After a brief reprieve, a familiar storyline is resurfacing: former President Donald Trump against the ACA. And with the 2024 election a few short months away, Trump is once again campaigning against the healthcare law.
In November, the 2024 Republican frontrunner said on social media that “Obamacare Sucks… I want to REPLACE IT with MUCH BETTER HEALTHCARE.”
And that’s not the first time he’s made a comment of that caliber.
A Long and Winding Road with the ACA
Trump has a history with the ACA. When he ran in the 2016 election, he campaigned on an ACA repeal and replace. On December 22, 2017, he signed The Tax Cut and Jobs Act of 2017 into law that effectively eliminated the Individual Mandate because it zeroed out the penalty amount that was imposed if a U.S. resident failed to obtain coverage for a particular month.
The change took effect in 2019 and it spurred a constitutional debate on the largest stage—the Supreme Court. Reed O’Connor, a federal judge from Texas, asserted that the ACA was unconstitutional without the Individual Mandate. While ultimately unsuccessful, it laid the groundwork for more attacks on the landmark healthcare law.
Another case involving O’Connor and the ACA is currently percolating as well. And this time it’s an attack on the law’s free preventive care services, to which Biden issued a nationwide injunction to preserve its benefits.
Thus, if Trump were to win the 2024 presidential election, it likely means more attempts to dismantle the law will follow.
Republican ACA Alternatives
Trump has yet to provide a concrete replacement for ACA. However, if Trump, or another Republican takes the White House this election, American healthcare will certainly see significant changes.
The most notable relates to available subsidies, also known as Premium Tax Credits (PTCs). These subsidies reduced barriers to affordable healthcare for most of the U.S., expanding eligibility to individuals with incomes up to 150% of the Federal Poverty Level (FPL) to obtain coverage for $0 a month.
The PTCs apply to those with greater incomes as well. Americans with incomes at 400% of the FPL and beyond can obtain coverage for no more than 8.5% of their household income.
First made available by the American Rescue Plan in 2021, Biden’s Inflation Reduction Act extended PTC eligibility through 2025 and if he were to remain the incumbent for another term, the extended PTCs would remain and possibly even see another extension.
Trump and several other Republican contenders, however, want to roll back the subsidies. Drew Altman, CEO of the Kaiser Family Foundation (KFF) recently told NBC News, “It’s difficult to see the subsidies continue if Republicans control every branch of government and Trump is president.”
Chris Meekins, health policy research analyst at Raymond James investment firm, shared a similar sentiment: “If there’s a Republican president, it is pretty unlikely you would see those expanded subsidies continue.”
What’s at Stake?
While a total ACA repeal and replacement is unlikely, if the Republican party takes office in 2025, PTC eligibility will likely come to an end.
Some experts predict that more than 3 million Americans could lose coverage, including residents in states that have seen an uptick in ACA enrollment, such as Florida and Texas. Coupled with reduced funding and outreach for open enrollment, which Trump previously did, ACA healthcare participation would take a major hit.
Key provisions of the ACA would likely be dialed back as well, including the previously mentioned ACA preventive care services.
Support for the ACA Holds Steady
Meanwhile, the ACA sits on solid ground in the eyes of the general public, with 6 in 10 Americans having a favorable opinion of the healthcare law, according to a recent KFF Report.
While not an all-time level of support for the ACA, it’s close to it, and a solid representation of how the country feels about the now 14-year-old healthcare law.
It’s further evidenced by the fact that nearly 75% of adults are concerned they won’t be able to pay for medical expenses, the same KFF report finds.
Enrollment is also growing, thanks in part to the extended open enrollment periods that the Biden administration introduced. More than 21 million Americans obtained ACA coverage through state and federal ACA marketplaces this most recent enrollment — that’s up from last year’s 16 million. And PTC eligibility expansion has played a key role in driving that increase.
ACA Implications for Employers
While Trump may tout a presidential comeback and an ACA repeal and replace, the law as a whole is likely to remain. As we’ve discussed, support for the law holds steady, enrollment sits at record highs, and individual states are incorporating portions of the ACA into their legislature.
And that means that employers must continue carrying out the responsibilities associated with the ACA’s Employer Mandate, which requires organizations to offer Minimum Essential Coverage that is affordable and meets Minimum Value to at least 95% of their workforce and their dependents.
Failing to meet these requirements could result in a 4980H penalty assessment from the IRS, which the IRS identifies by cross-referencing PTC information with the individual’s 1095-C, filed by their employer.
And with greater PTC eligibility on the horizon for the foreseeable future, that means more penalty risk for employers.
Get Help with ACA Compliance
Best practices for minimizing ACA penalty risk with the ACA’s Employer Mandate encourage implementing a monthly process for verifying coverage eligibility, tracking enrollment, and documenting benefits details.
Trusaic’s ACA software solution accomplishes all of this and more. Plus, it integrates with major HCM platforms, like ADP, Workday, and SAP to ensure a seamless flow of payroll and benefits information into the cloud-based solution, reducing time spent and human error with ACA reporting.
