Will the Affordable Care Act be repealed?
The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years – especially as it relates to the Affordable Care Act. To get a sense of what changes might be on the way, the Journal of Accountancy recently spoke with Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, about the future of the ACA.
Video transcript:
The parts of the Affordable Care Act that will go away, there’s a big question as to when will that happen. That’s really on everyone’s mind. And the answer is really speculative, but many people seem to think that it will not be immediate, that it will not go away immediately.
And there are some pretty good indications that that’s accurate speculation. For example, Vice President-elect Pence during the campaign said that there would be a transition period. And in particular when he talked about the subsidies that individuals get for health insurance and the premium tax credit, that there would be a transition period where people would not suddenly have that go away. So for that reason I think we can expect that things will stay pretty much the same for 2017, and that probably the earliest we would see changes would be 2018.
Also, there is a strong recognition that the Affordable Care Act, when pieces of it are repealed, that there needs to be a replacement. And, in fact, if you look at the House white paper they put out in June of 2016, they actually say that, that they want to repeal the Affordable Care Act, but they don’t have any intention of just going back to the pre-Obamacare days. Their thought is that they do have to replace it with something.
So it’s going to take time to figure out a replacement. Just think of issues like this. So everyone’s committed to the rule that says you can’t be turned away from coverage due to preexisting conditions. But if you eliminate the individual mandate, then the insurance companies say, “Well, wait a minute. On the one hand you are telling us we have to cover everyone. On the other hand, you’re saying there is no longer an individual mandate.” So what happens is, well, the pool of insureds tends to be older, sicker individuals. That drives premiums up, and then premiums become unaffordable, but we don’t have the premium tax credit anymore, so the whole system sort of collapses. So something has to be done to deal with that issue and to replace the Affordable Care Act, so that’s going to take some time.
There is a thought that perhaps one thing that will be done is major parts will be repealed, but there will be a delayed effective date, giving time to get a replacement put in place at the time the repeals actually do take effect.
