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Trump and Obamacare: The Law Still Requires You to Purchase Health Insurance

Don't think Obamacare − or the penalties for not having health insurance − will disappear overnight because Donald Trump is now president.

President Trump’s victory has many Americans wondering what will happen to their health care plans and whether they should enroll in coverage for the upcoming year. It's a real concern made even more confusing by the back and forth in Congress and Trump's recent executive order that seems to be a first step in dismantling Obamacare.

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But that executive order was a very small first step and there's still a lot of groundwork to cover. The law stating you must have health insurance or pay a fine still exists.

If Trump or Americans eager for an Obamacare repeal are looking for help on Capitol Hill that may be a long time coming. Sen. Bob Corker, Tennessee Republican, recently told reporters that GOP senators have not started to work in earnest on a replacement plan.

"To be honest, there's not any real discussion taking place right now," Corker said in February, reports The Huffington Post.

Corker then added that he wasn't sure when his party might have a replacement plan for the health care law.

Complicating things even further seems to be the shift in public opinion. A recent Health Tracking Poll from the Kaiser Family Foundation has Obamacare at a much more favorable rating than at any time since 2010. Forty-eight percent of Americans now view the law favorably, compared to 42 percent who view it unfavorably.

At the same time, a recent Pew Research Center Survey finds that 54 percent of Americans approve of Obamacare, which is the highest lever ever recorded by Pew. They put the disapproval rating at 43 percent.

Did Trump's executive order end Obamacare?

Many thought Trump's executive order was the first step at a quick repeal and replacement. That's probably not 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.

What does that mean? Not much for consumers.

An executive order can’t undo Obamacare. That’s a job for only Congress. With Republicans in control of both chambers it does look good for change, but the reality is that Obamacare is a law that can’t be undone by a president.

Even the Republicans in Congress aren't all onboard with completely dismantling the health care law. Sens. Orrin Hatch of Utah and Lamar Alexander of Tennessee announced in February that they are open to just repairing Obamacare for now instead of repealing it entirely.

"No one is talking about repealing anything until there is a concrete practical alternative to offer Americans in its place," Alexander said recently at a Senate hearing.

Hatch said he's open to anything when it comes to Obamacare − including keeping it in some form.

Trump's executive order, meanwhile, can certainly tinker with the law and set the mood for its future, but Americans still are required to have insurance or face penalties. That has not changed.

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It could take months or even years for health care laws to change, 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.

Congress is expected to be busy plugging away on an Obamacare repeal bill, which would likely eliminate the individual mandate that requires people to enroll in health care coverage or face hefty fines.

So you can expect changes. It's just not clear what those changes might be. 

When it comes to a timeframe for any repeal, you might have to wait until 2018 or even 2019. Anyone who signed up for Obamacare during the last open enrollment will still be covered for the upcoming year.

Furthermore, it’s unclear whether the individual mandate would still apply in 2017.

If you’re considering canceling your health care coverage because of Trump's election, be warned that you might be required to cough up that “uninsured tax” for another year.

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.

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.

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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.

To help crunch the numbers, insuranceQuotes has an Obamacare Penalty Calculator to help you easily understand the penalties.

How do you repeal Obamacare?

Many GOP leaders seem determined to completely do away with Obamacare and are working on legislation to replace it, such as Rep. Steve King, Iowa Republican.

"My bill is the answer to this nightmare: full 100 percent repeal of ObamaCare as if such act had not been enacted," King said at the start of the 115th Congress in January.

Though Republicans control Congress, they do not have what’s known as a “super majority” in the Senate, which would give them enough votes to push through a full repeal of Obamacare. Senate rules require 60 votes to pass legislation, but Republicans only have a slim majority in the upper chamber. There will be 52 Republicans and 48 Democrats, most of whom are certain to oppose any attempt to disband Obamacare.

Still, Trump's election certainly has increased momentum for a full repeal.

"In the wake of the presidential election it has become abundantly clear that the American people have overwhelmingly rejected Obamacare time and time again,” King says. “Now that Republicans have control of both the House and the Senate as well as a Trump presidency, we must take swift action to fulfill our promise to 'We the People' and repeal this unconstitutional and egregious law passed by hook, crook and legislative shenanigan."

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