1114Fol­low­ing the Novem­ber 2016 elec­tion, Don­ald Trump ® will be sworn in as the next Pres­i­dent of the Unit­ed States on Jan­u­ary 20, 2017. The Repub­li­cans will also have the major­i­ty in the Sen­ate (51 Repub­li­can, 47 Demo­c­rat) and in the House of Rep­re­sen­ta­tives (238 Repub­li­cans, 191 Demo­c­rat). As a result, the polit­i­cal atmos­phere is favor­able for the Trump Admin­is­tra­tion to begin imple­ment­ing its health­care pol­i­cy objec­tives. Rep­re­sen­ta­tive Paul Ryan (R‑Wis.) will like­ly remain the Speak­er of the House. Known as an indi­vid­ual who is expe­ri­enced in pol­i­cy, it is expect­ed that the Repub­li­can House will work to pass leg­is­la­tion that fol­lows the health care poli­cies in Speak­er Ryan’s “A Bet­ter Way” pro­pos­als. The suc­cess of any of these pro­pos­als remains to be seen.

Employ­ers should be aware of the main tenets of Pres­i­dent-elect Trump’s pro­pos­als, as well as the poli­cies out­lined in Speak­er Ryan’s white paper. These pro­pos­als are like­ly to have an impact on employ­er spon­sored health and wel­fare ben­e­fits. Repeal of the Patient Pro­tec­tion and Afford­able Care Act (ACA) and cap­ping the employ­er-spon­sored insur­ance (ESI) exclu­sion for indi­vid­u­als would have a sig­nif­i­cant effect on employ­er spon­sored group health plans.

Trump Pol­i­cy Proposals

Pres­i­dent-elect Trump’s pol­i­cy ini­tia­tives have sev­en main components:

  • Repeal the ACA. Pres­i­dent-elect Trump has vowed to com­plete­ly repeal the ACA as his first order of Pres­i­den­tial business.
  • Allow health insur­ance to be pur­chased across state lines.
  • Allow indi­vid­u­als to ful­ly deduct health insur­ance pre­mi­um pay­ments from their tax returns.
  • Allow indi­vid­u­als to use health sav­ings accounts (HSAs) in a more robust way than reg­u­la­tion cur­rent­ly allows. Pres­i­dent-elect Trump’s pro­pos­al specif­i­cal­ly men­tions allow­ing HSAs to be part of an indi­vid­u­al’s estate and allow­ing HSA funds to be spent by any mem­ber of the account own­er’s family.
  • Require price trans­paren­cy from all health­care providers.
  • Block-grant Med­ic­aid to the states. This would remove fed­er­al pro­vi­sions on how Med­ic­aid dol­lars can and should be spent by the states.
  • Remove bar­ri­ers to entry into the free mar­ket for the phar­ma­ceu­ti­cal indus­try. This includes allow­ing Amer­i­can con­sumers access to import­ed drugs.

Pres­i­dent-elect Trump’s pro­pos­al also notes that his immi­gra­tion reform pro­pos­als would assist in low­er­ing health­care costs, due to the cur­rent amount of spend­ing on health­care for ille­gal immi­grants. His pro­pos­al also states that the men­tal health pro­grams and insti­tu­tions in the Unit­ed States are in need of reform, and that by pro­vid­ing more jobs to Amer­i­cans we will reduce the reliance of Med­ic­aid and the Chil­dren’s Health Insur­ance Pro­gram (CHIP).

Speak­er Ryan’s “A Bet­ter Way” Proposal

In June 2016, Speak­er Ryan released a series of white papers on nation­al issues under the ban­ner “A Bet­ter Way.” With Repub­li­can con­trol of the House and Sen­ate, it would be plau­si­ble that elect­ed offi­cials will begin work­ing to imple­ment some, if not all, of the ideas pro­posed. The core ten­ants of Speak­er Ryan’s pro­pos­al are:

  • Repeal the ACA in full.
  • Expand con­sumer choice through con­sumer-direct­ed health care. Speak­er Ryan’s pro­pos­al includes spe­cif­ic means for this expan­sion, name­ly by allow­ing spous­es to make catch-up con­tri­bu­tions to HSA accounts, allow qual­i­fied med­ical expens­es incurred up to 60 days pri­or to the HSA-qual­i­fied cov­er­age began to be reim­bursed, set the max­i­mum con­tri­bu­tion of HSA accounts at the max­i­mum com­bined and allowed annu­al high deductible health plan (HDHP) deductible and out-of-pock­et expens­es lim­its, and expand HSA access for groups such as those with TRICARE cov­er­age. The pro­pos­al also rec­om­mends allow­ing indi­vid­u­als to use employ­er pro­vid­ed health reim­burse­ment account (HRA) funds to pur­chase indi­vid­ual coverage.
  • Sup­port portable cov­er­age. Speak­er Ryan sup­ports access to finan­cial sup­port for an insur­ance plan cho­sen by an indi­vid­ual through an advance­able, refund­able tax cred­it for indi­vid­u­als and fam­i­lies, avail­able at the begin­ning of every month and adjust­ed for age. The cred­it would be avail­able to those with­out job-based cov­er­age, Medicare, or Med­ic­aid. It would be large enough to pur­chase a pre-ACA insur­ance pol­i­cy. If the indi­vid­ual select­ed a plan that cost less than the finan­cial sup­port, the dif­fer­ence would be deposit­ed into an “HSA-like” account and used toward oth­er health care expenses.
  • Cap the employ­er-spon­sored insur­ance (ESI) exclu­sion for indi­vid­u­als. Speak­er Ryan’s pro­pos­al argues that the ESI exclu­sion rais­es pre­mi­ums for employ­er-based cov­er­age by 10 to 15 per­cent and holds down wages as work­ers sub­sti­tute tax-free ben­e­fits for tax­able income. Employ­ee con­tri­bu­tions to HSAs would not count toward the cost of cov­er­age on the ESI cap.
  • Allow health insur­ance to be pur­chased across state lines.
  • Allow small busi­ness­es to band togeth­er an offer “asso­ci­a­tion health plans” or AHPs. This would allow alum­ni orga­ni­za­tions, trade asso­ci­a­tions, and oth­er groups to pool togeth­er and improve bar­gain­ing power.
  • Pre­serve employ­er well­ness pro­grams. Speak­er Ryan’s pro­pos­al would lim­it the Equal Employ­ment Oppor­tu­ni­ty Com­mis­sion (EEOC) over­sight over well­ness pro­grams by find­ing that vol­un­tary well­ness pro­grams do not vio­late the Amer­i­cans with Dis­abil­i­ties Act of 1990 (ADA) and the col­lec­tion of infor­ma­tion would not vio­late the Genet­ic Infor­ma­tion Nondis­crim­i­na­tion Act of 2008 (GINA).
  • Ensure self-insured employ­er spon­sored group health cov­er­age has robust access to stop-loss cov­er­age by ensur­ing stop-loss cov­er­age is not clas­si­fied as group health insur­ance. This pro­vi­sion would also remove the ACA’s Cadil­lac tax.
  • Enact med­ical lia­bil­i­ty reform by imple­ment­ing caps on non-eco­nom­ic dam­ages in med­ical mal­prac­tice law­suits and lim­it­ing con­tin­gency fees charged by plain­tiff’s attorneys.
  • Address com­pe­ti­tion in insur­ance mar­kets by charg­ing the Gov­ern­ment Account­abil­i­ty Office (GAO) to study the advan­tages and dis­ad­van­tages of remov­ing the lim­it­ed McCar­ran-Fer­gu­son antitrust exemp­tion for health insur­ance car­ri­ers to increase com­pe­ti­tion and low­er prices. The exemp­tion allows insur­ers to pool his­toric loss infor­ma­tion so they can project future loss­es and joint­ly devel­op policy.
  • Pro­vide for patient pro­tec­tions by con­tin­u­ing pre-exist­ing con­di­tion pro­tec­tions, allow depen­dents to stay on their par­ents’ plans until age 26, con­tin­ue the pro­hi­bi­tions on rescis­sions of cov­er­age, allow cost lim­i­ta­tions on old­er Amer­i­cans’ plans to be based on a five to one ratio (cur­rent­ly the ratio is three to one under the ACA), pro­vide for state inno­va­tion grants, and ded­i­cate fund­ing to high risk pools.

Speak­er Ryan’s white paper also address­es more robust pro­tec­tion of life by enforc­ing the Hyde Amend­ment (which pro­hibits fed­er­al tax­pay­er dol­lars from being used to pay for abor­tion or abor­tion cov­er­age) and improved con­science pro­tec­tions for health care providers by enact­ing and expand­ing the Wel­don Amend­ment.

Speak­er Ryan also pro­pos­es oth­er ini­tia­tives includ­ing robust Med­ic­aid reforms, strength­en­ing Medicare Advan­tage, repeal­ing the Inde­pen­dent Pay­ment Advi­so­ry Board (IPAB) that was once referred to as “death pan­els,” com­bine Medicare Part A and Part B, repeal­ing the ban on physi­cian-owned hos­pi­tals, and repeal­ing the “Bay State Boon­dog­gle.”

Process of Repeal

Gen­er­al­ly speak­ing, the process of repeal­ing a law is the same as cre­at­ing a law. A repeal can be a sim­ple repeal, or leg­is­la­tors can try to pass leg­is­la­tion to repeal and replace. Bills can begin in the House of Rep­re­sen­ta­tives, and if passed by the House, they are referred to the Sen­ate. If it pass­es the Sen­ate, it is sent to the Pres­i­dent for sig­na­ture or veto. Bills that begin in the Sen­ate and pass the Sen­ate are sent to the House of Rep­re­sen­ta­tives, which can pass (and if they wish, amend) the bill. If the Sen­ate agrees with the bill as it is received from the House, or after con­fer­ence with the House regard­ing amend­ments, they enroll the bill and it is sent to the White House for sig­na­ture or veto.

Although Repub­li­cans hold the major­i­ty in the Sen­ate, they do not have enough par­ty votes to allow them to over­come a poten­tial fil­i­buster. A fil­i­buster is when debate over a pro­posed piece of leg­is­la­tion is extend­ed, allow­ing a delay or com­plete­ly pre­vent­ing the leg­is­la­tion from com­ing to a vote. Fil­i­busters can con­tin­ue until “three-fifths of the Sen­a­tors duly cho­sen and sworn” close the debate by invok­ing clo­ture, or a par­lia­men­tary pro­ce­dure that brings a debate to an end. Three-fifths of the Sen­ate is 60 votes.

There is poten­tial to dis­man­tle the ACA by using a bud­get tool known as rec­on­cil­i­a­tion, which can­not be fil­i­bus­tered. If Con­gress can draft a rec­on­cil­i­a­tion bill that meets the com­plex require­ments of our bud­get rules, it would only need a sim­ple major­i­ty of the Sen­ate (51 votes) to pass.

Nei­ther Pres­i­dent-elect Trump nor Speak­er Ryan has giv­en any indi­ca­tion as to whether a full repeal, or a repeal and replace, would be their pre­ferred method of action.

The via­bil­i­ty of any of these ini­tia­tives remains to be seen, but with a Repub­li­can Pres­i­dent and a Repub­li­can-con­trolled House and Sen­ate, if law­mak­ers are able to reach agree­able terms across the exec­u­tive and leg­isla­tive branch­es, some lev­el of change is to be expected.


Orig­i­nal­ly pub­lished by Unit­ed Ben­e­fit Advi­sors — Read More