During President Trump’s first 100 days in office, I plan to regularly blog about how his administration’s policies regarding issues such as healthcare, tax reform, immigration and trade will affect ag and ag-related businesses.

To kick off this series, I wanted to delve into what Trump’s executive order concerning the Affordable Care Act (ACA) means for farmers. President Trump signed an executive order last month directing federal agency heads to waive, defer, grant exemptions from or delay implementation of the ACA.

You may be asking “what effect does the ACA Executive Order have on my health care benefits and business?” As of right now, not much. This executive order doesn’t modify existing law or regulation; it just merely demonstrates the President’s ultimate intention: to repeal and replace the ACA. 

The president said that he aims to have the rudiments of a new healthcare plan rolled out by the end of 2017, with a more detailed plan in 2018. As of today, there are several proposed ACA replacement plans with no clear frontrunner. Details for each replacement plan still need to be firmed up, but the big ticket items you can expect to see are the repeal of: 1) employer and individual mandates; 2) individual subsidies at the health insurance exchanges; 3) the Medicaid expansion (which may leave previously covered employees without health benefits); and 4) ACA-related taxes.

For Western Growers members and agribusinesses alike, there are both positive and negative effects—depending on which healthcare replacement plan is chosen. Some positive effects include more flexibility in health benefit plan design, Health Savings Account (HSA) improvements, less regulation on Association health plan provisions and additional incentives for offering wellness plans.

On the flip side, some negative effects include capping employer’s tax deduction for health care expenses, an overhaul of Medicare, potential return of high risk pools for very sick individuals and implementation of preexisting conditions provisions to individuals who fail to maintain continuous coverage. Also, many of the proposals don’t allow children 26 years and older to remain on their parents’ health plans.

Of course, this is all based on a preliminary analysis, and I expect to share more detailed information about the tax changes and HSA provisions soon. In the meantime, I’m interested in hearing how you feel about the ACA Executive Order and President Trump’s promise to repeal and replace the ACA. What are your questions or concerns? Let me know at [email protected].

Since President Trump signed the executive order last month to delay implementation of the ACA, ag and ag-related businesses have been concerned with how the repeal and replacement of ACA will affect their businesses, employees and families. My last entry on ACA touched on some of the bigger changes you can expect to see; today, I’d like to delve deeper into the topics of ACA-related taxes and changes to Medicaid and Medicare.

The proposed ACA replacement plans still need to be firmed up, but there are still some commonalities among the plans that would be helpful for you to know. Let’s start with tax credits and tax deductions. Several proposals offer tax credits to individuals and families to offset the cost of individual policies similar to the ACA. However, two proposals skip the tax credits altogether. Rather, they rely on tax deductions that will not likely significantly decrease the cost of coverage for individuals who need it most: lower income individuals who would not benefit from a tax deduction.

Moving on to Medicaid and Medicare. Though these may sound similar, they are very different. Medicare is a federal program that provides health coverage if you are 65 or older or have a severe disability (no matter your income). Medicaid is joint federal-state program that provides health coverage to low-income individuals (no matter your age). Please note that California calls its Medicaid program Medi-Cal.

Most proposals eliminate the ACA’s Medicaid expansion that currently covers tens of millions of individuals in California and throughout the nation. In its place, Medicaid block granting has been proposed as a solution. Under block granting, states receive fixed grants based on the state and federal Medicaid spending in that state. The grant would be indexed to inflation. 

The problem here is that the annual medical costs growth will far outpace the inflation rate. To address that concern and preserve funds, states are given the flexibility to determine the types of services provided and who qualifies for coverage. Block grants are similar to but differ from per capita caps that at least one replacement proposal touts. With per capita caps, states get a fixed sum of money each year that is based upon the number of participants in their Medicaid programs; as those numbers fluctuate so does funding.

The last thing I want to highlight are the changes to Medicare. Several proposals introduce serious changes to Medicare including introducing private plans to compete with overhauled Medicare plans on newly-created Medicare exchanges. Other proposals allow Medicare enrollees to contribute to HSAs (health savings account) and medical saving accounts, enter into contracts to pay providers more than Medicare’s reimbursement, or opt-out of Medicare to receive a tax credit to purchase a personal plan instead. 

As I mentioned before, I’m interested in hearing how you feel the ACA Executive Order will affect you and your business. Any questions or concerns? Let me know at [email protected].