Things on the healthcare front have been pretty quiet as of late. Thanks to the coronavirus crisis, a political hot potato that is healthcare reform has been sitting largely untouched for months. That could change within the next 6 to 8 weeks. On the horizon are a potential expansion of Medicare and the pending SCOTUS decision on the validity of the Affordable Care Act (ACA).
Expanding Medicare by lowering age requirements represents a significant shift in the number of consumers purchasing commercial health insurance. It could mean less revenue for insurance companies and bigger budgets for both Washington and the states. In terms of the SCOTUS ruling, invalidating the ACA would return the health insurance industry to what it was prior to former President Barack Obama's signature legislative achievement.
Willing to Expand Medicare
In the weeks leading up to his inauguration, President Joe Biden wasn't ready to commit to Medicare expansion. Spending political capital on an evenly divided Senate that might not go for it didn't seem worthwhile. But now that Senate Democrats have shown a willingness to force popular legislation through without Republican support, the chances of Medicare being expanded have increased.
What would such an expansion mean? Senate Democrats are pushing hard for a number of reforms:
- Eligibility Age – The most important proposal would reduce Medicare's eligibility age from 65 to 60. Doing so would mean millions of Americans now covered by commercial insurance being shifted to government healthcare rolls.
- Benefits and Costs – Democrats want Medicare to offer a larger basket of benefits including dental, vision, and hearing coverage. Reducing out-of-pocket costs for Medicare recipients is also on the table.
- Drug Prices – Reducing drug prices has been a political priority for years. Democrats want Biden to address prescription drug prices in any Medicare expansion.
Though the president has signaled willingness to take on healthcare reform, it is unlikely any Medicare proposals will be included in the upcoming American Families Plan. The White House has said it prefers to address healthcare reform separately.
SCOTUS Ruling on the ACA
Regardless of what the administration does regarding Medicare expansion, the Supreme Court's pending ruling on the validity of the ACA stands to impact healthcare more than anything else. The court heard arguments regarding the severability of the individual mandate back in November. A ruling is expected by late May or early June.
The first time the ACA went to court, SCOTUS upheld the law by ruling that the individual mandate was a tax rather than a coercive measure forcing people to buy something. But the GOP's 2017 tax bill effectively eliminated the individual mandate. Is the entire ACA invalidated as well? We await the court's decision.
Should the court rule that the individual mandate is inseverable, the entire ACA gets thrown out. That would bring an immediate end to federal healthcare exchanges, government limits on health insurance company profits, and a whole host of other reforms enacted by the ACA.
New Health Insurance Policies
The biggest change would be the plethora of new health insurance policies that carriers would have to come up with. Eliminating the ACA could make this fall's enrollment period rather challenging. It would force general agencies and brokers to immediately begin working with carriers on crafting new benefits packages.
Things have been quite quiet on the healthcare front for a while. But the peace and quiet looks like it is coming to an end. As a broker, you might want to start getting ready for a potential expansion of Medicare and the possibility that the ACA could be overturned.