Healthcare Legislation: What Now?
March 31, 2017
Michael Grossman, President
March 24th, the proposed legislation to change our healthcare system was pulled from a vote, leaving citizens and lawmakers wondering, “What now?” Insurance premiums are high and still going up, and the health insurance market is becoming less competitive and offering fewer choices to consumers — Oklahoma has a single insurance provider in their exchange. Employers and medical providers are still struggling to manage reporting and stay in compliance with the Affordable Care Act.
Our legislators have the opportunity to create a system that:
- lowers insurance premiums
- promotes more consumer choices
- allows for more carrier options
- makes it easier for employers to offer insurance
- makes it easier for providers to practice medicine
HOW TO MOVE FORWARD
Allowing consumers to buy insurance across state lines would increase competition and provide additional coverage options. According to the Pew Research Center nearly two-thirds of Americans favor this, along with lawmakers on both sides of the aisle.
Two House Bills could also lower premiums: one would repeal the Health Insurance Tax, which currently costs families $520 per year. The other aims to repeal the Cadillac Tax, scheduled to take effect in 2020. This high-cost plan tax (HCPT) would place a 40%excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families.
But, if these taxes are eliminated, how do we make up the lost revenue? One idea being discussed is the elimination of the Employer Tax Exclusion for Health Insurance, which allows an employer’s contribution for an employee’s health insurance to be excluded from the employee’s compensation for income and payroll tax.
Tom Price, the newly confirmed Secretary of Health and Human Services, has been critical of the Affordable Care Act, believing that it interferes with the ability of patients and doctors to make medical decisions. He favors the elimination of the employer exclusion, he is a fan of Health Care Savings Accounts and their expansion, and favors tax credits and risk pools for states. He also wants to grant the states more flexibility in administering Medicaid program. I expect he will shift a great deal of responsibility to the states, such as allowing each state to determine what coverages must be included in health plans and making employers’ reporting voluntary.
COOPERATION IS A MUST
The next attempt at healthcare reform needs cooperation across the aisle and the re-introduction of legislation on a slower road with more of a consensus. The current program is not perfect and both sides agree it needs refinement. Last month when I was in DC meeting with legislators, I often heard the terms “Affordable Care Act Plus” and “Market Stabilization.” I believe that we will hear more “reform” and less “replace” from our lawmakers in the future.