Changing the Affordable Care Act will likely be a priority under the new Administration in 2017. Following more than a year of calling for the repeal and replacement of Obamacare, President-elect Donald Trump will have the opportunity to take his case to a Republican-controlled Congress that has also advocated changing the landmark legislation.
Declining competition as some insurers began pulling out of state-run exchanges this year as well as the announcement of significant premium hikes has fueled momentum in recent months for some form of overhaul. The ACA currently insures some 20 million Americans.
Congress passed legislation earlier this year to drastically change the law, but President Obama vetoed the bill. This bill, in conjunction with recommendations in the GOP’s “Better Way” policy on its platform, could be used as a blueprint in the new Congress to move forward.
Here are five items that could be part of a plan to overhaul the ACA:
1. Repeal of taxes associated with the health-care reform law. Several new taxes were introduced as part of the ACA. Changing the law would likely include repealing these taxes, including the 3.8% Medicare surtax on net investment income, the additional 0.9% Medicare payroll tax on high earners, the 2.3% excise tax on medical devices, and the 40% excise tax on “Cadillac” health plans.
2. Lift restrictions on insurance product requirements. Proposals have called for lifting the requirement that health insurance companies include “essential health benefits” in all offerings. In addition, certain underwriting standards may be softened to provide insurance companies with more flexibility around pricing and plan design.
3. Eliminate mandates and penalties. Among the overhaul ideas has been to repeal the federal mandates requiring individuals and employers to obtain or provide health insurance.
4. Reform the insurance market. An overhaul may call for the elimination of the federal health-care exchange and easing of restrictions to allow health insurance to be sold across state lines.
5. Replace the current subsidy system. Subsidies to help individuals purchase health-insurance could be changed to a refundable tax credit, with any unused amount of the tax credit contributed to an individual’s Health Savings Account (HSA).
Even with comprehensive reform, certain popular provisions from the ACA may remain, for instance, those with pre-existing medical conditions will not be denied coverage, and dependents up to age 26 may be allowed to stay on their parents’ health-insurance plan.
Because the ACA overhaul is a priority of the new Administration and Congress, it will likely be near the top of the agenda for the “first 100 days.” Still, the ACA was far-reaching in its scope, and it will be a challenge to overhaul while not disrupting the current marketplace or leading to lapses in coverage for millions of people. Any full-scale reform will probably have to be phased in over a number of years. Even though Republicans control the White House and Congress, it does not guarantee a smooth legislative path to reform.
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