NAIFA GovWatch

Efforts to Repeal New Health Law Begin

Issue: Health Reform

Date: January 6, 2011

Actions Taken: As expected, House GOP members have introduced legislation (H.R. 2) to revoke the Affordable Care Act (ACA), enacted last March as well as a resolution that calls for the development of an alternative health reform plan.

H.R. 2 completely repeals the new law and the resolution directs House committees to produce legislation that replaces the previous approach, fosters economic growth and private sector job creation, lowers health care premiums and increases the number of insured Americans.

The Administration countered by issuing The Price of Repealing the Affordable Care Act and Health and Human Services Secretary Kathleen Sebelius, Labor Secretary Hilda L. Solis, and Treasury Secretary Tim Geithner have written House Speaker John Boehner (R-OH) urging him to reconsider holding a vote to repeal the health care law.

Next Steps: The repeal bill and a resolution directing health care committees to write replacement legislation are expected to come up for a House vote on January 12. It is probable that the GOP House will pass H.R. 2. However, it will likely fail against the Democratic majority in the Senate. The House will then seek to overturn key portions of the law likely beginning with the dreaded expansion of 1099 filing requirements. In addition to the 1099 expanded reporting repeal, NAIFA modification priorities include:

Medical loss ratio. Removal of agent compensation from the MLR calculation and transition rules are needed to ensure professionals remain in the system to assist consumers and to allow companies the time necessary to modify their operations to comply with the MLR standards. Agent commissions should be excluded from the MLR calculation to preserve existing cost-saving practices in current health insurance markets, advance the intent of the MLR provisions to reduce overall spending on administrative costs, and maintain an important operational convenience for small businesses and individuals.
Guaranteed issue without a strong purchase incentive. A meaningful mechanism is needed to discourage healthy individuals from waiting until they are ill or injured to purchase coverage. Since the monetary penalty for not purchasing health insurance would be far lower than the cost of the policy itself, it simply wouldn't be financially rational for health individuals to purchase insurance prior to becoming ill.
3.8 percent tax on unearned income (including annuities). The price of health reform should not come at the expense of responsible consumers who plan for their retirement needs and the financial security of their families.
CLASS. The new federal long-term care program continues to be a concern. While helping people plan for their long-term care needs and allowing them to purchase quality insurance products at their place of employment should be part of our nation's answer to the long-term care financing challenge, we believe there are better ways to achieve these goals than creating a federal long-term care program.
HSAs and FSAs. High-Deductible Health Plans and Health Savings Accounts (HSAs), as well as Flexible Spending Arrangements (FSAs), offer affordable coverage options that help Americans spend their health care dollars more efficiently. Including access to HSAs to individuals purchasing health insurance through exchanges will provide more options to Americans purchasing their insurance through the exchanges. Limiting FSA contribution limits will alternatively raise health costs for individuals with high health care expenses.
Protecting employer-provided health benefits should be fundamental to reform efforts. Legislation should build on the employer-based system and we remain concerned that "Free Choice" vouchers will be detrimental to employer plans by allowing workers to use employer funds to purchase plans outside the employer plan.
Cost to clients. Better cost control is needed to ensure the affordability and sustainability of private insurance choices.

NAIFA Staff Contact: Diane Boyle, Vice President - Federal Government Relations

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