This is not a good time to be trying to predict with accuracyhow the insurance industry will fare in the wake of the 2016 elections.Much remains unknown.

One factor that will come into play is the extent to whichPresident-elect Donald Trump differs on some specific issues fromthe Republican Congress. Usually, when the same party holds thepresidency and majorities in both houses of Congress, the pictureis clear. This time, Trump's inexperience in the political arenamakes the insurance industry's future uncertain.

An altered landscape

Controlling both houses of Congress, Republicans are likely toconcentrate on reducing regulations, cutting taxes and generallypursuing business-friendly policies that promote economic growth.Trump, a businessman, can be expected to support these broadgoals.

Under this rubric, an issue such as tax reform should be ano-brainer. Another area in which change is likely to proceedsmoothly is the effort to roll back portions of the Wall StreetReform and Consumer Protection Act (Dodd-Frank).

The National Association ofProfessional Insurance Agents (PIA) supports such arollback, as Dodd-Frank has given too much power to federalentities to regulate insurance companies; this excessive federalinvolvement was on display particularly with its creation of theFederal Insurance Office, which the PIA opposes. Hopefully, theelimination of the FIO would be included in any roll-back ofDodd-Frank — but here's where things get more complicated.

A Dodd-Frank rollback bill,the Financial Creating Hope and Opportunity forInvestors, Consumers and Entrepreneurs Act (H.R. 5983),was passed by the House Financial Services Committee this year. Butburied in it was language that bolstered rather than reduced thefederal oversight of insurance. The provision would create a newfederal office in the Treasury Department called the Office of theIndependent Insurance Advocate. That office would merge with theFIO. Rather than being headed by an employee hired by Treasury — asis the case with the FIO — the independent insurance advocate wouldbe a presidential appointee, subject to Senate approval, with asix-year term. The bill authorizes the Independent InsuranceAdvocate “to employ attorneys, analysts, economists and otheremployees as may be deemed necessary” to assist the office incarrying out its duties and functions.

All bills that have been introduced but not passed will diebefore the 115th Congress convenes in January 2017. The FinancialCHOICE Act is likely to be reintroduced, either in its current formor an altered one. As a staunch supporter of state insuranceregulation and opponent of federal insurance regulation, PIA willremain vigilant in its efforts to ensure that no new paths to thefederal regulation of insurance are created as part of anyDodd-Frank rollback.

The National Flood InsuranceProgram is up for reauthorization on Sept. 30. Efforts areunderway to secure a five-year reauthorization, which PIA supports.President-elect Trump has yet to comment on the program.

There's widespread bipartisan support to the "Cadillac Tax"provision of the Affordable Care Act, making its repeal likely.(Photo: iStock)

Obamacare: Repeal or replace?

By far, the biggest question is what will be done aboutObamacare.

Trump made repeal of the Affordable Care Act amajor plank of his campaign. Days after his election, Trumpreversed himself on completely eliminating the ACA, saying insteadhe would like to keep two of its popular features. He said that theban on insurers denying coverage to individuals who are sick“happens to be one of the strongest assets,” of the law. He alsosaid he would try to keep Obamacare's provision allowing adultchildren to stay on their parents’ plans until the age of 26. Trumpsaid he plans to repeal the law and replace it with new law“simultaneously,” so coverage would not lapse.

One issue that straddles both tax policy and healthcare is the“Cadillac Tax,” a provision in Obamacare that imposes a 40 percentexcise tax on so-called “overly generous” employer-provided healthplans. Initially set to take effect in 2018, Congress voted thisyear to delay it to 2020. Essentially, the Cadillac Tax is aback-door attempt to ration health care and raise funds to pay forthe ACA. It applies a disincentive to employers in an effort toreduce the benefits of people who already have good coverage, tohelp finance a lower level of coverage for more people. TheCadillac Tax is a health policy time bomb that would begin todestroy the private sector's system of employer-based coverage uponits detonation in 2020. There has been widespread bipartisansupport for the elimination of the Cadillac Tax, making its repeallikely.

Another part of the ACA is a regulation that classifies producercompensation as an “administrative expense” in the calculation oftotal administrative expenses, which are limited to 15 percent or20 percent under the act. As a result, health insurance agent andbroker compensation has been slashed by health insurers in thesmall group and individual markets, leading to an exodus ofqualified, licensed agents and brokers capable of serving peoplecovered by ACA-backed plans.

Looking ahead to the 115th Congress, there is cause forcontinued but cautious optimism. The unexpected election ofPresident-elect Donald Trump will bring issues to the forefrontthat would not have been under consideration otherwise.

Ted Besesparis is senior vice president of the National Association ofProfessional Insurance Agents in Alexandria, Va. Anyopinions expressed are his own.