Subscribe

By: Matt Ingold

Print this Page

January 3rd, 2017

What’s at Risk for Appeal in the Affordable Care Act in Early 2017?

Healthcare Compliance

With less than 3 weeks between today and Inauguration Day, there is a lot of speculation about the future of the Affordable Care Act. In this blog we’ll be reviewing the likely tactic of Budget Reconciliation that Congress will use to rapidly repeal the ACA, and discuss which provisions can and cannot be impacted by this tactic.

Budget reconciliation was created by congress to expedite consideration of certain tax, spending, and debt-limit legislation. It is not subject to a filibuster and can be passed with a simple majority. Budget reconciliation bills can only be debated for 20 hours in the Senate.

This means that, through budget reconciliation, Congress can quickly repeal parts of the Affordable Care Act that are have budgetary impact. The House attempted this in early 2016, and was met by a Presidential veto. Given the amount of discussion throughout his President-elect Trump’s campaign about repealing the Affordable Care Act, it’s unlikely that congress will meet similar obstacles after January 20, 2017.

That being said, the budget reconciliation process has its limits.

Sections of the Affordable Care Act that do not affect the budget could not be amended by the budget reconciliation process. Such items would include:

  • The mandate to cover dependent children up to age 26
  • Ban of preexisting condition exclusions
  • Ban on waiting periods longer than 90 days
  • Requirements to provide Summaries of Benefits and Coverage (SBCs)
  • Annual reporting requirements for Individual and Employer Mandates

Even with these limits, through budget reconciliation, Congress could deliver a catastrophic blow to the ACA by depleting it of its revenue-generating penalties—penalties that were intended to fund the government subsidies in the marketplace (A.K.A. the backbone of the Affordable Care Act).

Segal Consulting reports, “Due to complicated rules governing budget reconciliation, some provisions (e.g., the employer mandate) might not be repealed outright, but the associated tax penalties could be changed to “zero,” thus eliminating the tax penalty for noncompliance.”

Sections of the Affordable Care Act that could be impacted by the budget reconciliation process are:

  • The Individual Mandate Penalty can be reduced to zero
  • The Employer Mandate Penalty can be reduced to zero
  • Subsidies in the State and Federal Marketplaces can be reduced to zero
  • Medicaid expansion could be repealed
  • Small business tax credits could be repealed
  • The Excise (Cadillac) Tax provision could be repealed
  • The Medical Device Tax provision could be repealed

What do we take away from this?

The Affordable Care Act is a very delicate regulation. It’s difficult to repeal or undermine any portion without a ripple-effect of consequences—many of which that could harm individual citizens. While a repeal is likely to happen, it’s unlikely that it would take effect immediately. In order to reduce the negative consequences of an immediate repeal, we will likely see a conditional provision that maintains the status quo of the ACA until an effective replacement program can be instituted.

Benetech Payroll Quote

About Matt Ingold

Matt serves as Benetech's Director of Business Development. He helps employers reduce the cost of personnel management, and discover where improved talent management can give their business a competitive advantage.

  • Connect with Matt Ingold

Before you leave...

leadmagnetImageALT

Mistakes are expensive, especially when building benefit plans.

We've outlined the 3 most common mistakes employers make when offering benefits in a quick ebook. Get your copy free when you subscribe to our blog.

Before you leave...

Mistakes are expensive, especially when building benefit plans.

We've outlined the 3 most common mistakes employers make when offering benefits in a quick ebook. Get your copy free when you subscribe to our blog.