How Tom Price could reshape the ACA in a Trump administration
The future of the Affordable Care Act (ACA) has been shaky ever since Nov. 8. While it is clear that President-elect Trump intends to repeal and replace the act in some way, shape, or form, what exactly that replacement looks like is a little murkier.
However, with the appointment of Rep. Tom Price to Secretary of Health and Human Services, we can make some assumptions about what’s to come.
Price has introduced a replacement bill several times since the ACA was enacted in 2010. His own plan, called the Empowering Patients First Act, has a few key components that will likely make their way into Trump’s health care replacement package. Let’s look at what he has proposed in the past to get a sense of the ACA’s potential future.
Changing the individual market
The Empowering Patients First Act includes a number of changes to the way individual marketplaces for health insurance would work. For one, it would create advanceable, age-adjusted, refundable tax credits for health insurance coverage purchased through the individual market. The amount of these credits would be tied to the price of average insurance on individual markets, adjusted for inflation. They would be available to those who purchase health insurance through these markets, but not to anyone receiving federal or other benefits such as Medicare, Medicaid, SCHIP, TRICARE, VA benefits, or FEHBP, or to individuals in employer-subsidized group plans.
As the plan currently stands, the tax credits would be as follows:
- $1,200 for those between 18 and 35 years of age
- $2,100 for those between 35 and 50 years of age
- $3,000 for those 50 years or older
- $900 per child up to age 18
Individuals would also be allowed to opt out of government benefits (such as Medicare and Medicaid) in order to receive tax credits and purchase from the individual marketplace instead, and be allowed to opt out of Medicare without losing Social Security. The federal government would continue to fund states’ ability to run high-risk pools for individuals who cannot afford health care, and insurers would be allowed to sell across state lines. In theory, all of these changes add up to less influence from the federal government, and more choice for the consumer.
Powering up health savings accounts
The boosting of health savings accounts (HSA) was one of the health care policies Trump pushed consistently over the course of his campaign. In alignment with this, Rep. Price’s Act focuses greatly on increasing and expanding the abilities of HSAs.
The Empowering Patients First Act would incentivize use of such accounts using a one-time $1,000 tax credit. It would also increase the amount that individuals could put into a health savings account to be equal to the maximum IRA contribution level—meaning it would be raised from $3,350 to $5,500. An HSA would also be allowed to roll over, not only to a spouse, but to a child, parent, or grandparent.
Focusing on employers
When it comes to employers, the Empowering Patients First Act has two main components: The Limitation of Employer-Provided Health Care Coverage and the Small Business Health Fairness Act. For the first part, employers would be allowed to exclude health care coverage up to $20,000 per family or $8,000 per individual — any additional funds would be taxable. For the latter, small businesses would be allowed to band together across state lines, increasing their bargaining power for group plans and giving them freedom from state-mandated benefits plans.
This is framework, not fact
The Empowering Patients First Act would certainly lead to repeal of the ACA and many of its provisions. However, this is not the final form of ACA repeal and replace endorsed by the Trump administration—it’s just the clearest picture we have of what the administration might endorse.
Health care reform in 2017 may not look like what is proposed in the Empowering Patients First Act, but it will probably take several important cues from Tom Price’s plan. Expect more information to come out in the next few months, and in the meantime, keep up on your reporting efforts! No matter what becomes of the ACA, this year is still in play.