February 27, 2017
Details of the leaked plan
Health care reform remains a topic of discussion today after Politico (subscription required) released a leaked draft of a budget reconciliation bill to repeal provisions of the Affordable Care Act (ACA) last Friday. While the draft of this Republican bill is two weeks old, and expected to undergo changes before moving to a vote; the leaked text opens the door to key insights as to where the ACA is headed.
That said, some of the items addressed in the alleged draft version include getting rid of: the ACA’s taxes, subsidies, individual mandate for health insurance, requirements for essential health benefits, the Public Health Fund (in 2019), and Medicaid expansion (phased out by 2020). A $100 billion state innovation grants program would be established to assist high-risk enrollees. ACA subsidy tax credits would be based on age instead of income.
In the tax-advantaged benefits arena, notable changes in the leaked draft include: repealing the prescription requirement for using a tax-advantaged plan to purchase over-the-counter medicines, lift the annual cap for flexible spending account (FSA) salary reduction, and improve health savings account (HSA) features in a similar manner to the Hatch/Paulsen bills.
The draft referred to implementing a cap on the employer exclusion of health insurance based at 90% of the plan’s actuarial value, taxable via income and payroll. This would help to pay for the other ACA changes specified by the bill.
However, capping the employer exclusion is anticipated to eliminate many of the benefits of employer-sponsored insurance, with the loss of group purchasing efficiencies, effectively getting rid of an incentive for employers to offer insurance to employees. (NAHU)
Last week, Republican lawmakers throughout the country were heckled by citizens at town hall meetings. Some protesters in support of the ACA demanded that legislators back down from plans to repeal the ACA.
New polls suggest that support for the ACA is growing. A Pew Research Center survey from February 7-12 found that 54% of Americans surveyed support the ACA, with 43% disapproving. A Kaiser Family Foundation poll from last week showed a 48% ACA approval rating, with 43% disapproval. The two polls resulted in the highest approval rating ever recorded, and the widest margin of support since 2010, respectively.
Under the radar chatter
“Not everybody is going to have health care — some people just don’t care enough about their own care,” said Representative Dennis Ross (R-FL). Ross and other Republican lawmakers indicated that their ACA replacement plan will result in fewer Americans having health coverage.
Other details of the replacement plan have come out of the woodwork via remarks of Republicans interviews, as well as anonymously by certain aides of lawmakers, according to BenefitsPro. The replacement plan would reportedly eliminate the individual mandate to have health coverage, replacing it with a set of rules that would penalize and/or impose higher premiums on those who chose not to buy insurance but ended up needing health care at a future date.
Insurers would be allowed to charge more to anyone for any reason, including pre-existing conditions or coverage gaps. This intends to create incentives for people to maintain health coverage without formally mandating it.
The assertion that fewer Americans would have health coverage contradicts earlier statements from President Trump. “We’re going to have insurance for everybody,” he told the Washington Post, last month.
Trump will address Congress on February 28, so it remains to be seen if any additional details on the GOP ACA Repeal and Replacement plan will become available this week.
ACA opponent and former Republican House Speaker, John Boehner, spoke out about the current Republican efforts to repeal the ACA, last Thursday. (CNN) “They’ll fix the flaws and put a more conservative box around it. The framework is going to stay there.”
Time will tell what strategy emerges next.
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.
Along with other ECFC representatives, Employee Benefits Corporation will attend Capitol Hill meetings with legislators to advocate for tax-advantaged benefits. This year’s ECFC Conference falls at a critical juncture for health care reform, March 8-10.