ACA Watch | January 10, 2017

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ACA Watch | January 10, 2017

ACA Watch January 10, 2017

Repeal of the Affordable Care Act (ACA) Begins

The repeal of the Affordable Care Act begins as Republicans move forward with a Budget Resolution bill.

The Senate Budget committee released a budget resolution bill calling on ACA-related House and Senate committees to submit legislative plans to repeal the ACA by January 27, 2017.

The process of budget reconciliation will allow Republicans to repeal major sections of ACA via a simple majority vote, with a 50-hour limit for debate on the topic. After the debate, an unlimited number of amendments may be offered. Voting will tentatively begin tomorrow afternoon, January 11.

Pros of Repeal

The House Energy and Commerce Committee warns of the negative consequences resulting since Obamacare was implemented, issuing a series of new infographics illustrating how the ACA has failed U.S. citizens. The Committee emphasizes that overall health plan prices have increased. Meanwhile, plan options have decreased, with less consumer choice in health care plans.

The cost per ACA enrollee was roughly $1,000 more in 2014 ($3,128) and 2015 ($3,328), than the 2010 projections for 2014 ($1,674) and 2015 ($2,463).  This has caused major insurers to lose revenue and offer less-robust options.

Average deductibles and maximum out-of-pocket costs for individual coverage, among individual Silver plans and group plans alike, have increased since 2014.

State marketplace insurance co-ops took a beating in 2016, with many failing after a series of mergers. A staggering 1,022 counties have only one insurer this year, and 1,120 counties have only two insurers for 2017.

Cons of Repeal

On the other hand, repealing the ACA would add an estimated $150 to $350 billion to the federal deficit, according to a new report by the Committee for a Responsible Federal Budget.

On an individual level, the number of uninsured people would increase by 23 million. The Urban Institute also estimates that the number of uninsured could increase by 30 million more by 2019. Consequently, the Institute found that ACA repeal would result in $1.1 trillion in costs for uncompensated care for state and local government and health providers.

Republican Replacement Plan

The Republican Study Committee (RSC) has released a brief fact sheet outlining its ACA replacement plan, intended to be effective on January 1, 2018.

The American Health Care Reform Act would potentially:
•    Convert tax deductions into a standard deduction for health insurance (SDHI), applying to those insured by employer-sponsored health insurance as well as insurance purchased by the self-employed
•    Expand HSA access and allowable expenses, and increase the maximum annual HSA contribution limit
•    Expand federal support for state high-risk pools to $25 billion over 10 years, capped at 200% of average state premium
•    Reform medical liability law
•    Encourage a more competitive health care market

A House Divided

Several Republican Senators – including Senators Susan Collins (R-ME), Rand Paul (R-KY), Tom Cotton (R-AR), and Bob Corker (R-TN) have suggested postponing an ACA repeal until the GOP has a more comprehensive replacement plan. Popular ACA provisions are sought to be preserved in a replacement plan, but the GOP is unable to agree on how to pay for them.

In contrast, Senate Majority Leader Mitch McConnell (R-KY) would not say whether everyone covered by the ACA would still have health coverage under the GOP’s proposed plan. According to the Wall Street Journal (subscription only) McConnell provided no details regarding a timeframe for the new healthcare system. “We will be replacing it rapidly after repealing it,” notes McConnell.

Fox News and the Wall Street Journal (subscription only) report that after many years of trying to dismantle Obamacare, some GOP members are eager to do so, while others have increasing concerns about its feasibility. House and Senate lawmakers face a growing division in their ranks. As Tom Cotton (R-AR) said, “I don’t think we can just repeal Obamacare and say we’re going to get the answer two years from now. This is a very complicated problem.”

Complicating plans further, Republicans face the dilemma of how to recoup the revenue generated by the ACA’s taxes and penalties. Additionally, funds will be needed for transition costs to complete the implementation of a replacement plan.

Industry Concerns

Mental health & addiction advocates have voiced concerns.  As lawmakers sort out ACA changes, providers and their patients undergoing treatment for mental health disorders and addiction are concerned about how they will maintain mental health and sobriety during a lapse in insurance coverage. The federal Substance Abuse and Mental Health Services Administration cites that, of those who gained coverage as a result of Medicaid expansion, 30% have a mental disorder and/or an addiction to substances.

More broadly, the medical industry as a whole is on-edge. AP reports that hospitals and insurers are concerned about the wake of a GOP replacement plan, warning Congress that this uncertainty will impact their industries.

As a long-time member of the Employers Council for Flexible Compensation (ECFC), Employee Benefits Corporation will continue to provide ACA Watch updates as legislation continues to evolve.

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