AHCA is a starting point for agent-friendly legislation
A newly elected president who campaigned on significant changes to the nation’s health laws assumes office with his party controlling both houses of Congress. No problem, right? In 2009, President Barack Obama may have thought the same thing, but after 14 months and the use of an arcane procedural rule to get around a Senate filibuster, he finally signed the Affordable Care Act into law.
Fast forward eight years, and President Donald Trump and the leaders of the Republican-controlled House and Senate have started down the path of repealing the ACA. On Monday the House leadership unveiled its American Health Care Act, which Speaker Paul Ryan (R-Wis.) dubbed as not just a bill to repeal and replace the ACA, “but to drive down costs, encourage competition, and give every American access to quality, affordable health insurance.”
So far, the plan has been received with, let’s say, mixed reviews. And that’s just among congressional Republicans, and conservative-leaning organizations like Freedom Works and the Heritage Foundation. Sen. Rand Paul (R-Ky.) called the bill “dead on arrival;” Sen. Mike Lee (R-Utah) described it as a “missed opportunity.” Members of the House Freedom Caucus have derided the proposal as being ‘Obamacare Lite’ or ‘Obamacare 2.0.’ Even Health and Human Services Sec. Tom Price seems to have cooled from his earlier hearty endorsement of the plan, describing it later as a “work in progress.”
What does this mean for the proposal, and for health reform in general? And specifically, what does it mean for agents and brokers? Given the initial pushback from congressional conservatives and influential advocacy groups, this proposal is looking more and more like a discussion draft to kick start negotiations rather than a final version that’s ready for a floor vote. And because the leadership is using the budget reconciliation process to work around a potential Senate filibuster, some high priority issues for agents like reforming the navigator program, or removing agent compensation from the medical loss ratio aren’t on the table, since they do not have a direct impact on the federal budget.
In January, Health Agents for America shared our plan to stabilize the insurance market with members of Congress and federal regulators. We are pleased that several of the proposals that we recommended were included in the proposed AHCA: continuing coverage for pre-existing conditions and dependent coverage to age 26; expanding age rating bands from 3:1 to 5:1 to encourage more younger, healthier people to enroll; increasing the annual limit on health savings account contributions; and effectively repealing the employer mandate.
There is much we still don’t know about the plan, since the Congressional Budget Office has yet to release its analysis of the cost and the number of people impacted by the Republican proposal, but there are some things to like for agents and brokers. Allowing dependents to stay on their parents plan to age 26 will add younger consumers to the insurance pool and stabilize premiums. The ACA’s 3:1 age ratio inadvertently punishes younger, healthier people with higher premiums, therefore many do not buy coverage — opting to pay the penalty instead and destabilizing the underlying risk pools. De-fanging the employer mandate would provide enormous relief, particularly for small and mid-sized companies. Employers are being crushed by ACA-related regulations and costs. The regulatory scheme of the 1094 and 1095 form filings are completed by employers exclusively to avoid penalties under ACA, which has driven many employers to reduce their coverages to employees.
Passing the ACA looked like a slam dunk until it wasn’t; repealing and replacing it will likely be just as difficult. As the character George Washington tells Alexander Hamilton in the mega Broadway hit Hamilton, “Winning was easy, governing is hard.”