Donald Trump suffered a stinging defeat in his young presidency when the longstanding Republican plan to repeal and replace Obamacare failed to garner enough GOP support in the House to even call for a vote.
Trump campaigned on the promise of repealing Obamacare, as have many Republican members of Congress ever since the health care law was passed seven years ago. But when push came to shove, conservatives could not agree on how to dismantle Obamacare.
“Obamacare is the law of the land,” House Speaker Paul Ryan said after pulling the replacement bill before it could be voted on.
The Obamacare repeal bill that was backed by Trump and House Republican leaders would have eliminated the so-called “individual mandate,” which fines people who don’t have health insurance.
The bill also would’ve reduced Medicaid spending and curtailed the subsidies for low-income families who purchase insurance through the exchanges.
Planned Parenthood also would’ve lost federal funding for abortions, but only for one year.
But rank-and-file House Republicans failed to rally around the Obamacare repeal bill, with the conservative Freedom Caucus calling for a more aggressive plan to repeal the healthcare law. While moderate Republicans expressed concerns over a recent report from the nonpartisan Congressional Budget Office, which claimed another 24 million people would lose their healthcare coverage by 2024 under the plan.
Ultimately, the bickering between Republicans over which parts of Obamacare to repeal, and which parts to leave in place, did more to save the health care law than Democrats could have hoped for on their own.
Trump waved the white flag Friday afternoon, in a show of frustration toward his own party, signaling he lost patience with Republicans and will waste no more time on efforts to repeal Obamacare.
It’s possible Trump could take another shot at repealing Obamacare down the road, but for now the president is expected to turn his attention to other priorities like the budget, tax reform, cracking down on illegal immigration, and building a wall between the United States and Mexico.
“The best thing we can do, politically speaking, is let Obamacare explode” on its own, Trump told reporters.
Ryan, a Wisconsin Republican, said the failure was “disappointing” and admitted Republicans “came up short.”
Democrats claimed victory for the Republican collapse.
“Let’s just, for a moment, breathe a sigh of relief for the American people that the Affordable Care Act was not repealed,” said House Democratic leader Nancy Pelosi of California.
Why Trump's executive order didn't kill Obamacare
Many thought Trump's executive order was the first step at a quick repeal and replacement of Obamacare. That wasn't the case.
Essentially what Trump's order did was direct federal agencies to minimize the financial burden of Obamacare across a range of groups, including states and insurance companies.
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What does that mean? Not much for consumers.
An executive order can’t undo Obamacare. That’s a job for only Congress and lawmakers obviously can't seem to agree on a repeal or a replacement leaving Obamacare as law.
That means Americans still are required to have insurance or face penalties, so you still need to shop around for health insurance if you don't have any or are paying too much for your current policy.
Anyone who signed up for Obamacare during the last open enrollment will still be covered for the upcoming year.
How much is the penalty for not having insurance?
U.S. residents who skip insurance face a fine, and the Obamacare penalty for 2016 for a household is the greater of either: $695 per adult plus $347.50 per child or 2.5 percent of your household income minus the amount of the minimum filing threshold, which is the lowest income at which you need to file taxes. The same fines apply for 2017.
The penalty is capped at $2,085, the average annual premium for a Bronze health insurance plan sold in the ACA marketplace.
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If you didn't have health insurance in 2016, how much will you be fined? The penalty must be calculated in two ways, using the flat dollar amount and the income formula.
1. Flat dollar amount − Calculate the amount you’d owe based on paying the individual penalty amount of $695 for each adult plus $347.50 for each child under 18. Add those numbers for your household to get a total.
2. Income formula − Take your household income minus the minimum filing threshold amount for the year, which is the income above which the IRS requires you to file income taxes. The most recent number available, from 2015, is $10,300 for a single person and $20,600 for a married couple. Calculate 2.5 percent of that number to get a total.
Compare your flat dollar total to your income formula total. The larger number is your Obamacare penalty.
However, calculating the penalty is more complicated if you lacked health insurance for only part of the year. If you went without coverage for only one or two months, you won’t have to pay a penalty due to the short gap exemption.