While much of the focus in 2018 came down to the elections, we now have those results and can begin moving forward.

But, with a divided Congress, what will the impact be on the health insurance marketplace, the health care delivery system, the advisors and employers that interact (plan, strategize, implement and execute) with health benefits, and, most importantly, the employees that participate in the employer-sponsored benefit plans?

The policy landscape

Following the Kavanaugh hearing Sen. Jeff Flake commented that he would have voted differently regarding the FBI investigation if he was running for re-election. This comment paints a picture that our representatives to Congress are concerned with advancing policies that secure their re-election rather than the well-being of their constituents that they represent. With that backdrop, the status quo will be the likely outcome with regard to the current state of the Affordable Care Act (ACA), and America's group health plans, until the 2020 election.

Are there policies and regulations that the parties could agree on?

Here are two observations, based on the assumption that members of Congress are thinking about two goals: getting re-elected, and helping their constituents.

First, if there is any change in policy, it could involve a bipartisan approach to addressing prescription drug costs and the impact of prescription drugs on the health and safety of the community. The national discussion around opioids, the increase in drug prices on certain medications, as well as the lack of affordable generic equivalents, are issues that both parties wish to address from a policy perspective.

However, this represents a change on the margins and not a repeal of the program offered through President Obama or the alternative program offered by President Trump. Further, an incremental approach will not have any true and meaningful impact on the cost of health care – which is supposed to be the focus. Rather, the focus will be on insurance or premium reform.

The second observation is that, while the focus has been on health and health care policy — which is really an example of a tremendous expenditure of energy leading to no action — there is not an equal amount of attention being given to regulations for employers and advisors to meet, which come with real economic consequences. For example: Fines and penalties.

What could change

So, with no one party in control of Congress and the executive branch, what does the next two years look like? Likely, the parties will be eyeing the 2020 presidential election and one of the key topics will be what the social contract with America looks like.

For example, the crushing national debt, cost of health care cost, the cost of tuition and the educational debt and income disparity and burden this has on the vast majority of individuals in this country will push political parties to renew calls to address this situation, however, their energy to tackle this and their solutions will greatly differ.

The debate could focus on the need to raise tax revenues, cut government costs, or a combination of both.

If raising tax revenues is the strategy chosen, the impact on the individual is important. It is certain that all taxpayers will need to contribute some amount of tax revenue to buy down the debt. But, with the median household income hovering right around $60,000 and the average American household carrying $137,000 in debt, the problem becomes pretty clear: Most people are not in a secure place financially – whether this is saving for future retirement or even for a rainy day!

This financial picture will challenge the parties to evaluate what the new social contract with America will be. How does it address the financial and non-financial issues noted above?

Ideological tribes

With such big issues to tackle and the current tribal mentality on their ideological islands, the political landscape and the ability to reach across the aisle in a bipartisan manner is just not present. But, if elected officials follow the words of President Lincoln from his Gettysburg Address “… and that government of the people, by the people and for the people shall not perish from the earth,” then maybe they can work together and address these big issues.

For employers and advisors planning ahead for 2019 and 2020 any changes in the ACA and AHIP will be on the margins (prescription drug cost regulations for example), but not wholesale gutting or elimination of the policies. Employers' attention should remain on regulatory obligations so as to avoid penalties.

As the United States prepare for the next election, we will continue to have a more fervent discussion about what its social contract will be with the citizens — and non-citizens — of the United States.

Not the environment Lincoln wanted

If history is any teacher, this returns us to 1961 and 1962 when John F. Kennedy attempted to advance the social contract and introduced and signed into law the introduction of benefits – what we now know as Social Security — for 4.4 million citizens, which provided financial assistance and was paid for through a payroll tax increase. Reviewing history, there was the tremendous national debate about his policy goal. In the end, he won the hearts and minds over to have this policy passed and put into law.

While we should remain optimistic that for the next two years Congress can achieve significant policy goals, the reality is that the environment is less like the one outlined by President Lincoln. It is a Congress that may be of the people, but unfortunately behaviorally it is operated by the elected official, for the elected official.

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Perry Braun is the executive director of Benefit Advisors Network (BAN) – a national network of independent employee benefit brokerage and consulting companies.

Instant Insights /

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