Health care reform has been top of mind since the election primaries began over a year and a half ago. Now, with the election cycle over, a new president-elect set to take the White House, and a Secretary of Health and Human Services chosen, we have a slightly clearer idea of what that reform could entail.
Several potential paths lie ahead for the Affordable Care Act, from the total repeal and replace Trump has promised to no changes at all. Until we know for sure what the plan is, there are a few key ideas that employers should keep in mind while we wait.
“Repeal and replace” is harder than it sounds
Legislation takes time to pass through both houses of Congress before making its way to the president’s desk — there’s no magic piece of paper that Trump can sign the minute he walks into the oval office that would overturn the entirety of the ACA. Because of this, employers should keep on a steady course for the upcoming reporting season, even if Trump’s administration begins to outline a definitive plan before taking office.
One likely scenario is that within the first few weeks of taking office, Congress will present Trump with a bill to repeal the act, but the repeal won’t actually go into effect until the end of the year, or the following year. This way, the administration can announce that it has “repealed” the ACA almost immediately after entering office, while still having wiggle room to find an effective replacement that will pass through Congress in the meantime.
What exactly might come through in the “replace” column is harder to pin down, although certain components are almost sure to make their way to the forefront.
“Consumer-driven” is a Republican priority
One of Republicans’ biggest objections to the ACA is the influence of big government over the people. They favor consumer-driven markets, rather than government mandates, to keep costs low while providing insurance to the masses.
Many Republican plans involve removing the government mandate and subsidies for those who can’t afford insurance, and replacing them with tax benefits for those who purchase coverage. Monetarily, this should have the same result on the country’s finances, but it may be a better incentive to young, healthy people who are reluctant to purchase insurance, a demographic key to keeping health care costs down.
Another plan in the works involves health savings accounts (HSAs) where people can sock away pre-tax money. Ideas include raising or eliminating the amount of money an individual can put into them, or allowing funds to roll over from year to year.
There’s also been some talk of adjusting the limits insurance companies can charge individuals.
Right now, an older individual should be charged no more than three times what a young person is. Congress might up that multiplier to five, lowering the cost slightly for younger people, and raising it slightly for older people, another tactic to get a higher number of young and healthy people to invest in health care.
The structure may stay, but definitions could change
Another potential change to the Affordable Care Act would keep a lot of it the same, just shaking up some of the definitions to make it less expensive for employers. For example, changing the definition of “full-time” from someone who works 30 hours a week to someone who works 40 hours a week would mean that fewer employees would need to be offered coverage.
Changing the meaning of “affordable” could put more cost on the employee, rather than the employer, or changing the definition of “applicable large employer” could mean that instead of a 50-employee cutoff for providing insurance, it would now be 100, or 250, or even 1,000, keeping costs down for smaller businesses.
These definitions would give companies more options when providing health care to their employees, and could exempt some employers from the reporting they have to do under the current version of the ACA.
Keep an eye on the Secretary of Health and Human Services
Trump has several ideas for health care reform, but no actual experience in politics or lawmaking. Because of this, expect the brunt of the actual health care reform to come from the mind of Trump’s Secretary of Health and Human Services, Tom Price.
While Trump will have the final say on the policy, look to Price’s past health care reform proposals for cues. Odds are, Trump will be leaning toward similar ideas by the time he takes office.
Many of Price’s ideas align with those championed by the Republican Party: consumer-driven practices (his proposal is called the Empowering Patients First Act), switching from subsidies to tax breaks, and age-based aid. How much of his proposal will make it into Trump’s official repeal and replace plan is yet to be seen, but expect Price’s plan to act as a framework to lead the way.
For now, proceed as normal
Only time will tell which of these options will make its way to law, but employers should keep an eye out for news over the next few months.
Trump’s administration will start to come together before he takes office, and further plans will take shape after that. Nothing will change overnight, and the government will be able to direct employers to the best course of action once things do change.
For now, stay on a steady path toward normal reporting, considering the unpredictability of the future. A lot of misleading information will circulate until a new law does (or doesn’t) make its way into place, so double check your facts, keep your data organized, and prepare to go into this reporting season as scheduled.