump’s plan will help to lower the cost of health insurance premiums.
The Bottom Line
Financial advisors and their clients will need to stay tuned to see what ultimately happens to Obamacare. Trump has not laid out any concrete plans at this point, but this will likely come soon give the background of his Health and Human Services Department nominee. Clients who are worried about whether they will still have coverage after Trump enacts his plan can get ahead of the game by dealing with health issues now and making the most use of their coverage while they have it. Those who believe that they will have to spend more on healthcare next year may want to start budgeting for that increase now, so that they will be prepared when higher costs hit. (For more, see: Obamacare Costs Up for 2017.)