Trumpcare, not Obamacare, could be a job killer

In less than one week's time Donald Trump is set to become the 45th president of the United States, which seemed mighty unlikely about a year and a half ago when campaigning began. While his agenda once in office is seemingly a mile long, at the top of the list appears to be the repeal of the Affordable Care Act, which you probably know best as Obamacare.

Obamacare isn't well liked, but it's worked

Obamacare isn't a very well-liked health law, nor has it ever been. According to the Kaiser Family Foundation's (KFF) Health Tracking Poll, which is done on a nearly monthly basis, you can count on two hands how many months since March 2010, when the ACA was signed into law by President Obama, more respondents had a favorable view, rather than unfavorable, of Obamacare.

There are multiple aspects of the law that consumers have simply not welcomed. For example, being penalized for not purchasing health insurance hasn't sat well with consumers. The Shared Responsibility Payment (SRP) has increased from the greater of $95 or 1% of modified adjusted gross income (MAGI) in 2014 to the greater of $695 or 2.5% of MAGI in 2016. Based on H&R Block's estimate of a $150 average penalty in 2014 to KFF's estimated average household penalty of $969 in 2016, consumers without health insurance can't be too happy about this penalty come tax time.

RELATED: See the most recent photos of Donald Trump

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Donald Trump since becoming president-elect
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Donald Trump since becoming president-elect
Republican presidential nominee Donald Trump arrives for his election night rally at the New York Hilton Midtown in Manhattan, New York, U.S., November 9, 2016. REUTERS/Andrew Kelly TPX IMAGES OF THE DAY
U.S. President Barack Obama (R) listens to President-elect Donald Trump in the White House Oval Office in Washington, U.S., November 10, 2016. REUTERS/Kevin Lamarque
U.S. President-elect Donald Trump yells to members of the media from the steps of the main clubhouse at Trump National Golf Club in Bedminster, New Jersey, U.S., November 19, 2016. REUTERS/Mike Segar TPX IMAGES OF THE DAY
U.S. President elect Donald Trump reacts to a crowd gathered in the lobby of the New York Times building after a meeting in New York, U.S., November 22, 2016. REUTERS/Lucas Jackson TPX IMAGES OF THE DAY
U.S. President-elect Donald Trump leaves an elevator with Reince Priebus (L) and retired U.S. Army Lieutenant General Michael Flynn before speaking with the media about meeting with families of the victims of the November 28 attacks at Ohio State University, in The Jerome Schottenstein Center in Columbus, Ohio, U.S., December 8, 2016. REUTERS/Shannon Stapleton
U.S. President-elect Donald Trump and Vice-President elect Mike Pence walk off Trump's plane upon their arrival in Indianapolis, Indiana, U.S., December 1, 2016. REUTERS/Mike Segar
U.S. President-Elect Donald Trump speaks at an event at Carrier HVAC plant in Indianapolis, Indiana, U.S., December 1, 2016. REUTERS/Chris Bergin
U.S. President-elect Donald Trump speaks at a rally as part of their "USA Thank You Tour 2016" in Cincinnati, Ohio, December 1, 2016 . REUTERS/William Philpott
U.S. President-elect Donald Trump and Softbank CEO Masayoshi Son speak to the press after meeting at Trump Tower in Manhattan, New York City, U.S., December 6, 2016. REUTERS/Brendan McDermid
U.S. President-elect Donald Trump speaks at a USA Thank You Tour event at Crown Coliseum in Fayetteville, North Carolina, U.S., December 6, 2016. REUTERS/Shannon Stapleton
U.S. President-elect Donald Trump speaks at the USA Thank You Tour event at the Iowa Events Center in Des Moines, Iowa, U.S., December 8, 2016. REUTERS/Shannon Stapleton
U.S. President-elect Donald Trump gestures to the crowd as he stands with U.S. Army personnel as he watches the Army vs Navy college football game at M&T Bank Stadium in Baltimore, Maryland, December 10, 2016. REUTERS/Mike Segar
U.S. President-elect Donald Trump speaks at the USA Thank You Tour event at the Wisconsin State Fair Exposition Center in West Allis, Wisconsin, U.S., December 13, 2016. REUTERS/Shannon Stapleton
U.S. President-elect Donald Trump arrives to speak during a USA Thank You Tour event at Giant Center in Hershey, Pennsylvania, U.S., December 15, 2016. REUTERS/Lucas Jackson
U.S. Vice President-elect Mike Pence (R) introduces U.S. President-elect Donald Trump during a USA Thank You Tour event in Orlando, Florida, U.S., December 16, 2016. REUTERS/Lucas Jackson
U.S. President-elect Donald Trump speaks during a USA Thank You Tour event in Mobile, Alabama, U.S., December 17, 2016. REUTERS/Lucas Jackson
U.S. President-elect Donald Trump speaks briefly to reporters between meetings at the Mar-a-lago Club in Palm Beach, Florida, U.S. December 28, 2016. REUTERS/Jonathan Ernst
U.S. President-elect Donald Trump and Alibaba Executive Chairman Jack Ma speak with members of the news media after their meeting at Trump Tower in New York, U.S., January 9, 2017. REUTERS/Mike Segar TPX IMAGES OF THE DAY
U.S. President-elect Donald Trump listens to questions from reporters while appearing with Alibaba Executive Chairman Jack Ma after their meeting at Trump Tower in New York, U.S., January 9, 2017. REUTERS/Mike Segar
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The American public has also been irritated with insurer networks. When Obama touted the rollout of the ACA, he stated that consumers would be able to keep their doctors and their plans. However, this was a decision that insurers would have to make. Many insurers shut down some of their non-ACA-compliant plans, pushing millions of people into new plans and forcing them to pick a new primary care physician.

However, Obamacare has also successfully completed the job it was intended to do: It reduced the uninsured rate in America. According to the Centers for Disease Control and Prevention, 8.9% of adults (inclusive of Medicare enrollment) were uninsured by mid-2016, down from 16% before the ACA was implemented.

"Trumpcare" could easily become the new norm in America

Despite its numerical success, Trump and congressional Republicans plan to move quickly to repeal Obamacare and implement a new health plan, which will likely bear the moniker "Trumpcare." Though it remains to be seen what Trumpcare might look like, we can probably get a general idea based on Trump's seven-point health reform plan released during his campaign last March.

While you can read the seven-point plan in more detail, here's a quick summary of what you might expect:

  1. Repeal Obamacare
  2. Allow health insurance to be sold across state lines
  3. Full health-premium tax deductions for individuals
  4. Promote the use of Health Savings Accounts
  5. Require better price transparency from health insurers
  6. Block grant Medicaid to the states
  7. Remove barriers to entry for overseas drug producers

As you can see from Trump's plan, it mostly involves the idea of boosting free market competition and removing federal government intervention. For example, block-granting Medicaid to the states is probably the most popular component of Trump's seven-point plan. Essentially, it means the federal government would stop trying to dictate where Medicaid funds would go and allow the states, which probably have a better idea of where the money should be spent, to handle that objective. Block-granting Medicaid could save money and allow federal Medicaid dollars to stretch further.

It's likely that Trump's health reform plan and Congress's will be melded together in the coming weeks to formulate a solution. However, even if one isn't available, it appears that congressional Republicans and Trump stand at the ready to remove critical aspects of Obamacare through a process known as reconciliation (i.e., removing the aspects of Obamacare that affect the federal budget). In perhaps a month or less, Obamacare's SRP and subsidies could be on their way out.

RELATED: people for and against Obamacare

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Protests for and against Obamacare
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Protests for and against Obamacare

Tea Party Patriots supporters hold signs protesting the Affordable Care Act in front of the Supreme Court as the court hears arguments on the health care reform bill on Tuesday, March 27, 2012.

(Photo By Bill Clark/CQ Roll Call)

Affordable Care Act supporters wave signs outside the Supreme Court after the court upheld court's Obamacare on Thursday, June 25, 2015.

(Photo By Bill Clark/CQ Roll Call)

A man holds signs during a protest on the second day of oral arguments for the Patient Protection and Affordable Care Act in front of the U.S. Supreme Court building on March 27, 2012 in Washington, DC. Today is the second of three days the high court has set aside to hear six hours of arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

Sister Caroline attends a rally with other supporters of religious freedom to praise the Supreme Court's decision in the Hobby Lobby, contraception coverage requirement case on June 30, 2014 in Chicago, Illinois. Oklahoma-based Hobby Lobby, which operates a chain of arts-and-craft stores, challenged the provision and the high court ruled 5-4 that requiring family-owned corporations to pay for insurance coverage for contraception under the Affordable Care Act violated a federal law protecting religious freedom.

(Photo by Scott Olson/Getty Images)

An Obamacare supporter counter protests a Tea Party rally in front of the U.S. Supreme Court in the morning hours of March 27, 2012 in Washington, DC. The Supreme Court continued to hear oral arguments on the Patient Protection and Affordable Care Act.

(Photo by Alex Wong/Getty Images)

Affordable Care Act supporters hold up signs outside the Supreme Court as they wait for the court's decision on Obamacare on Thursday, June 25, 2015.

(Photo By Bill Clark/CQ Roll Call)

Ron Kirby holds a sign while marching in protest of the Patient Protection and Affordable Care Act in front of the U.S. Supreme Court on March 26, 2012 in Washington, DC. Today the high court, which has set aside six hours over three days, will hear arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

A protester waves his bible in the air as he overpowered by cheers from supporters of the Affordable Care Act as they celebrate the opinion for health care outside of the Supreme Court in Washington,Thursday June 25, 2015. The Supreme Court on Thursday upheld the nationwide tax subsidies under President Barack Obama's health care overhaul, in a ruling that preserves health insurance for millions of Americans.

(Photo By Al Drago/CQ Roll Call)

Nuns, who are opposed to the Affordable Care Act's contraception mandate, and other supporters rally outside of the Supreme Court in Washington, D.C., U.S., on Wednesday, March 23, 2016. On Wednesday morning, the Supreme Court is scheduled to hear oral arguments in Zubik v. Burwell, a consolidated case brought by religious groups challenging a process for opting out of the Affordable Care Act's contraception mandate.

(Drew Angerer/Bloomberg via Getty Images)

Supporters of contraception rally before Zubik v. Burwell, an appeal brought by Christian groups demanding full exemption from the requirement to provide insurance covering contraception under the Affordable Care Act, is heard by the U.S. Supreme Court in Washington March 23, 2016.

(REUTERS/Joshua Roberts)

Protestors hold placards challenging 'Obamacare' outside of the US Supreme Court on March 4, 2015 in Washington, DC. The US Supreme Court heard a second challenge to US President Barack Obama's Affordable Care Act. The US Supreme Court faces a momentous case Wednesday on the sweeping health insurance reform law that President Barack Obama wants to leave as part of his legacy. The question before the court is whether the seven million people or more who subscribed via the government's website can obtain tax subsidies that make the coverage affordable. A ruling is expected in June.

(MANDEL NGAN/AFP/Getty Images)

 Linda Door (L) protests against President Obama's health care plan in front of the U.S. Supreme Court Building on March 26, 2012 in Washington, DC. Today the high court, which has set aside six hours over three days, will hear arguments over the constitutionality President Barack Obama's Patient Protection and Affordable Care Act.

(Photo by Mark Wilson/Getty Images)

Supporters of the Affordable Care Act celebrate after the Supreme Court up held the law in the 6-3 vote at the Supreme Court in Washington June 25, 2015. The U.S. Supreme Court on Thursday upheld the nationwide availability of tax subsidies that are crucial to the implementation of President Barack Obama's signature healthcare law, handing a major victory to the president.

(REUTERS/Joshua Roberts)

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Bet you didn't see this coming

However, repealing Obamacare and instituting Trumpcare could have an interesting consequence.

When Obamacare was approved, it was believed by quite a few industry analysts (myself included) that it would be a job killer. The employer mandate -- which imposes fines of $2,000 to $3,000 per full-time-equivalent employee who isn't offered health coverage options or who has to pay too much of his or her income to cover premium expenses -- was seen as a deterrent to job creation. Rather than face possible fines, it was believed that businesses would either reduce their workforce to part-time or simply lay off workers to combat rising healthcare expenses.

In reality, neither of these scenarios came to fruition. A Kaiser Family Foundation report found that Obamacare led 7% of employers with 50 or more full-time equivalent employees to bump part-time workers to full-time, whereas just 2% did the opposite. Low interest rates and an improving economy can take some of the credit, but Obamacare was certainly not a job killer based on this report.

Trumpcare, though, could be a job killer. A new report from the Milken Institute School of Public Health at the George Washington University and the Commonwealth Fund estimate that the repeal of Obamacare could cost almost 3 million jobs by 2021. The reason? The lack of federal funding is expected to cut gross state product by $1.5 trillion between 2019 and 2023, meaning there will be less money to spend on hiring.

Here's what's really interesting: Only about a third of the nearly 3 million job losses are expected to be in the healthcare sector. The remainder will come from other industries as consumers are forced to spend more on their healthcare and have less disposable income to spend elsewhere (e.g., food, clothing, entertainment).

It is possible that the number of estimated job losses could be overstated. For instance, Trump's plans to implement individual and corporate income tax reforms should, in theory, put more money into the pockets of consumers and businesses, which may offset some of the aforementioned $1.5 trillion in reduced gross state product from the elimination of federal subsidies. Nonetheless, without a firm plan to replace Obamacare, around 20 million people could lose their health insurance, and around 3 million people could also eventually lose their jobs.

Trump has a monumental challenge ahead of him, and the next few months will tell the tale of where healthcare in America heads next.

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