What should you know about the Affordable Care Act?

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Greg Stancil is director of healthcare reform at Scott Benefit Services, based in Greensboro. He shares his insights on the Affordable Care Act, including its impact in the state and the future of the federal health care reform law.

I recently had the privilege of participating in Business North Carolina’s Health Care Round Table to provide insight to business leaders regarding the ever-changing health care landscape. As a follow-up to that conversation, I wanted to provide some additional information on one of the hottest topics in health care, the Affordable Care Act.

The ACA’s impact in North Carolina

North Carolina’s enrollment in ACA exchange plans this year was 519,803, down about 15% compared to 2016. Still, North Carolina has the fourth-highest enrollment in exchange plans for 2018, with only California, Florida and Texas having higher enrollments.

Based on the 2017 statistics, 93% of those enrolled and paying premiums received a subsidy averaging $591.69. If there is a similar subsidy and effectual enrollment for 2018, the total government subsidies North Carolinians will receive will total about $3 million. That is a big number.

Because North Carolina hasn’t expanded Medicaid, there has not been a meaningful decrease in uncompensated care like we have seen in other states. While the cost of uncompensated care went down in 2014 and 2015, it started creeping back up in 2016. In expansion states it decreased 38.9%, and in non-expansion states the average was 3.6%. North Carolina’s average was 5.8%.

Many individuals in North Carolina have seen benefits from the ACA, but businesses have experienced financial and administrative burdens. There are 4.5 million people in the state enrolled in group coverage, significantly more than the roughly 520,000 enrolled in the exchange. Businesses who have fully-insured plans have seen about a 4% higher premium for the Health Insurance Tax on top of their normal year-over-year increases. Self-funded plans had some hefty transitional reinsurance fees that they had to pay from 2014-2016. Additionally, employers have had to offer coverage to anyone working 30 or more hours a week, resulting in increases in coverage and administration costs. Employers also have administrative burdens required under IRS reporting requirements.

Changes to the ACA

The Tax Cuts and Jobs Bill, signed into law by President Donald Trump late last year, effectively repealed the individual mandate. The mandate itself couldn’t actually be repealed, but the penalty for not having coverage was adjusted to $0 beginning in 2019.

Republicans have made three attempts to repeal the law and have come up empty each time. The House passed a repeal bill last May, and the Senate subsequently attempted to pass another version that was ultimately voted down. Another push came with the Graham-Cassidy bill last fall, but once it was clear that the bill didn’t have the votes in the Senate, it was not brought to the floor for a vote. Other than the individual mandate change and the postponement of some other ACA penalties, the law remains intact.

The future of the ACA

I have spent several days in Washington, D.C., recently in meetings with the White House and on Capitol Hill. The “repeal and replace” mantra has quieted a bit during the primary elections. Heading into this midterm election, most Republicans have chosen not to make this the flagship issue that it has been in years past.

However, there is still some noise being made by some Republicans to take one last swing at some version of ACA repeal. The prevailing feeling on Capitol Hill is that while many Republicans would like to do something, they aren’t inclined to take another vote that Democrats can use against them in the midterms only to have the effort again die in the Senate. Additionally, with the flip of Jeff Sessions’ seat in Alabama, the numbers are even tighter in the Senate. Given these variables, it seems that the ACA will remain in its present form through the midterm elections in November.

With 150 years of experience, Scott Insurance is a leader in developing smart strategies and innovative programs customized to the needs of mid-market companies. Scott offers property & casualty, employee benefits, captive insurance and surety bonds solutions, as well as personal risk services. An employee-owned company, Scott is one of the largest independent agencies in the Southeast.

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