No matter your political affiliation, most benefit advisers have come to accept the Affordable Care Act as the law that all Americans and employers must live with and abide by. With ACA compliance in full effect and more mandates kicking in throughout the next several years, working with and around the ACA is business as usual these days. But what might happen to the law if Republicans assume both majority of Congress and the presidency during the 2016 election? What if they dont?
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A new perspective published in the New England Journal of Medicine by Henry Aaron, senior fellow at Washington-based Brookings Institution and PhD in economics with a health care focus, outlines those two scenarios.
If Republicans win the presidency and gain traction in Congress in 2016, Aaron says its still unlikely a full repeal of the ACA will happen. Thats because the popular parts of the law such as insurance market reforms, subsidies for enrollment on public exchanges and incentives for employers to provide affordable health coverage will have been in effect for several years. Additionally, approximately 37 million people will be covered on the exchanges by 2017 and thus lose coverage, something Aaron says wont be good for any politician, and finally, repeal would cut into the sales and profits of health care providers.
What is likely to happen in this scenario, Aaron says, is a scaling back of the ACA. It would cut affordability subsidies and weaken the penalties for people who remain uninsured. It would also cap Medicaid spending, regardless of increases in health care costs, he writes about the plan Republican senators put forth in January, which is a hint at what the party actually thinks it can accomplish in 2017 if the political climate is favorable. [Also,] Congress could authorize each state to curtail or reject certain elements of the ACA.
If, after 2016, Democrats still have the balance of power in Washington, changes to the ACA will be more on the technical side. Aaron says the first likely change will be to the calculation of what constitutes affordable employer-sponsored coverage. Right now, coverage is deemed affordable if worker premiums are less than 9.5% of household income, even for workers with dependents whose premiums are higher, he writes. While this is a quick fix in language, the change cant be made right now with many Republicans only supporting full repeal.
Another more technical change is to a persons ability to receive subsidy increases or decreases throughout the year. Right now, if a person covered on a public exchange health plan sees their income decrease, and theyre thus owed a refund because their subsidy went up, they wont see that money until their next years tax return. Conversely, theyll owe money the next year in taxes if their income increases. This is due, Aaron says, to the Internal Revenue Service serving as the agency of subsidy implementation. The IRS simply works on a yearly schedule.
The title of Aarons piece Here to Stay reflects his assertion that no matter the scenario after the 2016 election, the ACA will remain the law, with varying adjustments made depending on the party in power.
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