The Obama administration’s flagship health care legislation the 2010 Patient Protection and Affordable Care Act – commonly known as the Affordable Care Act (ACA), and popularly known as Obamacare – was the most significant change to the U.S. health care system since 1965 and has extended health insurance coverage to millions of Americans. But it is not without its critics. Costs of health care have continued to rise, and some have criticized the administrative burdens the new insurance requirements have placed on employers.
What changes might the new administration have in store for the U.S. health care landscape? What are the key parts of the ACA likely to be repealed or reformed, and what new provisions are likely to affect employers and employees? And, with so many uncertainties, what can businesses do to prepare?
The Political Landscape
But what does a Republican vision of U.S. health care look like? The new administration will be working through its options over the coming months, which will lead to some uncertainty for individuals and organizations alike. Outside of the Trump campaign, Speaker Paul Ryan and the Republican Party have for some time been championing their own “Better Way” plan. Some of its key tenets have also been embraced by the Trump campaign. Understanding this – along with other comments made in the run-up to the election – could provide some insight into what the health policy of the new administration may look like.
Repeal & Replace – The Immediate Picture
As we await further clarity, there are some areas that can be predicted with more confidence than others based on what is known so far, as well as based on the practicalities of implementing major changes to the U.S. health care system.
Several possibilities are outlined below, although it is important to note that at the time of writing, no specific policy positions have been confirmed by the incoming administration. Indeed, with the U.S. health care system being so complex, “it may be an exercise of amending and modifying the Affordable Care Act, rather than a true repeal and replace,” says Kerri Willis, SVP, Legal Consulting, Aon Health & Benefits.
It is possible that some parts of the ACA are more likely to be repealed than others, while there are a number of new approaches that may be introduced by the Trump administration based on past announcements:
Sections of The Affordable Care Act That Might Stay
Sections of The Affordable Care Act Likely To Change
What Might Be New?
Some major Trump proposals, discussed during the presidential election campaign have included:
Potential Roadblocks To Reform
“Repealing and replacing the ACA is not going to be as easy as turning off a light,” says J.D. Piro, SVP and leader of the Aon Health law group. “There was a full year of intense legislative debate on ACA. It produced a bill that ran over 1,000 pages. It spawned tens of thousands of pages of legislation, over seven years, in an intricate web of interdependent, interrelated laws, regulations mandates and subsidies. It affects employers, providers, insurers, drug manufacturers, governing programs, to name just a few. Achieving consensus on how to amend this Act is not going to be an easy task.”
And while the rollout of the ACA has not been perfect, it has also enjoyed considerable successes that it would be politically risky to jeopardize – especially with Midterm elections in two years. The uninsured rate has dropped from 15.1% in 2010 to 9.1% in 2015, for instance. “There is substantial concern about canceling coverage on 13 million people. You have to look at the impact this might have on the uninsured. Enrolees might need some transition period,” says Piro.
Furthermore, many policy positions may prove to be less workable in practice than they seemed on the campaign trail. This could be the case with selling coverage across state lines. “The practicalities of establishing networks of providers, and getting the network discount that goes along with having those provider networks, may cause problems,” says Willis.
What Do Employers Need To Know?
It’s easy to get lost in the speculation of headlines during a time of political change, and it’s important to understand and anticipate upcoming changes in the law. But it is also important for organizations to ensure that they continue to fully comply with insurance and regulatory requirements as they stand.
As employee benefits for U.S.-based organizations are regulated by federal officials, a change in administration will likely bring policy changes that impact employers. “Companies will need to understand and decipher the issues, while at the same time designing and developing strategies to succeed in the short and long term,” says John Zern, CEO, Aon Global Health & Benefits.
Employers need to be realistic about the speed of the potential change. The number of technical and legislative challenges – and the ambiguity around what will replace ACA, and when – means that for now, firms should take a business-as-usual approach to the employee insurance programs. “It’s important to keep in mind that nothing has happened yet. The ACA is still the law. Compliance is still obligatory” says Piro.
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