The massive Further Consolidated Appropriations Act, passed in the waning days of December, made several substantive changes to the Affordable Care Act, a goal President Trump first trumpeted in his campaign and has continued to pursue since he began his office term.
- Repeal of the Cadillac Tax – a classic case of “now that we have it, what do we do with it” given that it was going to charge many medical plan policyholders a tax for having a “rich” plan. Revenue was supposed to pay for ACA reductions, so now what?
- Repeal of the 2.3% medical excise tax (will the manufacturers reduce their pricing by a commensurate amount?)
- Repeal of the Health Insurance Premium Tax (HIT) after 2020 (which carriers have been passing along two policyholders since it was imposed – and now?)
There is no waiver or end to the PCORI (Patient Centered Outcomes Research Institute) tax, though no one is quite sure what the institute is doing. This only applies to self-funded plans.
It is also apparent that the Trump administration, following an executive order filed early in the term, has no intention of pursuing any further action on discrimination testing.
The repeal of the three taxes, designed to pay for ACA coverage expansion, result in a collective loss of $373.3 billion over ten years. No replacement for the revenue is suggested.
There is also something in the bill regarding “silver loading” which deals with allowances for the premium tax credit for those who qualify for the subsidy. The premium for the second lowest cost marketplace silver plan is used to determine the credit allowance. As a result, carriers loaded the cost of the silver plan, despite the actual actuarial considerations. If silver loading were prohibited, it is speculated that carriers would spread the load among all medical plans. The expected increase was 11% for non-silver plans with a 5% reduction in silver plans.