On January 20, 2017, Donald J. Trump will be sworn in as the next President of our nation. Next year, Republicans will have the majority in the House of Representatives (238 Republicans, 191 Democrats) and the majority in the Senate (51 Republicans, 47 Democrats). On November 14, 2016, House Republicans unanimously renominated House Speaker Paul Ryan, therefore, it is expected that the Republican House will likely work to pass legislation that follows the healthcare policies in Speaker Ryan’s “A Better Way” proposals.
It is important for employers to understand the policies expected to be put forth by the Trump Administration and how they will impact employer sponsored health and welfare benefits. Since 2010 when Republicans took control of the House of Representatives, Republicans have held more than 60 votes to repeal the Patient Protection and Affordable Care Act (“ACA”). Republicans in Congress have been unable to agree on their “repeal and replace” plan, therefore, it is difficult to know exactly what the next four years will bring.
With that being said, President-elect Trump, during an interview with the Wall Street Journal, has already pointed to two aspects of the ACA that he wants to keep: the ban on pre-existing conditions baring someone access to insurance coverage and the ability of young adults to stay on their parents’ plan until they reach the age of 26. It remains to be seen what this means for the future of healthcare reform in this country and whether Congress expects to change aspects of the pre-existing condition ban by forcing those with pre-existing conditions into a high risk pool or whether the current pre-existing condition policy will continue.
One of the top priorities of the Trump Administration, according to the President-elect’s campaign website, is to repeal the individual mandate that currently requires individuals to pay a penalty if they are without health insurance for more than two months. Without an individual mandate and with the continued pre-existing condition exclusion provision, individuals may be more inclined to wait until they are ill in order to acquire insurance, which would likely cause an increase in premiums and could continue potential issues for the insurance market.
In addition to repealing the ACA, President-elect Trump has also provided the following as policy initiatives, with respect to healthcare:
- Modify existing law that inhibits the sale of health insurance across state lines. Any vendor would be able to offer insurance in any state, provided the plan complies with the state’s requirements. President-elect Trump suggests that by allowing full competition in the market, insurance costs would be expected to go down and consumer satisfaction would rise.
- Allow individuals to deduct health insurance premiums from their tax returns. President-elect Trump’s reasoning behind this policy is that because businesses are able to make deductions for health insurance premiums, individuals should also be allowed the same tax benefit.
- Allow individuals to use health savings accounts (HSAs) in a more robust way than regulation currently allows. His proposal specifically mentions allowing HSAs to be a part of an individual’s estate and allowing HSA funds to be spent by any member of the account owner’s family.
- Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. President-elect Trump’s policy suggests that individuals should be able to shop to find the best prices for procedures, exams, or other medical-related procedure.
- Block-grant Medicaid to the states. This would remove federal provisions on how Medicaid dollars can and should be spent by the states. President-elect Trump’s policy suggests that states will have the incentives to seek out and eliminate fraud, waste, and abuse without federal overhead.
- Remove barriers to entry into the free market for the pharmaceutical industry. This includes allowing American consumers access to imported drugs.
Some important initiatives in Speaker Ryan’s proposal include allowing small businesses the opportunity to offer “association health plans” by allowing these groups to pool together and improve bargaining power and ensure that self-insured employer sponsored group health coverage has access to stop-loss coverage that is not classified as group health insurance. Speaker Ryan is also expected to remove ACA’s Cadillac Tax.
Although many of President-elect Trump and Speaker Ryan’s policies revolve around either repealing the Affordable Care Act entirely or keeping portions of the law and improving the law, due to the nature of the dynamics in Washington D.C., we simply do not know or fully understand the ramifications of some of these policies and how they will affect employer sponsored plans.
The Trump Administration has not given any indication as to whether a full repeal or a repeal and replace would be their preferred method to improve healthcare. Although President-elect Trump has recently indicated he plans to keep two important provisions of the ACA, he has not provided any more information on what we can expect from the suggested policy.
Although portions of President-elect Trump’s initiatives remain unclear, with a Republic-controlled House and Senate, if lawmakers are able to reach an agreement, some level of change is expected.
Innovative Benefit Planning, LLC plans to continue updating this blog as more information is provided by President-elect Trump and Speaker Ryan on their policy initiatives.
