Attorney: Quick ACA repeal unlikely, but other changes coming

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Athey, a member of Harrisburg-based McNees,Wallace & Nurick LLC.’s Lancaster office, predicts that the biggest change over the next year will be the federal government’s backtracking on enforcement of the controversial law’s mandates, such as one requiring individuals to buy insurance or pay fines.

Republicans have floated several ACA replacement proposals, and the Trump administration has promised to quickly repeal and replace the law. But fast movement is complicated as millions of people are receiving coverage under the law.

From a political standpoint, it seems policymakers “have to move delicately,” Athey said.

Athey spoke Thursday morning alongside fellow McNees attorney Stephen R. Kern, who focuses on employee benefits law, at an update on health care legislation and law hosted by the Central Penn Business Group on Health.

The event, which took place in Manheim Township at the Lancaster Country Club, was the group’s first event since changing its name this week from Lancaster County Business Group on Health.

The group, which is expanding services to Adams, Berks, Cumberland, Dauphin, Lebanon and York counties, plans to hold similar health care conversations in its new territories. The first such event, on the unintended consequences of high-deductible health plans, is scheduled for April 27 at the Hershey Country Club in Derry Township.

The group helps employers understand the ever-changing health care climate, and gives employers a voice.

With so much happening so fast at the federal level, Athey and Kern broke down on Thursday what has happened so far and how it might impact  business.

What does the executive order mean?

The biggest thing to happen so far as a result of the executive order is that it blunted federal enforcement of the individual mandate, which forced people to buy insurance or pay a fine, Kern said.

The Internal Revenue Service has said it will not require people, when filing their taxes for 2016, to check the box indicating whether they had health insurance that year.

President Donald Trump signed the executive order on the ACA hours after being sworn into office in January.

The order directed federal agencies to alleviate “unwarranted economic and regulatory burdens of the ACA,” give states more flexibility and control to “create a free and open health care market,” and grant “waivers, deferrals, or exemptions from ACA provisions that impose fiscal burdens on certain individuals, plans and entities.”

but while it does allow federal agencies to relax enforcement of ACA provisions, it doesn’t change the actual law, according to Kern,

Still, some are referring to the president’s move as the “insurance death spiral,” Kern said. The law won’t work if insurance companies are forced to cover people with pre-existing conditions but healthy people don’t have to sign up for coverage.

Other mandates, such as those affecting employers, are likely to be next on the chopping block.

What is the legislative process for repealing and replacing the ACA?

Actual changes to the law cannot take place without congressional action

Any proposed changes to the text of the ACA will likely require a filibuster-proof majority of 60 votes in the Senate. The GOP hold 52 seats in the Senate, meaning Democrats could hold up any votes.

What replacement plans are on the table?

Republicans are pitching several replacement plans for the ACA.

The plans’ provisions, in general, would make it easier for employers to offer health savings accounts, introduce block grants to states for Medicaid, phase out tax credits and subsidies for individual health plans and make health care costs more transparent for consumers.

Other suggested provisions include doing away with the Cadillac Tax, which is scheduled to go into effect in 2020. The tax would slap a 40 percent levy on health insurance plans that exceed a certain value: $12,500 a year for individuals and $27,500 for families.

The purpose of the tax is essentially to motivate companies and insurers to find ways to keep health care cost down, and to raise revenue to fund coverage subsidies, Athey said.

Some of the new proposals include a “watered-down” version of the Cadillac Tax, Athey said.

The proposed tax wouldn’t be as high as 40 percent, but it would set a cost threshold similar to the Cadillac Tax. Any overage amount would be treated as taxable wages for employees and employers, Athey said.

How soon legislation to replace the ACA will move forward is hard to say.

House Speaker Paul Ryan (R-Wis.) has said a replacement bill could move this year, but Athey suggested that Ryan’s goal is ambitious.