ACA
Are you confused about what the 2017 Republican tax bill might mean for the Affordable Care Act( ACA), aka Obamacare? If so, you are not alone. While the bulk of our national health plan remains intact, a provision in the bill that repeals the individual mandate to purchase health insurance may cause profound changes for the ACA’ s future.
The new law effectively says that beginning in 2019, penalties for not purchasing coverage will be reduced from several hundred dollars to zero. Portions of the ACA that remain intact include coverage for individuals with preexisting conditions, premium subsidies for lowerincome earners, and expanded coverage through Medicaid.
Most economists agree that by allowing individuals to opt out of purchasing healthcare insurance, the healthcare marketplace plans will skew towards less healthy populations. Without the base of premiums provided by relatively healthy individuals needing minimal care, these plans will lack the resources needed to pay for services to highconsuming individuals. The result, economists conclude, will be starkly higher premiums, coverage declines, or a combination of the two. Even large insurance companies may face difficulties in being able to fund such an unbalanced plan.
With the expected rise in premiums, even more people will be forced to opt out of the marketplace plans, leading to a greater number of uninsured— further defeating the purpose of“ a national plan.” As more and more people drop out of coverage, only the least healthy may remain, driving
The Future of the
ACA
BY DAVID WEISS
premiums even higher and perpetuating this downward cycle. According to the Congressional Budget Office, premium increases of ten percent may be expected, causing four million people to quit these plans in 2019 and upwards of 13 million to opt out of these plans by 2027. Some argue that the message the government is sending to individuals— that healthcare coverage is not considered essential any more— is enough to raise those numbers considerably.
President Trump has chipped away at the ACA in other ways too, such as by expanding the availability of healthcare plans through outside associations, including targeted industry, trade, and business groups. This change will allow these groups to exist solely for the provision of health insurance, which was previously not allowed. The new regulations are somewhat of a“ mixed bag” for association members, with the potential for lesser coverage but prohibitions against discrimination on the basis of preexisting conditions or degree of sickness.
Surprisingly, despite the uncertainty around the ACA, the recent open enrollment period drew nearly the same number of new sign-ups as the prior year— dropping by just five percent despite a much shorter enrollment window and sharply less outreach by the government. Only time will truly tell how these developments will unfold, and of course, there may be additional changes down the road.
To discuss how changes in the Republican tax bill may impact your own employee healthcare plan, or to inquire about changes to your plan moving forward, please contact me at 856-890- 7144 or dweiss @ hig. net. +
David Weiss is a Benefits Consultant at HIG who partners with his clients to insure they remain in compliance with federal and state regulations. In addition, he also works to assist them in retaining and recruiting top talent. He educates employees by walking them through real life situations and explaining how the differences in plan design may affect their financial and physical wellbeing. Due to his educational background, he is able to break through the stigma of health insurance and allow employers and employees alike, to truly understand what is being offered to them.
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