The Impact of the Election on the Affordable Care Act (ACA) & the Future of Healthcare
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This reviews the presidential election results and the likely legislative consequences to follow on the future of healthcare and the ACA. This is a quick overview of our Nov. 2016 Webinar featuring your boots on the ground in Washington, The Council’s Government Affairs Team, Joel Wood and Joel Kopperud, who recapped the November 8th election, including the Presidential and key House and Senate races. Key Messages from this Webinar include: - A summary of President Elect Trump’s stated positions on healthcare - The possible paths to repeal - What a replacement plan might look like - The potential timeline for change - And what Employers should do now Please contact The Partners Group with any additional questions you may have: https://www.tpgrp.com/about-us/contact/ or 800-722-6339. Employers have a lot to keep up with and The Partners Group wants to be your trusted resource for benefits information. We are committed to keeping you well informed on topics including: - News - Compliance - Benefit Trends - Upcoming Webinars Following the election, there is guaranteed to be more information that we will continue to help you sift through, understand and take action on. Subscribe to our newsletter to receive updates: https://www.tpgrp.com/subscribe/.
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The Impact of the Election on the Affordable Care Act (ACA) & the Future of Healthcare
- 1. After the Ballots are Counted: Election 2016 RecapWebinar Joel Kopperud VicePresident Government Affairs Joel Wood Senior VicePresident Government Affairs
- 5. Exit Polling: Demographics Trumpexceeded expectationsinseveralkeydemographicswhileClinton underperformed: VotingBloc Trump‘16 Clinton‘16 Obama‘12 Romney‘12 Black 8% 88% 93% 6% Hispanic 29% 65% 71% 27% Female 42% 54% 55% 44% Male 53% 41% 45% 52% White Female 53% 43% 42% 56% WhiteMale 63% 31% 38% 62% Veterans 61% 34% 39% 59% White CollegeGrad 49% 45% 42% 56% White Non- CollegeGrad 67% 28% 36% 61% Millennials 46% 54% 60% 37%
- 12. Budget among many lame duck priorities October 12, 2016 | Katharine Conlon Source: National Journal Research, 2016. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 ■ Senate in session ■ Both chambers in session November December House 16 Days left in session Senate 20 Days left in session Other possible congressional priorities in the lame duck session Criminal justice reform: Sentencing Reform and Corrections Act of 2015 may be voted on by the end of the year Energy: Water Resources Development Act to be revisited during lame duck session International trade: congressional vote on TPP to happen after November election LGBT rights: Rep. Maloney (D-NY) expected to reintroduce anti- discrimination amendment Mental health reform: congressional consideration of Mental Health Reform Act of 2015 expected this fall Current continuing resolution expires Dec. 9th Congress leadership election process is expected to take place within the first few weeks after the election
- 13. Health care reform: what will Trump do? Repeal and replace scenarios for 2017 Will it pass? Totalrepeal • Unlikelyintheshortterm–the2017marketsareenrollingandpremiumsareset.2018wouldbetheearliest theACAcouldberepealed,andasuddenlossofhealth insuranceformorethan20millionpeoplewouldbe politicallydamaginginthefuture STOP Defund • AsdefundingwouldcrippletheACA,legislationimmediatelyremovingfundingwouldlikelynotpassbecauseit wouldbetoosignificantofadisruptiontothehealth insurancemarket.Additionally,lastyear’sHousebillthat defundedtheACAincludedatwo-yeartransitionperiod,andlawmakerswouldlikelyincludeitagainiftheyopt totakethisapproach Replace:with what? Themarketplacesandassociatedsubsidies:shuttingdownmarketplacescouldtakeawayinsuranceplansandraisepremiums,whichwouldlikelybe politicallydamaginginthefuture • Medicaidexpansion:GOPcouldconvertMedicaidexpansiontoblockgrants • Removalof<26year-olds’righttoremainonparents’plan:provisionislikelytoopopulartorepeal • MedicalDeviceTax:CouldberepealedastheGOPseesthetaxasstiflingtoinnovation ? • RepealoftheCadillactax:“ABetterWay”agendaalsoproposesacapontaxexclusionforplans ? • RepealofIndividualmandate:likelywouldneedaGOPsupermajoritytorepealtheindividualmandate • Preexistingcondition:Politically,thiswouldbehardfortheGOPtopass ? • 10essentialbenefits:areplacementplanmaycutdownoninsuranceregulations ? • ? ?
- 14. Trump adopts Ryan's ideas into his health policy agenda Health CareProgram Trump Affordable CareAct(ACA) O Repeal& replace with health savingsaccounts(HSAs) Prescriptiondrugprices P Lowerbarriersto marketentryandto tradeto allow drugmakers from overseasto sellin the U.S. Medicaid expansion ? Unclear, Trumpproposesstate block-grantsforMedicaid Medicarebuy-in ? Unknown, Trumppromisedto improveMedicarebymaking “the countryrich” Publicoption O Doesnot support Mental healthparity P Supportscurrent reform planinCongress Provider pricetransparency P Requiretransparency from doctorsandhospitals Saleof healthinsurance acrossstatelines P Allow health insurance to be sold acrossstatelines Implement high riskpools P Work with states toimplement high risk pools Details on Trump’s platforms on health care
- 15. Trump promises to repeal Obamacare Donald Trump’s promises for the first 100 days Broaderlegislative that Trump will pushinCongress Middle ClassTaxReliefAct “An economic plan designedto grow the economy 4%per year and create at least 25 million new jobs through massivetax reduction and simplification, in combination with trade reform, regulatory relief, andlifting the restrictions on American energy.” AmericanEnergy& InfrastructureAct “Leverages public-private partnerships, andprivate investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years.It is revenue neutral.” SchoolChoiceand EducationOpportunityAct “Redirects education dollars to give parents the right to send their kid to the public, private, charter, magnet,religious or homeschool of their choice. Endscommoncore, brings education supervision to local communities.” RepealandreplaceObamacare “Fully repeals Obamacareand replacesit with Health SavingsAccounts.” EndIllegal ImmigrationAct “Fully-funds the construction of awall on our southern border with the full understanding that the country Mexico will be reimbursing the United Statesfor the full cost of suchwall; establishes a2-year mandatory minimum federal prison sentence for illegally re- entering the U.S.after aprevious deportation.” 8. Restoring CommunitiesAct “Reduces surging crime, drugs and violence by creating aTaskForceOnViolent Crimeandincreasing funding for programs that train and assistlocal police; increases resourcesfor federal law enforcement agencies andfederal prosecutors to dismantle criminal gangsand put violent offenders behind bars.”
- 17. Repealandreplace–withwhat? • Buyingacrossstateborders • Associationhealthplans • Medical malpracticereform(really? Trump?) • HSAs
- 18. Repealandreplace–withwhat?,cont.: • Off-rampforexchanges… tohigh-riskpools? • RyanhealthcareBlueprint –taxthe1%? • Individual marketpremiums taxdeductible • Medicaid blockgrants–roll backcoverage?
- 19. Health Insurance Coverage In 2016 For People Under 65
- 20. Primary Drivers To The Employer-Provided Group Platform: • Pre-tax treatment of both employer and employee paid premiums • Ease of distribution from carrier perspective • Expectation by employees that good employers will provide benefits
- 21. Largest Tax Expenditures, FY 2014 $164.2B Exclusion of employer health insurance $162.7B Exclusion of employer pensions $99.8B Mortgage interest deduction $76.2B Exclusion of Medicare $71.4B Capitalgains rates $58.4B EarnedIncome Credit $51.6B Deduction ofcharitable contributions
- 22. 7. Tax Fairness at Work: For the first time, the federal government will give everyone the same tax relief for health insurance, regardless of where it is obtained– at work, in the marketplace or in an exchange. Employees will not be able to double dip, however. Other tax relief, such as the ability of an employer to purchase insurance with pre-tax dollars, will be clawed back or topped up to the tax credit amount.
- 23. So, for employers, let’s recap: • No exchanges/off-ramp in 2018? • No mandates • No reporting requirementsfor mandates • No Cadillac tax • No reporting requirementfor Cadillac tax • No otherACAtaxes – HIT/medical device
- 24. Recap, cont.: • Cap on employer-provided health benefit? • Tax credit for purchase of health insurancefor all? • Expansion of HSAs – pre-tax contributions in individual market
- 25. What otherkinds ofreg reform? • Rollback of fiduciarydutyrulefor investment advisors? • Jointemployer requirements(McDonalds case) overturned? • Overtime regulations – tension between populist vs. Republican agenda?
- 26. • The Department of Labor announced on May 17th a final rule raising the minimum salary threshold required to qualify for FLSA “white collar exemption” from $23,660 to $47,476 • The DoL is instituting an “automatic update” for the salary threshold to occur every three years beginning in 2020 Department of Labor FinalOvertime Rule • The final rule will allow up to 10% of the salary threshold to be met with nondiscretionary bonuses, incentive payments, or commissions that are paid quarterly or more frequently • The final rule did not change the current job-duties-related tests • The final rule will go into effect on December 1st, 2016.
- 27. After the Ballots are Counted: Election 2016 RecapWebinar Joel Kopperud VicePresident Government Affairs Joel Wood Senior VicePresident Government Affairs
Editor's Notes
- This reviews the presidential election results and the likely legislative consequences to follow on the future of healthcare and the ACA. This is a quick overview of our Nov. 2016 Webinar featuring your boots on the ground in Washington, The Council’s Government Affairs Team, Joel Wood and Joel Kopperud, who recapped the November 8th election, including the Presidential and key House and Senate races. Key Messages from this Webinar include: A summary of President Elect Trump’s stated positions on healthcare The possible paths to repeal What a replacement plan might look like The potential timeline for change And what Employers should do now
- One Month After the Election: Americans continue to be divided along partisan lines over the future of the Affordable Care Act Newly released Kaiser Family Foundation Poll finds-- Only 26% of American’s support a complete repeal of the Affordable Care Act.
- What will replace Repealed Provisions of the Affordable Care Act? As we speak, there is a tremendous amount of discussion about what would replace repealed provisions of the Affordable Care Act. To get the most likely view of what a replacement plan might look like, there are three plans to understand: Orrin Hatch’s plan Paul Ryan’s plan Newly appointed HHS Leader Tom Price Replacement Plan: Different plans Each build on the current employer sponsored system Directionally align to promote consumerism and marketplace competition The Partners Group will continue to stay close to the conversations happening in Washington DC and share meaningful and relevant news with you as a replacement plan begins to take shape.
- President Elect Trump’s Policy Position on Healthcare* which Includes… Requests on Congress to act immediately when he takes office to fully repeal the Affordable Care Act Repeal Individual Mandate Modify existing laws to allow the sale of health insurance across state lines Allow people to deduct premiums for individual health insurance plans Expand the tax benefits of Health Savings Accounts Require price transparency Block grant Medicaid to the states Pharmaceutical reforms to allow consumers to access imported drugs from overseas *Taken from President Elect Trump’s Website
- The Possible Paths to Repeal: Under republican control of both chambers, what will Congress do when President Trump takes office in January? The truth is, we don’t yet know. We likely won’t know until we actually see it play out in DC beginning in January. But there is a lot of speculation coming out of DC about what will likely happen. Republicans will not have the required 60 vote super majority to avoid a likely Democratic filibuster against any repeal effort. A tactic that may be used to repeal parts of the law and avoid the threat of a filibuster with just a simple majority is Budget Reconciliation Reconciliation allows for expedited consideration of certain tax, spending, and debt limit legislation. In the Senate, reconciliation bills aren’t subject to filibuster and the scope of amendments is limited, giving this process real advantages for enacting controversial budget and tax measures. Using budget reconciliation to repeal parts of the Affordable Care Act, means provisions such as… The individual mandate The employer mandate Cadillac Tax Medicaid expansion Most vulnerable to repeal This leaves the more popular market reform provisions possibly intact like coverage to age 26 for dependents, full coverage for preventive care, and the rules that don’t allow lifetime limits or coverage limitations on pre-existing health conditions
- What is the Timeline? The repeal of mandates may come quick Replacement plan may take longer Implementation of a replacement plan could take years ACA passed in 2010 with major provisions taking effect nearly four years later We will continue to keep you informed as meaningful information is made available. Subscribe to newsletter for updates.
- In the Meantime, What Should Employers Do? For now, stay aware of what is likely but act on what is known Ways to stay informed include signing up for our weekly newsletter. Attend The Partners Group hosted webinars. And staying well connected to your team at The Partners Group For now, ACA remains law, but as things change you can count on us to keep you well informed. If you have any questions about how potential changes of the Affordable Care Act impact your employer sponsored plan, please let us know. If you’re not a client, simply contact us using the link provided. We look forward to being a resource to your business.