After a controversial election, Joe Biden is taking the reins as commander in chief. Since Biden’s victory, there has been a change in attitude about the future of the Affordable Care Act (“ACA”). The Trump administration spent a good portion of its four-year term trying to dismantle the law but was largely unsuccessful. However, even with Biden as president, no one is entirely certain about the fate of the ACA.
It is hard to know what changes to anticipate, as so many factors and uncertainties are at play. While we do not have a clear picture right now, certain outcomes could give us a better idea about what could happen.
What does Biden plan to do with the ACA?
Biden said he wants to do more than preserve the ACA; he wants to expand on it by increasing eligibility for subsidies. Biden is also proposing a new public option, allowing Americans to choose a government-funded insurance plan if they wish. This alternative would be similar to programs like Medicare or Medicaid. Biden promoted the idea of a public option on the campaign trail in 2020 but may face some challenges enacting it.
Biden is also advocating for legislation that would protect patients from surprise medical bills and high drug prices.
Even with everything Biden is introducing, his ability to put his plans into action depends on Congress.
A Democrat majority Congress gives Biden leverage
As of Jan. 6, 2021, there are now 50 Democrats in the Senate, with Vice President-Elect Kamala Harris acting as the tiebreaker. But while Democrats now holding a slight majority in Congress, they will be working on a tight margin if they want to make any changes to the ACA, which may require a budget reconciliation approach. House Speaker Nancy Pelosi (D-Calif) has already indicated the House will use budget reconciliation for ACA related matters, such as expanding subsidies to additional income brackets. Congress could also pursue additions to the ACA drafted by the House in 2020 that never made it through the Republican-controlled Senate. On top of subsidy expansions, Congress could expand ACA tax credits and roll back Trump Administration’s previous guidance on Section 1332 (State Innovation Waivers).
A Democrat Senate majority also makes it easier to confirm Biden’s picks for crucial health positions in his cabinet. Some of his current nominees include Xavier Becerra as the Secretary of the Department of Health and Human Services and Neera Tanden for Office of Management and Budget. Becerra is the Attorney General of California and led the charge for defending the ACA in its most recent legal challenge.
In addition to confirming Biden’s cabinet, Democrats in Congress can facilitate the appointment of federal judges. Yet, Trump and the Republican-led Senate appointed more than 220 judges to the federal bench over the past four years, leaving Biden with less than 50 vacancies to fill. Biden has not yet opined on expanding judgeships at the circuit and district court levels.
The pending case in the Supreme Court
The California v. Texas case brought the ACA back to the Supreme Court. However, multiple reports say it is unlikely the law will get struck down, at least not in its entirety. Both Chief Justice Roberts and Associate Justice Kavanaugh, the two swing votes in the case, have said they believe the law could still remain intact, even if the court votes to remove the individual mandate.
If the ACA is struck down in full, however, Congress can implement a new law with similar provisions.
With the Democratic majority, Congress can also take a proactive approach to enact legislative changes prior to the Texas court decision, which is not expected until April 2021. These changes may include increasing the individual mandate penalty from $0, creating a provision that severs the ACA and the individual mandate, or removing the individual mandate from the ACA.
Biden could use executive authority to support the ACA
Biden may choose to implement executive orders regarding the ACA. He can reverse the Trump administration’s cutbacks on the ACA and target policies that posed challenges for people wanting to enroll in the healthcare marketplace. Some of these changes may include:
- Revising the premium adjustment methodology.
- Eliminating the “double billing rule” typically used for abortion services.
- Promoting access to nonprofit navigators.
- Undoing multiple changes part of the “market stabilization” rule.
- Addressing the contraceptive mandate and its broad exemptions.
These changes and more can happen, so long as the Biden administration complies with rulemaking guidelines. In the United States, regulatory changes cannot legally occur without giving notice and an explanation as to why such changes are necessary. If Biden decides to take executive action, he might face an uphill battle based on proposed rules the Trump administration is attempting to implement. If passed, these rules would require a regular reassessment of federal guidelines, making it harder for the Biden administration to issue guidance on reversal of ACA rollbacks.
Biden could also implement operational changes and communicate to Americans that HealthCare.Gov is open for enrollment and announce special enrollment for anyone without insurance to buy a plan from the health care marketplace. Such actions would follow the 2021 open enrollment that ended on Dec. 15, 2020.
We are here to help you follow the latest updates
It can be hard to digest all the change and uncertainties regarding the ACA. But as of the date of this publication, there has been no changes to the 2020 reporting requirements. Future signs, such as the potential elimination of the “good faith effort” transition relief for 2021 along with a Democratic Administration, point to the likelihood of greater enforcement of the ACA and increased penalty risk. To minimize the risk to your company, it is important to partner with an ACA reporting solution that is built for penalty mitigation.
There are a lot of potential outcomes that could happen. And while we cannot predict the future, we will give you as clear of a picture as possible and inform you of any new updates along the way. For more updates on ACA news compliance, check out blogs like this and more on our website.
Updated: January 15, 2021