For years, the Republican-controlled Congress has vowed to repeal or significantly scale back President Obama’s landmark legislation – the Patient Protection and Affordable Care Act (the “ACA”). During his campaign, President-elect Donald Trump repeatedly promised that he would “immediately repeal and replace” the ACA upon taking office. Assuming Trump follows through on his promise, the ACA’s days are likely to be numbered, at least in its current form. The scope of such repeal remains uncertain, however. Trump has indicated that the ACA cannot simply be repealed – it must be replaced. To date, he has not provided the details of any alternative to the ACA.
Under the current House proposal, the ACA’s individual and employer mandates would be repealed outright. Although the controversial excise tax on high-cost health care (i.e., the so-called “Cadillac Tax”) would also be repealed, the proposal would put a cap on the deduction that employers can take for the cost of healthcare provided to employees. It is also expected that the proposed alternative would give tax credits to individuals without employer-provided health coverage and expand the tax benefits associated with health savings accounts. Certain popular aspects of the ACA, such as the prohibition of preexisting condition exclusions, dependent coverage through age 26 and Medicaid expansion, would remain in place. Democrats are likely to strongly oppose the House proposal. There probably will be little that Democrats will be able to do, however, to stop the repeal/replacement of the ACA facing Trump and a Republican-controlled Congress.
© 2016 Proskauer Rose LLP.
