During President-Elect Donald Trump’s campaign, he repeated his plans to “repeal and replace” President Barack Obama’s health care law. Referring to the Affordable Care Act or “Obamacare,” he said at a rally, “it’s one of the single most important reasons why we must win on Nov. 8.” In his first televised interview after the election, the world watched as he departed from his former, rather resolute, campaign promise of free market reforms.
Trump told 60 Minutes that healthcare is the number one thing that he plans to “get done right away.” His campaign website proclaims, “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare.”
As President-Elect Trump prepares to take office in January, his party has already announced proposed changes, making health care reform again a reality for Americans.
Proposed Plan Changes
In A Better Way, led by Rep. House Speaker Paul Ryan, Republicans share their vision for health care reform in 2017 and beyond. There’s strong support for repeal of the Employer Mandate, which under “Obamacare,” forces business owners to provide Washington-approved state-mandated benefit packages. Republicans plan to get rid of legislation requiring business owners to purchase “one-size fits all” coverage. It would allow insurance providers to sell across state lines instead, saying this will control costs, increase plan flexibility and coverage options by creating more competition.
Additionally the Association Health Plans (AHPs) is another new cost-control proposal potentially affecting small businesses. An AHP is a pool of small businesses under an umbrella policy. In a proposed strength in numbers union, “improving bargaining power at the negotiating table” is said to lower overhead costs.
Moreover, Trump’s campaign has proposed tax cuts for high-income taxpayers, insurance providers and corporations. To offset these tax cuts, Medicare benefits currently going to “nondisabled, working-age adults” living above the $11,880 poverty threshold will get cut. Also the income tax exclusion that allows workers to deduct insurance premiums from wages will be repealed.
According to Republicans, these reforms will fix the “Obamacare” system. However, there are two ACA provisions Republicans and Trump currently agree on keeping. First, children under the age of 26 will be able to remain on their parents’ plans. Second, individuals will receive coverage regardless of pre-existing conditions.
What Trump health care reform might mean for small business:
Small businesses can say goodbye to the Small Business Health Options Program (SHOP). Under ACA provides tax credits to businesses who employ 25 or fewer full-time employees who earn $50,000 or less.
Repeal of the Employer Mandate forcing businesses with 50 or more full-time employees to provide coverage.
New provisions would exclude exemptions for employers with fewer than 50 employees who offer Health Reimbursement Arrangements (HRAs) instead of ACA. The Congressional Budget Office (CBO) reports small employer job subsidies attributed to revenue losses of $266 billion in 2016. It may grow to $3.6 trillion by 2026.
High-income earners can expect relief from the Medicare tax enacted under ACA. Since its inception, it raised taxes an additional .9% and 3.8% on payroll taxes, capital gains, investment and dividend income.
Individual insurance providers will compete to sell products across state lines. As a result, Republicans say this will increase the quality and affordability of plans.
Republicans want to offer Association Health Plans to increase negotiating power and lower costs for businesses.
Every proposed change in federal law takes time and negotiation. For now both the President-Elect and Republican-controlled Congress plan to offer a form of “patient-centered” coverage. It would shift responsibility away from employers and onto individuals. Reforms will not happen overnight. But based on the current proposed reforms, small business owners may have more flexibility in the coverage options they chose to offer employees.
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