The Affordable Care Act…will Trump’s Executive Order be a Death Blow?
There had been some thought that the repeal of the Affordable Care Act and a replacement by Congress and the new Trump administration might be delayed or even blocked by Democrats using the filibuster in the Senate. But President Trump’s signing on his first day in office an executive order stating that the U.S. Department of Health and Human Services “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay” parts of the law that would create a fiscal burden on states, individuals or providers suggest that a dismantling of the law could soon begin in earnest. That’s bolstered by budget bills passed in both the House and Senate that could roll back ACA funding on a simple majority vote.
Three Republican Senators have recently introduced bills that could serve as replacements to the Affordable Care Act. Sens. Susan Collins of Maine and Bill Cassidy of Louisiana’s bill would essentially cede the decision to repeal the ACA to individual states (i.e., “if you like your ACA, you can keep your ACA”). Although that bill has received some support from more centrist Republicans, others have criticized it as not being conservative enough.
Sen. Rand Paul of Kentucky has introduced a bill that would repeal the ACA in its entirety. The replacement bill would provide a two-year window for individuals with pre-existing conditions to purchase coverage, allow them full tax deductions on their coverage, and provide a $5,000 tax credit that could be contributed to a health savings account (HSA). The cap on annual HSA contributions would also be lifted. There is also a provision for purchasing pools, and coverage could be sold across state lines. Paul’s proposal has been criticized by some as being too severe.
Such frictions even among Republicans could make repealing the ACA in its entirety difficult. Although the GOP holds a slim majority in the Senate, several states dominated by Republican lawmakers, such as Indiana, Alaska and Montana, have expanded Medicaid eligibility under the ACA. That will put pressure on their members of Congress to keep large parts of the ACA in place.
“Repealing the ACA is going to be a very large undertaking. There’s a lot of rhetoric about the ACA, but the reality is that it will be very difficult to do,” said Michael Strazzella, co-head of federal government relations for the Washington, D.C. law firm of Buchanan, Ingersoll & Rooney. “And there are parts that are very popular.”
Among those popular components are the mandate allowing children to remain on their parents’ health insurance policy until the age of 26. Another popular provision has been that of barring insurers from engaging in underwriting based on an individual’s pre-existing medical conditions.
So, what parts of the ACA will continue on in Americans’ everyday lives, and which parts are likely to go?
David Friend, M.D., a managing director with BDO Consulting in New York, believes that any replacement to the ACA will be vetted as to whether or not it aligns with actuarial soundness. That could mean the premium bands currently being enforced under the ACA (older enrollees currently cannot be charged more than four times what younger enrollees are charged) could vanish. Individuals with pre-existing conditions would still be able to obtain coverage under that scenario, but Friend believes such sales would contain many caveats.
“My sense is that they will sell you insurance but charge you a fortune,” he said. Friend added that children would still also be allowed to stay on their parents’ policy, but that premiums for that service would rise as well.
“You will have access to insurance,” Friend said. “In theory, everyone has access to a $10 million apartment in New York – if you can pay for it.”
Harry Nelson, a Los Angeles healthcare attorney who has just co-authored a book on the pending Affordable Care Act transition (“For ObamaCare to TrumpCare: Why You Should Care”) believes that the GOP will be most likely to retain the underwriting reforms and the coverage for children. “I see that as the fundamental architecture,” he said, adding that both components were part of a plan released last year by House Speaker Paul Ryan.
But Nelson believes that a lifetime dollar cap on benefits to policyholders may return. “If Ryan has his way, it will come back,” he said.
Medicaid expansion – which has covered an additional 20 million Americans – appears likely to stay on the books, but how it is paid for could change. “It doesn’t seem politically likely that the states are going to be prepared to have people return to the misery (prior to the enactment of the ACA),” Nelson said. But considering that Medicaid expansion has been occurring primarily in states with large proportions of Democrats, the program is politically ripe for some sort of financial reform. The federal funding for Medicaid may be cut, or the program may revert to block grants, which has been floated by many leading Republican politicians and lawmakers – even though some policy experts have warned it is a slippery slope toward eroding the number of people covered through the program.
“Those states will have to find some funding mechanism,” Nelson said. That likely would be in the form of new taxes, or using block fund grants to create some form of self-insurance for its lower-income residents.
As for a holistic view as to what the ACA will look like in several years, no one is yet willing to make bold predictions.
“What the overall net change to the Affordable Care Act will look like is still too soon to tell,” Strazzella said. “The crystal ball is just way too foggy.”
