RIP Obamacare -- Here's What Trumpcare Means for You
“You’re lucky you got here when you did” the nurse said to me as she changed out the IV bag. “If you waited another 24 hours, you probably wouldn’t have made it.”
I smiled and gave her the thumbs up as a new batch of morphine worked through my system.
Seventeen days later, after four surgeries and multiple painful procedures, I was finally discharged. An antibiotic-resistant staph infection had attacked my body, nearly killing me in the process.
After three days at home, I managed to limp out to the mailbox. It was the first time I had been outside in nearly a month. And technically I wasn’t supposed to be walking. But I just couldn’t sit in the house any longer.
I was totally unprepared for what I found…
An oversized blue envelope was on the top of the mail stack. The return address was from our local hospital. And this was NOT a get-well card.
Instead, it was a bill for my 17-day vacation. To the tune of $130,000.
I had never been more thankful for my high-deductible health insurance policy!
Health insurance is getting prime-time attention this week as Congress begins to debate the new “Trumpcare” bill. This is the new legislation intended to repeal and replace Obamacare.
Today, we’ll discuss what this bill means for you… as a retiree, as a taxpayer, and as an investor.
Trumpcare Changes for Retirees
If you’re retired (or planning to retire in the next few years), you’ll need to pay close attention to the provisions of this bill.
In particular, the bill will end the requirement for you to have a health insurance policy or pay a penalty. But the bill should make it easier for you to participate in a private health care plan because of a special tax credit.
If you are not employed, or if your employer does not provide a health care plan for you, the bill provides an advance tax credit to help cover the cost of signing up for a private plan.
If you’re under 30 years old, the credit is $2,000. And the credit increases gradually based on age — to a total of $4,000 for those over 60. Family tax credits are capped at $14,000 annually.
According to the Wall Street Journal, the plan would leave the private health care plan exchanges (set up under Obamacare) intact. So you’ll still be able to use these exchanges to compare and purchase health care plans.1
Of course, if you’re still employed and your employer offers a health plan, it’s likely still best for you to participate in that plan. Just be aware that the new Trumpcare plan does not require companies to offer health care options anymore.
Trumpcare Changes for Taxpayers
As a taxpayer, I’m definitely curious about the cost of this bill…
So far, there’s very little information about how much this new bill will cost taxpayers. But the bill is being touted as a way to decrease costs for taxpayers while boosting choice for consumers. (I don’t blame you if you’re skeptical.)
One of the bill’s provisions is set to double the amount of tax-free money that you can contribute to a Health Savings Account (or HSA). If you have out of pocket medical expenses, using a HSA can be a great way to lower your tax bill simply by contributing to this account first, and then using the money in your HSA to pay for prescriptions and doctor’s visits.
Another provision will reduce the amount of Federal funding to state Medicare plans. This move will certainly help lower the cost of health care born by the Federal government. But at the same time, state governments will have to pick up the slack. This portion of the bill is set to go into effect in 2019.2
Bottom line, the cost (or savings) of Trumpcare are still very difficult to evaluate. But as more research is done, I’ll fill you in on the details.
Trumpcare Changes for Investors
The biggest takeaway for investors is that Trumpcare is not going to eliminate demand for medical care in the U.S.
Sure, there are going to be changes in who pays for what service. And some of those changes will be messy and take time to work through. But Americans are still going to be visiting their doctors, Americans are still going to be buying prescriptions, and Americans are still going to be filling hospital beds.
And with the aging demographic in the U.S., demand for medical products and services will only grow.
As an investor, I’m excited about some of the opportunities I’m seeing in the health care industry.
Stocks in this area have been pushed lower, largely because investors are so uncertain about what will happen to health care legislation under the Trump Administration. But as this bill works its way through congress, much of that uncertainty will be lifted. And cheap stocks will return to more reasonable prices.
I’ve already started recommending some dividend stock opportunities to readers of my Lifetime Income Report newsletter. And I plan to recommend more opportunities as the health care picture becomes more clear.
Keep in mind, Trumpcare legislation is still in the early stages of the process. There will certainly be negotiations, adjustments, and even major concessions made as the bill moves through Congress.
I’ll be watching the developments and keep you posted on the important details.
Here’s to growing and protecting your wealth!
Editor, The Daily Edge
1House GOP Releases Plan to Repeal, Replace Obamacare, Stephanie Armour, Kristina Peterson, and Michelle Hackman, The Wall Street Journal
2Some Key Changes Under Proposed Obamacare Overhaul, Michelle Hackman, The Wall Street Journal