Future changes to the Healthcare Reform… AGAIN!
The election has come to an end, and with it serious changes to the Affordable Care Act could be coming soon. While no one can absolutely predict the future, there are some indicators as to what we can expect from this change in governance. The Republican controlled Congress and the new Republican president-elect Donald Trump, have all repeatedly vowed to repeal and replace the ACA. The question is, how does that effect the provisions in the law that are already there and liked by much of the insured population?
ACA insurance reforms are largely popular with the everyday insured folks. Some provisions under ACA group health plans are favorable, such as the inability to impose lifetime limits on group plan benefits. Before the ACA, lifetime limits were standard, meaning that if a person went beyond their agreed upon lifetime dollar limit for their plan they would no longer benefit from the plan. Lifetime limits don’t increase the cost of insurance by any significant factor, because so few individuals actually exceed them, and they are liked by the insured, so we won’t likely see any elimination of lifetime limits.
Annual Limits
Annual limits for essential healthcare benefits are also likely to survive in any repeal or replace strategy—for the exact same reasons that lifetime limits are likely to be accepted. Dependent coverage is also likely to stick around. Before the ACA, children covered by group health plans would eventually “age out” of their parent’s plan once they hit age 19, with the exception of kids in college full-time. The ACA, however, required health plans to cover children until they reach the age of 26, no matter if they married or didn’t go to school. This provision of the ACA is one of its biggest successes, and young adults who are underemployed or unemployed can enjoy some protection thanks to its passage.
The uninsured rate for young people is around one third higher than it is for older employed adults. The coverage offered by the ACA has guaranteed health insurance for millions of young people. The ACA has enabled group health plans to eliminate pre-existing condition exclusions as well. According to some recently proposed Republican health insurance replacements, this pre-existing clause will be eliminated if the law is repealed. Instead of this option, insured individuals would be required to maintain continuous coverage to avoid preexisting exclusions or limitations.
The previous health care law encouraged responsible behavior by motivating people to stay within the insurance pool even when they don’t necessarily need insurance, which in turn helped to keep costs lower.
Mandates
Another provision of the ACA is tax credits to small businesses who buy insurance. This aspect may survive the proverbial chopping block. Reforms made to Medicare will also likely live on, especially the Medicaid Expansion. Many other provisions simply won’t go on, however, since they are a broader part of the healthcare mandates of the ACA.
Speaking of mandates, that was one of Mr. Trump’s core messages, that Washington was giving too many mandates. His message didn’t go unnoticed, and now that he is president-elect, he will be taking a strong look at the “individual mandate,” which penalizes people who fail to get insurance. This is unlikely to continue under his Administration. Another important mandate of the ACA is the employer “pay-or-play” mandate. The repealing of this mandate will have a profound effect on businesses throughout America.
Currently, employers under the ACA have to establish individuals who work 30 hours a week as a “full-time” employee, and have to complete and file a massive list of complex reporting forms (1094 and 1095) to legally operate. If the ACA is repealed, businesses will no longer have to do this.
More Competition Between Health Insurance Carriers
Finally, the Cadillac Tax, slated to become law in 2020, will also be eliminated. The question is, what will its replacement look like? No one truly knows, but we can all be confident that Trump will spend a good deal of his time in discussions with Senate and House leaders to determine what proposal best fits his vision for the country.
As a candidate for the presidency, Mr. Trump honed in on key areas of the healthcare industry. His primary goal was to permit the sale of health insurance across state lines. Current federal law allows states to limit the sale of health insurance in their states. This has in turn lead to some insurance providers “owning” the market in their state. Mr. Trump has said he believes that increased competition will reduce costs and lead to better quality healthcare. For employers, however, eliminating a state’s ability to provide access to several carriers makes the jobs of single state and multi-state employers easier. Mr. Trump was equally interested in using Health Savings Accounts (HSAs) to improve costs, and for employers it could in fact turn out to be a good plan.
Enhancements
Any new ideas will likely be costly. The question is, how will the Trump administration pay for them? Modifying the tax-preference to employer-provided health insurance might be one option. Two common tax options are on the table via Republican lawmakers: 1)., A phase out of tax-free premiums based on income levels, or 2)., A phase out based on the total cost of premium. In the former, proposals are typically set up with reimbursement limits for when the tax-free nature of the insurance will be eliminated. In the latter, a limit will be imposed based on the value of the insurance coverage—which is similar to the Cadillac Tax. Either way it swings, taxes will have to increase somewhere to pay for changes to the law.
We can’t say for sure what will happen to healthcare under President Trump, but we can say that providing insurance will continue to be important for employers and to employees. Until we know for sure the outcome of this new administration, we cannot advocate making any changes to your current insurance plans. Forge ahead into the new year and realize that it will take years for a repeal to go into effect, if one does at all.
EN 
ES