The public has spoken. With the Republicans sweeping the election, an upheaval is upon us. What does this mean for health care for your clients? Future President Trump and Congress will have the power to repeal the Affordable Care Act and we will likely see movement on this in the first 100 days of the new administration.

Filibuster could occur in the Senate to mitigate total repeal. There will also be significant backlash from sudden death of health insurance for the 20 million Americans newly covered under the ACA. Because of this, we will more likely see a measured dismantling of major Affordable Care Act provisions such as the mandates that individuals purchase health insurance coverage, restructuring of premium subsidies, and stopping minimum essential benefits such as mental health coverage and pregnancy coverage.

Unfortunately, Trump has shared very little about his plans for replacement of the Affordable Care Act. So far, he has four proposals that will affect clients directly.

(Bloomberg News)
Planners should be prepared to advise clients on how a Trump administration will affect health care costs. (Image: Bloomberg News)

Back to Medical Underwriting
Guaranteed issue insurance will go away and health insurance will go back to being medically underwritten. This is great for healthy people. Insurance cost for that cohort will go down. Costs will increase significantly for people with health issues. If a person becomes unemployed and has not maintained continuous coverage, coverage will only be available through high-risk pools which historically have not provided good benefits.

If employer mandates to provide health insurance are also rescinded, it may be very difficult for people with significant health issues to get coverage. Before the Affordable Care Act, I use to teach advisers how to “pretty up” their clients so they could improve their chances in underwriting for health insurance. It looks like I may need to update that talk for the future.

Insurance Sold Across State Lines
Selling insurance across state lines is supposed to increase competition and reduce costs by allowing insurance companies to locate in states with the fewest regulations.

(Bloomberg News)
A demonstrator holds sign in support of President Barack Obama's health care law. (Bloomberg News).

Historically, some states have provided broad protections to consumers such as mandated pregnancy coverage, minimum benefits and broad access to alternative medicine. In these states, cost of coverage is higher. If insurers from a state that provides minimum protections can sell policies in a state with broad protections, theoretically people could buy the cheaper policies with less protection.

Consumers will need to evaluate their policies carefully to make sure they have the benefits they need.

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It remains to be seen whether insurance companies will move across state lines. Insurers have to negotiate rates with local hospitals and doctors. This may be hard to do in a market where an insurer doesn’t physically have a presence.

All Health Insurance Payments Tax Deductible
Health insurance payments are currently tax advantageous only if you purchase your insurance through an employer or if you are self-employed. People who are not employed and people who are employed but are not provided coverage through their employer cannot deduct their health insurance premiums. Making all health insurance premiums tax deductible will even the playing field and will allow individuals wider choices in purchasing their health insurance.

Provide Wider Transparency in Medical Billing
Healthcare organizations will be required to provide transparency in their charges. This will allow consumers to shop around for their care and find the best prices. This is fine if you are healthy and have the time. However, people who are acutely ill or with serious diseases may not have the time and energy to investigate costs. As a value add to clients, advisers can provide assistance in this arena

Pendulums swing. Many people forget about the early days of health care when insurers could cancel a policy after a patient develops an illness and more recently when 50 million people were without any coverage. The Affordable Care Act fixed many issues but at too high a cost. Let’s hope the pendulum swings back to lower costs, yet provides the health care our country needs.

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Carolyn McClanahan

Carolyn McClanahan

Carolyn is a CFP and M.D., and is the director of financial planning at Life Planning Partners in Jacksonville, Florida. Follow her on Twitter at @CarolynMcC.