As we all wake up to this strange new post-election world, two things seem certain:
1. Very few, if any, of us saw this coming.
2. This changes everything.
For the past couple months, I’ve had it on my calendar to write a post-election wrap-up, but this definitely wasn’t the outcome I was expecting, so I’m really not sure what to say. Like most of you, I’ve spent the last seven years trying to understand the health reform law, and while I guessed completely wrong last night, I do have a pretty good record in my side gig as a continuing education instructor of predicting where the market is going and explaining it in a way that normal people can understand. With that in mind, here are my top three predictions related to our industry:
#1. President Trump (wow, that sounds weird) and the Republican House and Senate will completely repeal the Affordable Care Act in the first 100 days.
Opponents of the law have said they want to do it for years, and they’ve tried unsuccessfully over 50 times. There’s no reason to believe they wouldn’t take this opportunity to get the job done. Because Trump has promised it to his followers, he’ll certainly sign the bill when it crosses his desk.
#2. Trump, Speaker Ryan if he survives, and the Republican majority will then replace the ACA with _________________.
There’s a blank there because I don’t know what they’ll put in its place. Neither do they. Trump has, however, promised to fill the hole with “something terrific.” Here are a few of their ideas:
- Trump has suggested allowing for the sale of health insurance across state lines, which is already permissible under the ACA and will do absolutely nothing to solve the problem. Nonetheless, this suggestion also appears in Paul Ryan’s “A Better Way” proposal, so it’s almost certain to make it into the final legislation.
- Trump and Ryan have also made it clear that they’re big fans of Health Savings Accounts, which is good since they’ve been around for more than a decade and have grown rapidly under the ACA. Perhaps they’ll entertain the thought of separating them from High Deductible Health Plans, as I suggested in a 2009 article.
- They’ve also floated the idea of an individual tax credit for people with health insurance. Unfortunately, this will be more beneficial to people who can afford to pay the premium and wait to get the tax benefit than it will be for people who currently rely on an advance tax credit to help pay their monthly bills.
- What will happen to the guaranteed issue provision is anyone’s guess. Ryan has suggested eliminating the individual mandate and creating risk pools as a safety net for people with medical conditions. Of course, the prices for these plans would be sky high (yes, even higher than current Marketplace coverage), so I assume we’d need to support the pools with tax dollars.
- Finally, the Cadillac tax will no longer be a concern, but Paul Ryan strongly supports a cap on the employer exclusion, which will have similar negative impacts on ancillary benefits and tax-advantaged accounts like FSAs. It’s a bad idea that NAHU opposes.
#3. And now for the prediction I feel most confident making: in the same way that we knew the Democrats wouldn’t be able to solve the health care and health insurance crises in this country with the Affordable Care Act, the Republicans will not be able to solve our clients’ problems with their proposals.
In fact, I would strongly argue that the ideas that have been suggested so far will likely make the problems worse. For that reason, the market will be left to solve the problems largely on its own. So how do we do that? By getting consumers more involved in their health care decisions; letting them buy plans that they feel provide an adequate amount of coverage based on their health conditions and financial situations; giving them a way to save for a rainy day; providing them with transparency tools so they can see the true cost of health care services; and giving them alternatives so they can receive care in new, alternative, cost-saving ways.
Here’s the good news (finally!). First, you’re probably already recommending these solutions to your clients. Second, the solutions are getting better every day, partly because of technological advances and partly because increased demand has encouraged the market to innovate. Third, if Trump keeps his promise of relaxing some of the regulations that he says are choking business (and, admittedly, repealing the ACA is a good start), then even more solutions will emerge. The market is pretty good at solving people’s problems when the government gets out of the way.
One final thought
As you’re talking with your clients about these very unexpected election results, try to focus on the various ways the election could impact their health plans and stay as far away from the political discussion as possible. While this historic presidential and congressional election will have a huge impact on the health insurance industry, there are even bigger issues out there. Whatever side you’re on, you’ve probably “unfriended” or at least stopped talking to some people already because it became clear you’d never be able to have a normal conversation with them again. Just make sure you don’t say something that might cause your clients to unfriend you.
This article was originally posted on LinkedIn and a version of it also appeared on the freshbenies.com Broker Blog and on BenefitsPro.com.