Change is the only constant we know and on January 20 our nation will swear Mr. Donald Trump into office as the 45th president of the United States of America.
Whether you were “with her” or wanted to make “America great again,” all the debates and campaign rhetoric will turn to ink on Friday. For us, the question will be how much proposed change will actually materialize. “Repealing and Replacing” Health Care Reform is top of this list.
My dad, who spent 30-plus years in politics, told me on election night that an elected official is never as bad as their opponents say and never as good as their supporters hope. With that, they never create all the change they promise.
I believe this tenet will only be pronounced with the polarizing and extreme marketing campaigns of the Trump campaign.
In general, Republicans do feel obligated to repeal as much as possible to unite and usher in the presidency. It is also important to note that if democrats vote against repeal and republicans vote for repeal then there are not enough votes in the Senate for anything to get to the President’s desk under normal rules.
In political terms, the Republicans don’t have filibuster-proof majority in the Senate; however, under the budget reconciliation process, only a simple majority is needed. The budget reconciliation process is subject to a number of rules, including a requirement that the provisions included in the budget bill must affect federal spending, revenue or debt.
The caveat here is the budget will include other initiatives as well and the votes may not come as defined by party.
John Garner, our Chief Compliance Officer, spoke recently at the Gateway Cities PIHRA chapter and addressed what repeal and replace can actually mean given the guidelines for using the budget reconciliation process. The main points are below.
What Trump can change (based on what the Senate parliamentarian approved as part of a budget that was vetoed by President Obama in 2016)
- Eliminate Expansion of Medicaid
- Eliminate Subsidies
- Eliminate Individual Penalties
- Eliminate Employer Penalties
- Require Full Repayment of Excess Subsidies
- Halt Collection of Transitional Reinsurance Fees
- Reduce Taxes on Non-Medical Use of Health Savings Account (HSA) Funds
- Eliminate New Taxes, Including
- So-Called Cadillac Tax
- Health Insurance Tax
- Increased Medicare Taxes on Higher Incomes
- Retiree Drug Subsidy
- Eliminate Small Employer Tax Credit
- Allow HSAs, Health Flexible Spending Accounts (FSAs) & Health Reimbursement Arrangements to Pay for Over-The-Counter Drugs
- Remove the Limit on Salary Reductions to Health FSAs
- Restore 7.5% Threshold on Tax Deductions for Medical Expenses
What Trump cannot change with budgetary reform
- Ban on Pre-Existing Conditions Exclusions
- Guaranteed Issue of Health Insurance
- Employer Reporting
- Covering Children to Age 26
- Changes to Medicare Part D
- Minimum Loss Ratio Rules
- Ban on Lifetime & Annual Maximums
- Ban on Rescissions
- Preventive Coverage at 100%
- Summaries of Benefits & Coverage
- External Review
- Premium Review
- Age Rating for Small Groups
- Section 1557 Nondiscrimination Rules
- 30% Incentives for Wellness Plans
- Essential Health Benefits for Small Groups
- Maximum Out-of-Pocket Limit
- Exchange Notices
Bottom line – eliminating portions of the ACA puzzle will destabilize the individual marketplace. Particular carriers have already pulled out due to future projected losses.
Right now we wait. And while we wait we do. Just as in life.