This week's kaleidoscope of Affordable Care Act options raises more questions than it offers answers. Since the election, the simple concept "repeal and replace" has morphed into something more complex, with the GOP leadership coalescing around repeal of the Affordable Care Act in 2017 but having an effective date of 2020, well after the 2018 midterm elections and at the start of the next round of presidential campaigns. However, actual repeal requires 60 votes in the Senate, a goal that appears illusory; therefore, "repeal" would come in the form of a budget reconciliation package that removes the money-related elements of the ACA:
- Elimination of the big four mandates (individual, employer, excise tax, medical device tax);
- Phased out funding subsidies for lower and middle-income individuals;
- Phased out Medicaid expansion; and
- Restrictions on the federal government operating health care exchanges.
All of the above was in the reconciliation package put on President Obama’s desk in 2015 with a two-year delayed effective date. There it received the expected veto, but this time it is for real—hence the three-year delay. During those three years, as the "replace" part of the equation is developed, how will the already flawed ACA scheme be further destabilized and how will that impact your company? Being in the exchange marketplace for carriers is already a questionable business opportunity because the taxpayer subsidies are insufficient. Will Congress respond by further taxing self-insured plans to provide affordable coverage to those outside employer plans? Vice President-elect Pence said yesterday that Trump will work with Congress “to move fundamental tax reform," including a 15 percent corporate tax rate. If your company could get that rate by allowing taxes to be raised on your self-insured plan, would it agree? What if the tax hike was sweetened by positive regulatory changes and greater transparency mandates? Ideas like this are under discussion by policymakers. In the coming weeks, we will be working to identify the consequences of the expected repeal/replace plan and its impact on self-insured employers.
