From the future of the Affordable Care Act to how to control soaring pharmaceutical costs, health care is one of the biggest issues in this year’s election. The US spends more on healthcare than other high-income nations but for less effective care, according to reports. Both Democrats and Republicans are pushing for reform. But when it comes to the specifics of these reforms, Democrats and Republicans agree on very little.
During the Democratic primary, Bernie Sanders made a big push for universal healthcare earlier. Hillary Clinton’s approach, however, has been more cautious. Of all the candidates this cycle, Clinton is most closely aligned with the Affordable Care Act. She’s acknowledged that the current system is flawed and proposed a series of tweaks to reduce out-of-pocket costs for individuals and families. While not as far left as Sanders, Clinton did go so far as to offer a “public option” by allowing people the opportunity to buy into Medicare. Her goal is to “build on the Affordable Care Act and continue our march toward making sure every single American has health coverage,” according to her Twitter.
Donald Trump, in line with the Republican platform, is calling for an end to Obamacare. Trump’s replacement plan hinges on deregulation and opening the free market to allow purchasing across state lines and more health savings accounts. His stated goal is “maximum choice and freedom for the consumer” by ending Obamacare and replacing it with “something terrific, for far less money for the country and for the people,” according to his Twitter. This aligns with the Republican Party platform championed by House Speaker Paul Ryan. Ryan focused on implementing health savings accounts, eliminating Medicaid expansion, and selling health plans across state borders.
The Affordable Care Act (ACA) and Health Insurance Mandates for Business Owners: Where Do We Currently Stand?
No matter your individual political leanings, if you lead a business, it’s critical that you understand how changes to the political landscape could impact employee sponsorship of health benefits. As it currently stands, ACA compliance isn’t easy. Full-time employee status documentation can be difficult for employers with seasonal employees or employees who do not work consistent hours within the “Look-Back” method measurement or “Stability Period”. ACA regulations amended The Employee Retirement Income Security Act of 1974 (ERISA), adding an additional paperwork layer of plan documents and notices.
Small business owners face an additional challenge. The ACA only mandates that businesses with 50 or more full-time employees offer health care coverage, which means businesses with fewer full-time employees may offer benefits at their discretion. These small business owners must weigh whether it is in the best interest of the business and their employees to offer group health insurance coverage. Currently, small groups have five main options for health insurance: individual insurance (with or without defined contribution allowance), SHOP Marketplace, private exchange, co-operative, and private small group plan.
Weighing the pros and cons of offering health insurance – or, which level of coverage if your business is mandated to do so – is not easy. And depending on which party wins the White House or controls Congress in the coming year, changes for individual and business mandates could be underway.
Will a Republican-led White House and Congress eliminate the individual mandate from the Affordable Care Act? Will a Democratic victory in November mean an expansion of Obamacare? And what about the so-called “Cadillac Tax”, a planned excise tax levy of 40% on high-cost health-benefit plans provided by employers to their employees?
Congress and Obamacare: How Does Control Affect Reform?
While much of the attention this election cycle is focused on the presidential race, a shift in which party controls Congress could have an equally significant impact on healthcare reform. While Republicans currently hold the largest majority in 90 years in the House of Representatives, a diversity of views within the party means that the leadership at times will struggle to maintain control. With few competitive seats in the House of Representatives, Republicans are likely to maintain their majority. In the Senate, however, Democrats are positioned to do well. Democrats must only defend 10 seats while Republicans must hold onto 24. Should Republicans maintain control over both the House and Senate, this will stymie continued Democratic reform efforts, even if Clinton wins the White House.
The budget process may be one avenue for Republicans to seek a full ACA repeal. Possible elements of the repeal and replace proposal include removing the individual mandate and employer mandate.
Potential reforms include the following:
–Allow insurers to charge more than ACA’s 3:1 ratio based on age
–Expand the availability and usage of health savings accounts (e.g., contributions beyond age 65, spousal contributions)
–Limit or eliminate tax excludability for employer-sponsored coverage
–Premium tax credits for people without employer-sponsored coverage
–Eliminating the employer mandate to provide coverage while adding the premium tax credit for individuals without employer-sponsored coverage could dis-incentivize employers from offering coverage.
Changes at the State Level
However, even with Republicans in the majority, it is unlikely they will hold enough seats – or maintain sufficient party unity – to completely repeal and replace Obamacare. The most likely outcome: continued gridlock in Congress means no comprehensive tax reform is enacted. Instead, more authority devolves to the states as Republicans allow the states to become “laboratories of experimentation.”
Regardless of the presidential election outcome, the biggest changes for health care coverage in 2017 may actually occur at the state level. The next article in this series explores how action by the state could influence employee-sponsored health benefits.
Scott Foster is President of Wellco. Scott and Wellco have provided award-winning systems to measurably improve health conditions and costs. Wellco specializes in engagement, metrics, integration and high-value care. For more information visit, www.Wellcocorp.com
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