Obamacare Requirements and Penalties to Continue in Aftermath of Republican Health Care Defeat.

From the Desk of Bob McNett…..

Obamacare Requirements and Penalties to Continue in Aftermath of Republican Health Care Defeat.

In a rather surprising lapse of party unity, the White House, Speaker Ryan and House Republicans were unable to agree on passage of the American Health Care Act last week.

For the near-term future, the tax penalty for individuals for not buying health insurance, the penalties for larger employers for not offering affordable coverage to employees, and the various reporting requirements that larger employers are required to comply with will still be in force.

Even though this initial attempt at “repeal and replace” of the Affordable Care Act was unsuccessful, we might see some more piecemeal changes coming down in the next months. These possible changes include:

Regulatory reform and market stabilization…..HHS secretary Tom Price has the authority to issue proposed changes to ACA regulations in order to strengthen the individual health insurance marketplace. The individual health insurance market is in very bad shape nearly nationwide. Anthem, one of the largest Blue Cross companies, recently announced that it may exit all exchange marketplaces it currently serves, which would be a major blow to consumers in several large states. Insurers are finding it problematical to make money in these government-sponsored markets.

Non-enforcement of provisions……It is possible that the White House could issue directives instructing the HHS to not enforce certain provisions of the ACA. For example, individual tax penalties for not buying health insurance and penalties on large employers for not providing coverage could technically stay in force, but not be enforced, effectively making these provisions moot. I stress, however, that this is not yet the case.

Comprehensive tax reform…..Next up for the White House and Congress should be tax reform. It is quite possible that certain ACA taxes and tax penalties could be nullified as a part of an overall tax reform package.

Increased state autonomy…….It is very possible that the administration could defer decisions on certain health care reform decisions to the states, giving states the ability to form systems that will conform to their own needs and preferences.

To say the least, the health insurance system in the United States is in a muddled condition. No one quite knows what will happen, and when it will happen. The individual market, as has been true for a while now, has been much more affected than the employer-sponsored group health market.

The McNett Agency will monitor this situation going forward and keep our clients apprised.

The McNett Agency
918 294 3712 Fax 918 494 6725
Toll Free 1 866 497 7119