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Lawmakers Move Toward Affordable Care Act Repeal

January 23, 2017

In the first weeks of 2017, Congressional Republicans demonstrated their commitment to repealing the Affordable Care Act (ACA) by setting in motion its dismantling through the budget process.

The legislation, a budget resolution, passed by a narrow margin, 51-48, in the Senate on January 12, then passed in the House the next day. Included in the legislation are instructions permitting ACA repeal legislation to move through the Senate via a process that prevents a filibuster by Democrats. No Democrat in either the House or Senate voted for its passage and Sen. Rand Paul (R-KY) was the only Republican to vote against the budget resolution. 

While swift passage of this legislation indicates that ACA repeal remains a high priority for both Congressional Republicans and the Trump administration, Republican plans to replace it are still unsettled and will likely remain unclear until further budget efforts and comprehensive tax reform are underway. 

The budget resolution requires four committees to identify at least $1 billion each in deficit reduction over 10 years (fiscal years 2017 through 2026) and reserve funds to accommodate repeal and replacement of Obamacare.

Hours after his inauguration, President Donald Trump issued an executive order calling on federal agencies “to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.” It is unclear exactly what steps federal agencies can or will take as details remain sparse.

There are numerous implications of ACA repeal for higher education, which present both complications and opportunities to address longstanding concerns. There is a high probability that ACA reform efforts will include repeal of the commonly known “Cadillac tax,” the provision that mandates a 40 percent excise tax on health plans with high premiums.

Repeal efforts could also provide clarification on the permissibility of subsidized student health insurance plans (SHIPs). While the Internal Revenue Service has been in the process of determining whether SHIPs should be considered scholarships or employer payment plans under ACA provisions, its repeal would likely eliminate any further concern regarding the plans.  

Some student advocates and higher education representatives have expressed concern that repeal would result in students being pushed out of high quality plans. Additionally, some institutions may experience new challenges if the ACA provision allowing students to remain on their parents’ health plans until age 26 is repealed. However, without further detail, it is difficult to conclusively determine the impact on college students.

For colleges and universities with medical schools and associated hospitals, the potential implications of ACA repeal and reform loom large. The Association of American Medical Colleges urged President Donald Trump, in a December 2016 letter, to consider the serious consequences of repealing Obamacare without simultaneously replacing it. The American Hospital Association and Federation of American Hospitals echoed similar concerns in a joint letter.

It is impossible to predict the future of the ACA; however, it is certain that all institutions will be impacted. NACUBO will continue to monitor the debate and weigh in on behalf of its membership.

Contact

Megan Schneider
Assistant Director, Federal Affairs
202.861.2547
E-mail

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail