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September 30, 2016

How the Election Results Could Change the Affordable Care Act

How the Election Results Could Change the Affordable Care Act

 With the first presidential debate for 2016 now in the rear view mirror, it’s a good time to take a look at how the results of the upcoming election could affect health care and the Patient Protection and Affordable Care Act (ACA). The two major party candidates, Democratic nominee Hillary Clinton and Republican nominee Donald Trump, have very different ideas on health care and the election of either would definitely impact the ACA. Former Secretary of State Clinton would expand the ACA, while Mr. Trump advocates its full repeal. Trump’s proposals do not offer a replacement plan, but they reflect a move to what he describes as free market principles. Since the ACA was enacted, the number of uninsured persons in America has declined significantly.

The Uninsured Dilemma 

According to The Centers for Disease Control and Prevention, the uninsured stood at 15.1 percent in 2011. The uninsured percentage declined to single digits for the first time, falling 9.1 percent in 2015 after a 2.4 percent decline in 2014. Clinton’s proposed policies would further reduce the number of uninsured by 9.1 million. She supports lowering out-of-pocket costs and prescription drug costs with a tax credit of up to $5,000 per family (and $2,500 per individual). It would be available to those whose medical costs exceed five percent of their household income. Secretary Clinton also wants to put a cap on ObamaCare premiums, so no one pays more than 8.5 percent of household income for coverage. A RAND Corporation/Commonwealth Fund analysis released in September says Clinton’s tax credit proposal could increase access to insurance for about 9.6 million people. Changes to the so-called “family glitch” and reducing the maximum premium for those purchasing insurance could add another 2.8 million insureds nationwide.

The Value Of The State Marketplace

In contrast, the Trump campaign wants to eliminate the federal and state marketplaces and allow people to buy their own health insurance and deduct the costs from their taxes. Mr. Trump wants to expand the use of tax-exempt Health Savings Accounts, give states a fixed amount to cover lower-income Americans under Medicaid (instead of paying a share of each participant’s cost), and permit the sale of health insurance across state lines, which he says will increase competition and reduce costs. His other goals include allowing overseas drug providers into the market and increasing price transparency from health care providers. For employers, according to the Society of Human Resource Management (SHRM), the Trump plan would also institute a cap on the employer tax exclusion for health care and expand employer-sponsored wellness programs. RAND estimates the Trump proposal would cause nearly 20 million people currently insured to lose their insurance in 2018. RAND and Commonwealth say the Trump proposals would increase the average premium and out-of-pocket costs for people who buy coverage on their own, while also increasing the federal deficit. (The deficit would go up because of the loss of tax revenue from the new deduction for individual health insurance.) Three of the Clinton proposals would increase the federal deficit as well – the largest increase associated with tax credits for those with high out-of-pockets costs. Secretary Clinton has proposed this be offset by rebates from drug manufacturers and taxes on higher-income individuals and families.

Current Polling

The race for the White House is very tight, and appears to be tightening in some areas of the country as the election nears. However, the Kaiser Family Foundation reported in its ongoing survey of voters that (at least into September) Clinton was holding an advantage over Mr. Trump when it comes to health care issues. More voters told Kaiser they trust Clinton to do a better job than Trump. For example, Clinton leads Trump on the future of Medicare (53 percent to 38 percent), access and affordability to health care (52 percent to 39 percent), Medicaid’s future (54 percent to 38 percent), and prescription drug costs (54 percent to 34 percent) in the Kaiser Health Tracking Poll.

Senate & House Control Will Play A Big Role

Regardless of who wins the White House, changes to the Affordable Care Act are more dependent on whether the U.S. House of Representatives and U.S. Senate stay in Republican hands, both flip to the Democrats (a highly unlikely scenario), or go back to being split (with one party in charge of each chamber).

The change both major party candidates and both the House and Senate can likely agree upon is an end to the so-called Cadillac Tax, which would levy a 40 percent tax on the cost of employer-sponsored health coverage that exceeds certain thresholds: $10,800 for self-only coverage and $29,100 for family coverage (adjusted for inflation). Implementation has already been pushed back twice – now it’s set to begin in 2020 – but it could be eliminated altogether after a new occupant moves in at 1600 Pennsylvania Avenue.

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