February 9, 2017

A Look into the Impacts of the ACA Repeal and Replace

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 tomn@wga.com.