It’s hard to believe, but on March 23rd the Affordable Care Act turned six years old. The time’s flown by, hasn’t it? By now you’ve learned how to adapt to the changes created by the law, and you may have even grown your business and your income over the past few years.
Still, many brokers and a lot of their clients aren’t entirely thrilled with the health reform law. While it has lowered the rates for some small businesses and helped millions of people gain health insurance coverage, it’s also increased the prices for other employers and individuals. Those who win tend to like the law; those forced to pay more may have a different opinion.
Either way, at this point most people agree the law is here to stay. After all, it’s already survived two Supreme Court challenges, a presidential election, and a government shutdown—history is definitely on its side. Nonetheless, we’re in the middle of another election season, and once again the leading Republican candidates are promising to “repeal and replace” Obamacare.
That does beg the question, what would they replace it with?
It’s actually a little hard to tell because, to this point, neither Donald Trump nor Ted Cruz has introduced a complete replacement plan. Cruz, though, has at least spelled out his three biggest ideas:
While most of Donald Trump’s comments about health insurance are focused on the “disaster” that is Obamacare, he has promised to repeal the health reform law and replace it with “something terrific.” At different times, he’s mentioned each of Ted Cruz’s top three suggestions as important parts of his plan.
Supporters of the ACA would argue that none of these ideas would do the trick, and they may have a point. For one, HSAs have been around for years, and they’ve actually grown under the Affordable Care Act, so that’s hardly a new idea. As for buying insurance across state lines, that idea has popped up multiple times over the past few years. To the extent that the ACA’s “essential health benefits” are eliminated and premiums once again vary based on state mandated benefits, the idea may have some merit. Still, in a system where almost every plan is network-based, some wonder how buying across state lines would even be possible. Finally, we already have an individual tax credit under the Affordable Care Act, but opponents of the law don’t like the fact that the government fronts the money to those who qualify. Unfortunately, without the advance credit, many of the Americans who qualify for a subsidy would be unable to pay the full premium and then wait for reimbursement when they file their taxes, so this change would likely increase the number of uninsured.
It’s not our job to endorse or criticize any of the proposals to expand or repeal the health reform law, but we do feel it’s important to let you know what we think might happen next year, so here goes…
If Hillary Clinton is elected, she promises to build on and improve the Affordable Care Act. Whether this will be possible will depend largely on what happens with the congressional elections. Unless the Democrats have control of both houses of Congress, it’s unlikely that much will change, though some tweaks could be made at the regulatory level. At the same time, unless the Republicans retain control the House and win a veto-proof super majority in the Senate, the law certainly won’t be repealed.
If Trump, Cruz, or another Republican is our next president, they’ll do everything within their power to repeal the law, and if they also control both houses of Congress that may actually be possible. If the Democrats, though, are able to win control of either the House or the Senate, the President would be limited in his ability to undo the law. With the help of Congress he could de-fund certain provisions and other changes could be made by HHS or the IRS, which will be under new leadership if a Republican wins the White House, but a complete repeal would be very unlikely.
Long story short, nobody knows what’s going to happen, and the eventual outcome will depend on a lot more than who wins the presidency. For that reason, our best advice is to plan for all likely outcomes.
One of those outcomes is that Hillary Clinton will win, in which case the ACA will almost certainly continue and possibly even grow. We already know that there are some problems with the law and that it’s becoming increasingly difficult to make a living on individual health commissions alone, so brokers will need to offer other products, like Medicare supplements, Medicare Advantage plans, final expense policies, supplemental insurance, and even self-funded small group plans in order to create other income streams.
Another equally likely outcome is that a Republican will be our next president and will work hard to repeal the ACA, though the repeal efforts will take some time and may ultimately be unsuccessful. At a minimum, brokers should expect more of the same for at least the next year and possibly longer. If the repeal efforts are successful, then individual plans will no longer be guaranteed issue, which means brokers will need to find other products to sell, like Medicare supplements, Medicare Advantage plans, final expense policies, supplemental insurance, and small group plans.
As you can see, while we can’t predict what will happen in November and certainly can’t tell you what will happen in 2017 and beyond, we can confidently say that there will continue to be a role for brokers and that most of the products we’ve been recommending for the past few months will continue to be in high demand. In order to survive, brokers should offer products that will do well no matter what happens, and AHCP can help you in those efforts. We look forward to working with you in the months and years to come.