Three ACA Replacement Plans Emerge

The future of the Affordable Care Act is coming into focus. Last week, the Senate and House of Representatives held “budget blueprint” votes, setting the stage to dismantle the ACA during the budget process. However, the incoming Trump administration and Congress continue to disagree on some of the “repeal and replace” specifics, including timing. These multiple perspectives have given way to three replacement plans – each with the potential for a different reporting requirement:

Sen. Rand Paul’s Replacement Plan

The Stated Objective Give health care access to the largest number of people possible at the lowest possible cost Known Highlights • Legalize the sale of inexpensive insurance by ending the mandates on what one can buy. • Expand the use of Health Savings Accounts. • Offer more tax credits for health care expenses on top of existing deductions. • Tailor plans to consumers’ specific needs. • Replace state and federal exchanges with small business and private individual associations to create their own markets. Leverage those markets to negotiate with insurance companies to guarantee coverage even for people with preexisting conditions or who get sick. Potential Impact on Business-to-Government Reporting Without an individual mandate, compliance requirements will likely change – but not completely disappear. Government oversight of HSAs and tax credits are the likely objective of compliance reporting.

The Collins-Cassidy Plan (Sens. Susan Collins and Bill Cassidy)

The Stated Objective Provide universal access to health insurance Known Highlights • Shift the “ACA decision” to states: states can keep ACA intact or choose an “alternate route” using funding originally earmarked for ACA. • Eliminate ACA penalties and subsidies, but maintain market reforms. • Enable individuals to opt out of the individual mandate, if they are eligible for exemptions. Potential Impact on Business-to-Government Reporting The combination of individual exemptions and state-led approach indicates some type of reporting requirement. Given the empowerment of the states in the Collins-Cassidy Plan, there is potential for state-level reporting, instead of or in addition to federal reporting.

President-elect Trump’s Plan

The Stated Objective Provide “insurance for everybody” Known Highlights • Force drug companies to negotiate directly with the government on prices in Medicare and Medicaid. • Remove political protections of pharmaceutical companies. • Reduce deductibles. • Guarantee care for those who cannot pay. • Offer simplified and less expensive — but “better” — insurance plans. • Make no Medicare benefit cuts. Potential Impact on Business-to-Government Reporting Initial information on President-elect Trump’s plan does not indicate a direction on compliance requirement. We can expect more details after his HHS Secretary is confirmed. The constant drumbeat of ACA “repeal and replace” news can be overwhelming at times. With the deadline just six weeks away, the most important thing to focus on is delivering ACA reporting forms to recipients. In the meantime, Sovos will publish updated regulatory analysis as new information emerges and details are shared for each ACA replacement plan.