Exactly where a repeal of the Affordable Care Act will reside on the priority lists of Congress and President-elect Donald Trump remains to be seen. It appears, however, that companies shouldn’t count on a swift demise for the law.
President Obama is scheduled to meet on Wednesday with congressional Democrats “to discuss strategies for fending off Republican attacks on Obamacare,” according to a Reuters report. On the same day, Vice President-elect Mike Pence reportedly will meet with House Republicans to rally for an appeal of the law.
The meetings raise a question: To what extent will a Dec. 19 comment by Republican Senate Majority Leader Mitch McConnell — that he won’t be able to do much from a legislative standpoint without cooperation from Democrats — apply to the presumed ACA repeal effort? At the least, it’s clear that neither party is taking for granted that a repeal is certain.
In any event, getting started on the repeal is unlikely to be the new Congress’ first order of business, given the controversy over several of Trump’s nominations for Cabinet posts. However, Republicans in Congress are expected to issue a budget reconciliation bill within weeks that will include an effective repeal of Obamacare that would not take effect for two or three years.
Notably, budget reconciliations are not subject to filibuster, so Senate Democrats would not be able to derail the bill unless they lure some of their Republicans counterparts to their side.
Still, it’s not hard to find informed observers of the health-care industry that are skeptical that such a “repeal-and-delay” scheme will come to fruition. “I think it’s a purely political tactic and not meaningful,” says Julie Stone, a national health-care practice leader for Willis Towers Watson.
In fact, Stone says, “the provisions of the ACA that most impact employers are likely not going to be dramatically changed.” That’s a reference to (1) the mandate that employers provide health benefits meeting minimum standards or pay a penalty, (2) reporting requirements under the law, and possibly (3) the so-called “Cadillac tax” — the excise tax on employer health plans over a certain value.
The excise tax is currently slated to take effect in 2020, although there has been significant bipartisan support for diluting or repealing it.
But overall, according to Stone, “the regulations that underlie the ACA are so complex that it would take many years to unwind. All of the pieces were framed to fit together. I’m skeptical that there will be material changes that will impact employers.”
Most often, when people talk about the idea that the ACA doesn’t need to be flat-out repealed but rather should be substantially modified, they cite provisions like the ability to keep children on parents’ health insurance plans to age 26 and the prohibition on denying coverage based on pre-existing conditions.
But the heart of the ACA is not about such provisions. Rather, it’s about government-subsidized coverage for economically disadvantaged individuals and families, provided through the public insurance exchanges. That’s not highly relevant to most employers — but, relatively speaking, neither are the specific provisions noted above.
“Those things are important to individual employees, but not to the larger construct of the ACA,” Stone says. “There are multiple things in the law that have much larger impact on employers.”
She says she’s been getting numerous inquiries from clients about “what to do in 2017,” given the uncertainty over the ACA’s fate. The question is easy to answer. “Nobody should do anything differently, from a compliance perspective,” says Stone.
Republicans are aware that whatever they do about the ACA, they will be under a bright spotlight. “Republicans will own the changes, and they have to be very careful they don’t find themselves in the same position as the Obama administration, defending an unpopular, partisan piece of legislation,” Dean Rosen, a Republican lobbyist and former Republican Senate staffer, told Modern Healthcare.
Meanwhile, Stone does offer one possible ramification for employers if repeal-and-replace legislation does away with the public exchanges.
Some clients, she says, have told her that the prospect of employing more contingent workers in the fast-developing “gig economy” has been considered doable in part because such people could find health-care coverage through the public exchanges.
“If the public exchanges go away, the willingness of a large number of people to work on a contingent basis, vs. having that more permanent relationship with an employer, could be impacted,” Stone suggests. “So there are implications for workforce planning that go beyond ‘what’s the cost of my health care.’”