What Small Business Can Expect Under Obamacare Repeal
There is some uncertainty regarding the timetable for the “full repeal and replacement” of the Affordable Care Act (ACA) by President-elect Trump and the Republican-controlled Congress. However, no matter how long it may take, there are changes small business owners can expect as part of any 2017 (or later) effort to change the health care law.
New HHS Secretary
Rep. Tom Price (R-Georgia) has been named as the planned new Secretary of the U.S. Department of Health & Human Services, which is responsible for implementation of the ACA and oversight of the Centers for Medicare & Medicaid Services (CMS). While there is some opposition to the Price nomination, Congressman Price has been an outspoken critic of the ACA. He introduced legislation to cut off funding for the health care law in 2015. His reconciliation bill would have eliminated the funding of premium tax credits and cost-sharing subsidies, which make ACA premiums more affordable for low- and middle-income Americans. (While both the House and Senate passed the Price bill in 2015, President Obama vetoed it in January 2016, after which Congress failed to override the veto with the required two-thirds vote in each chamber.)
The President-elect has voiced support for increased use of Health Savings Accounts (HSAs), which offer tax-advantages to those enrolled in high-deductible health plans. There is no federal tax on contributions to HSAs and interest accrues tax free. There is no tax due when funds are withdrawn to pay for qualified health care expenses. Critics of HSAs say they are very helpful to high-income people, but offer fewer benefits to lower-income individuals who may not have the ability to contribution.
Insurance Sales Across State Lines
While the ACA already allows for states to reach agreements with other states to allow cross-border insurance sales, it’s not been appealing to most insurers. (Health insurance has traditionally been sold and regulated at the state level, with each state setting its own standards for plans sold in the state.) The Trump administration says allowing insurers in one state to offer policies in another state would give buyers more options and drive down the cost of coverage. Critics says it will become a “race to the bottom” as insurers flock to operate in states with fewer regulations (and fewer consumer protections). They point to the changes in the credit card industry that occurred after 1978, when the Supreme Court ruled that credit card regulations could be exported by banks located in one state to customers elsewhere, which led issuing banks to set up shop in places like South Dakota and Delaware, which had virtually no usury laws, nullifying other states’ limits on credit card fees and interest rates.
Continued Dependent Coverage
President-elect Trump told CBS in a November interview that one of the things he likes about the ACA – and there aren’t many things – is the provision that allows parents to keep their children on their health plan until age 26. If there’s a way to continue it in a post-ACA world, dependent child coverage is likely to continue.
What’s Not Yet Known
Something else that the future president agrees is beneficial to consumers is the pre-existing condition exclusion that is a bedrock of the ACA. However, it’s not yet known whether any ACA replacement plan could be crafted that would keep that benefit in place. As of 2014, the ACA made it illegal for health insurance companies to deny coverage to anyone with a pre-existing condition, something that was common for individual insurers previously. Conditions that historically triggered an automatic denial were cancer, diabetes, heart disease, epilepsy, and pregnancy. According to an analysis by the Kaiser Family Foundation, about one in four people have a pre-existing condition that will make it difficult for them to get health insurance if the pre-existing condition prohibition is eliminated as part of the ACA repeal.