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The PPACA Verdict: 5 Scenarios

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Regardless of what the Supreme Court rules, Congress will need to evaluate modifications to the remaining law(s) to ensure access to affordable health services in a sustainable competitive insurance market without jeopardizing the high quality of care and service expected by consumers.

Following are five likely scenarios and NAIFA’s asks of Congress under each:

Scenario 1 – Individual mandate struck down, but the rest of the bill left intact

Striking only the individual mandate will create a system that encourages individuals to purchase coverage only after becoming sick or injured. The Congressional Budget Office estimates that eliminating the individual mandate (and leaving in place the new taxes and spending cuts) would save $282 billion over 10 years.

NAIFA’s Asks of Congress:

  • Repeal guaranteed issue and no pre-existing condition requirements
  • Remove agent commissions from the medical loss ratio (MLR)
  • Repeal the CLASS Act
  • Raise or remove the contribution cap for flexible spending arrangements (FSAs)
  • Reverse the 3.8 percent tax on unearned income (including annuities)
  • Enhance HSA and FSA use
  • Create purchase incentives
  • Build on the employer-based system
  • Reduce consumer costs

Scenario 2 – Mandate and insurance reforms struck down

Removing the insurance reforms along with the individual mandate would be less disruptive to the market. The Congressional Budget Office estimates that striking both the mandate and insurance reforms (and leaving in place the new taxes and spending cuts) would save $500 billion over 10 years.

NAIFA’s Asks of Congress:

Same as Scenario 1 without the need to remove the guaranteed issue/no pre-existing condition requirements.

Scenario 3 – Medicaid Expansion struck down

Striking the Medicaid expansion is estimated to impact 16 million individuals who will make too much money to meet current Medicaid eligibility requirements, but will not make enough to be eligible for the law’s tax credits to purchase insurance. 

NAIFA’s Asks of Congress:

Same as Scenario 2 with an emphasis on the expansion of purchase incentives specifically expanding the eligibility of tax credits to those impacted.

Scenario 4 – Entire law struck down

While repealing the entire law would seem to leave us where we were before the enactment of the new law, unraveling many of the provisions that have already gone into effect will be complicated and costly. The Congressional Budget Office estimates that complete repeal will add roughly $100 billion over 10 years to the deficit.

NAIFA’s Asks of Congress:

NAIFA would turn to our pre-PPACA goal of ensuring affordable access to all Americans. Basically, our advocacy would call for proposals to:

  • Provide tax incentives and deductibility of premiums
  • Make available affordable basic benefit policies
  • Allow for voluntary coverage
  • Credit individuals with prior insurance coverage
  • Remove barriers that limit insurance options
  • Provide assistance to those who can’t afford insurance
  • Establish state risk pools
  • Allow affordable coverage
  • Eliminate cost shifting
  • Reduce administrative expenses
  • Establish comparative effectiveness research
  • Increase consumer education
  • Expand wellness and disease-prevention programs
  • Create cost transparency
  • Reduction in defensive medicine
  • Modified community rating
  • Provide consumer assistance

Scenario 5 – Entire law upheld or decision delayed 

In this scenario, the Court upholds the law or decides the health law’s penalties, which will not be due until 2015, can be considered a tax. The Anti-Injunction Act says that taxes cannot be challenged in court until they are first levied. 

NAIFA’s Asks of Congress:

Same as Scenario 2.

For more on PPACA, see:

PPACA: A History

Employers Convinced Mandate is Dead

Undoing Health Reform Could Have Messy Ripple Effects


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