Blue Shield’s Response to ACA questions following the Presidential election
The future of the Affordable Care Act (ACA) and how it could affect our customers. While we do not yet know the full outcome, we do know that the ACA and Covered California is working for over 21 million Americans and repealing or replacing it would not be a simple or fast process.
Repealing the ACA was a central platform of the Trump campaign. However, no one knows yet how comprehensive an ACA repeal Trump would seek or how quickly the Trump Administration would act on this issue. Though we do not have concrete answers about what lies ahead, we do have a sense of what could be on the way. In the interest of transparency, we will share what our Policy team is anticipating.
Three executive actions could occur as early as January 20, 2017.
- End enforcement of the ACA mandate: the administration could order the Treasury to stop enforcing the penalty on taxpayers who do not enroll in health insurance, which would lead to lower enrollment.
- Halt payment to insurers for cost-sharing reduction (CSR) [Enhanced Silver] subsidies: the payments Blue Shield and other plans receive for providing cost-sharing subsidies for low-income enrollees are being challenged in court. The Trump Administration could stop defending this lawsuit. This would have a real financial impact and lead to significant disruption in the market.
- Prevent payments related to the transitional reinsurance program: Republicans have argued that payments from the transitional reinsurance program must go to the Treasury before health plans. The administration could redirect $5 billion owed to plans for the 2016 plan year, which would zero out payments that are expected in mid-2017.
Congress could act quickly to repeal key provisions before attempting to replace the entire ACA, which would require bipartisan support.
- Repeal by budget reconciliation: the Republican Congress could repeal portions of the ACA with budgetary implications such as ACA tax credits, the Medicaid expansion, the individual and employer mandate penalties, and various ACA taxes used to pay for health reform. However, the core market reforms could stay in place, like guaranteed issue and dependent coverage to age 26.
- Introduction of replacement legislation: we already have an idea of what a Republican proposal would include, e.g., high risk pools, buying across state lines, and changes to the Medicaid [Medi-Cal] program.