Have Seven Years Gone Down the Drain? Lykes Insurance Advises on Obamacare and Next Steps

TAMPA, Fla., Dec. 7, 2016 /PRNewswire/ -- Business owners across the country are shaking their heads and wondering how the results of the presidential election will affect Obamacare and their current employee health benefits plans.  Individuals are asking the same questions.  Rob Pariseau, CEBS, executive vice president and employee benefit practice leader at Lykes Insurance, shares his thoughts and advice. 

"When I think of the millions of hours spent learning and implementing Obamacare, I can't help but identify with John Belushi as Bluto in Animal House after being expelled from college," says Pariseau. "Do you remember what he said? 'Seven years down the drain.' No one knows what will become of Obamacare, and no one is suggesting that employers cease complying, but here are a few things we do know."

Repeal and Replace

President-elect Trump ran on the concept of repealing and replacing the law. The Republican replacement, their "Better Way" plan, adds medical tort reform and allows interstate health insurance sales to increase competition. It keeps the ban on pre-existing condition limitations and parental coverage to age 26 from Obamacare as well as tax deductibility of employer provided coverage, to a limit. It adds a health insurance tax credit for those self-employed and others with no access to employer coverage, which requires funding.

Repeal is easy.  Replacing is much more difficult and here's why. Obamacare was passed by and can be repealed in the Senate by reconciliation, a rarely used legislative tool that bypasses the self-imposed filibuster requiring 60 votes to act. Reconciliation only requires 51 votes, and the Republicans have 52, so Republicans could repeal Obamacare in the first 30 days of a Trump presidency. Republicans now are debating whether that's their preferred course of action.

Not so fast. Repealing Obamacare would leave nearly 20 million Americans with much more expensive, if not unaffordable health premiums, and in some cases no health insurance -- and no one wants that. According to Senate rules, reconciliation cannot be used on legislation that requires additional funding and replacing Obamacare with the Better Way plan certainly would, so reconciliation is out. Republicans would then need 60 votes to act, which means they need Democrat votes. 

Compromise Possible in 2017?

Republicans are vulnerable in 2017 because if they repeal Obamacare and can't get the needed Democrat votes to replace it, they face the 2018 midterm elections with up to 20 million Americans without health coverage. Not pretty. They may need to compromise to get something passed.

Democrats need to defend 25 Senate seats in 2018. As recently as 2014, Democrats had to defend 21 seats and lost nine. Similar results in 2018 would give Republicans a filibuster-proof majority and carte blanche, so it may be in the Democrats' best interests to compromise in 2017.

And in the meantime, you need to keep going as is.  Check in with your employee benefits advisor to be sure.

But before you get too hopeful, do you remember what became of Bluto? He became Senator John Blutarsky, Washington D.C.!

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SOURCE Lykes Insurance