As we prepare for a new administration to take the helm this January, it comes as no surprise the top employee benefit concern among employers is the fate of the Affordable Care Act (ACA). Donald Trump’s victory, along with Republican majorities retained in both the Senate and House of Representatives, will have significant impact on a number of compliance issues over the next four years.
During his campaign, Trump called for the repeal and replacement of President Barack Obama’s hallmark health care reform legislation, the ACA. Since its enactment, Congress has voted to repeal the ACA at least 60 times. With sweeping Republican victories and no threat of a Democrat President’s veto, repeal of the ACA is all but certain.
While the agreement on the final changes and the timing is unclear, Republicans are moving forward with legislative proposals to repeal many significant ACA provisions, including the employer mandate and individual mandate. We know that the changes will not take place overnight. The legislative process takes time to work, involving many pieces of legislation along with new rules and regulations to remove the ACA.
The Administration understands the impact these changes will have on individuals and so looks to implement changes over a period of time to ensure the least amount of disruption for individuals and the health care system.
In a recent Aon employer survey, 48% responded that the employer mandate is their biggest concern for the new administration, specifically the uncertainty of these reporting obligations—whether they will be dropped, expanded or modified.
According to U.S. Department of Health and Human Services (HHS), approximately 20 million people have gained coverage due to the ACA with 11.4 million expected to be enrolled through Obamacare exchanges in 2017. According to Modern Health Care, 90% of those enrolled in Obamacare receive significant subsidies and many may not be able to afford coverage without this financial assistance. Furthermore, many new insureds were formerly uninsurable and have benefited from the requirement placed on insurance carriers to provide coverage regardless of an individual’s current health status.
In the end, to solve the health care crisis, the cost of health care will have to be addressed. Republicans believe a free market approach, not a government funded and highly regulated approach will be more effective at bringing down the cost of health care. Among other policies, Trump’s platform includes mandated price transparency for health care providers. There are indications that the American Hospital Association and the American Medical Association seem to be warming up to the idea. In the absence of incentives, convincing consumers to choose care based on price and quality will be a challenge with the current third-party payor system. However, there are few other examples where consumers don’t have access to pricing and quality data when making big-ticket purchases.
Although Congress was just sworn in on January 2, we’re already seeing the first bills introduced into Congress. It is still too early to tell whether they will reach any agreement by the presidential inauguration and have something ready for the new President to sign. Employers should plan to continue their compliance activities centered around the ACA for the near future. OneDigital will keep you up to speed on changes and how they will affect the design and delivery of your benefits program.
In this period of uncertainty and transition, OneDigital will deliver you peace of mind by continuing to serve as your expert providing strategic, proactive leadership in the turbulent times ahead.