The PPACA Verdict: 5 Scenarios

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.