The future of the Affordable Care Act (ACA)

Changes ahead under President Trump.

The December 20 Small Business Legislative Council webinar sponsored by the Specialty Tool and Fasteners Distributors Association focused on the Affordable Care Act under the Trump Administration. Here's what they foresee.

In 2016, the overwhelming consensus from Republicans and then Presidential candidate, Donald Trump, was for total repeal of the ACA or Obamacare. But facts reveal otherwise. For starters, Republicans don't have the filibuster-proof majority in the Senate necessary to pass an outright repeal. In addition, the full ACA cannot be repealed through reconciliation and some of the ACA's provisions are popular on both sides of the aisle. 

In contrast to Congressional Republicans, Trump hasn't indicated much interest in large-scale Medicare, Medicaid, or Social Security reform.

As a result, changes to the ACA in 2017 are likely to occur as a step-by-step approach rather than a swift repeal and replacement.

The most popular parts of the ACA allow children to stay on their parents' plans until age 26, the ban on pre-existing condition limits, and no lifetime limits. But if any sections of the ACA are to be scaled back, it starts with the reconciliation process.

The basics of reconciliation mean that bills can pass with a simple majority only if they directly impact revenues or outlays. Congress already passed a reconciliation bill in 2015 to repeal the ACA that President Obama vetoed, but it gave Republicans a framework of what can be done with the ACA during reconciliation.

With this in mind, key parts of the ACA eligible for reconciliation action include: employer and individual mandates; the Cadillac tax; Medicaid expansion; medical device tax; small business tax credit; and the 3.8% tax on investment income.  Items ineligible are: pre-existing condition rules; lifetime and annual cap rules; and actuarial value rules.

While Republicans work through the process of reviewing and trying to implement certain healthcare repeals, the Trump Administration could hasten their progress by pulling or changing guidance to the process, preventing lawsuits from being defended, stop pushing for exchange enrollments, or stop working with insurers to keep them in the marketplaces.

Little talk has been said of what the "replacement" would be to the ACA, but Trump has been supportive of expanding HSAs and similar arrangements. He's also in favor of across state line sales and a flat rate deduction for insurance rather than a tax preference for employer-sponsored insurance or limiting exclusions for employer paid premiums.

This sounds very similar to what Rep Tom Price (R-GA) asserted as one of the chief sponsors of the Empowering Patients First Act. This Act favors the use of HSAs by providing a one-time tax credit for HSA contributions and increasing the HSA contribution cap. It includes a refundable credit based on age to buy individual insurance by creating a new high-risk pool program for individuals with pre-existing conditions. It also allows the sale of insurance across state lines and limits the employer exclusion or deduction of health care premiums.

Only time will tell the future of the ACA as the Trump Administration gets settled and 2017 progresses. Stay tuned!