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Post Election: How this Affects the Industry
Joel Wood Senior Vice President Government Affairs
Exit Polling: Demographics
Trump exceeded expectations in several key demographics while Clinton underperformed:
Voting Bloc Trump ‘16 Clinton ‘16 Obama ‘12 Romney ‘12
Black 8% 88% 93% 6%
Hispanic 29% 65% 71% 27%
Female 42% 54% 55% 44%
Male 53% 41% 45% 52%
White Female
53% 43% 42% 56%
White Male 63% 31% 38% 62%
Veterans 61% 34% 39% 59%
White College Grad 49% 45% 42% 56%
White Non- College Grad
67% 28% 36% 61%
Millennials 46% 54% 60% 37%
2018 Senate Races
Budget among many lame duck priorities
October 12, 2016 | Katharine Conlon
Source: National Journal Research, 2016.
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■ Senate in session ■ Both chambers in session
November December
House
16 Days left
in session
Senate
20 Days left
in session
Other possible congressional priorities in the lame duck session Criminal justice reform: Sentencing Reform and Corrections Act of
2015 may be voted on by the end of the year Energy: Water Resources Development Act to be revisited during
lame duck session International trade: congressional vote on TPP to happen after
November election LGBT rights: Rep. Maloney (D-NY) expected to reintroduce anti-
discrimination amendment Mental health reform: congressional consideration of Mental Health
Reform Act of 2015 expected this fall
Current continuing resolution expires Dec. 9th
Congress leadership election process is expected to take place within the first few weeks after the election
Trump promises to repeal Obamacare
Donald Trump’s promises for the first 100 days
Broader legislative that Trump will push in Congress Middle Class Tax Relief Act
“An economic plan designed to grow the economy
4% per year and create at least 25 million new jobs
through massive tax reduction and simplification, in
combination with trade reform, regulatory relief,
and lifting the restrictions on American energy.”
American Energy & Infrastructure Act
“Leverages public-private partnerships, and private
investments through tax incentives, to spur $1 trillion in
infrastructure investment over 10 years. It is revenue
neutral.”
School Choice and Education Opportunity Act
“Redirects education dollars to give parents the right to send
their kid to the public, private, charter, magnet, religious or
home school of their choice. Ends common core, brings
education supervision to local communities.”
Repeal and replace Obamacare “Fully repeals Obamacare and replaces it with Health
Savings Accounts.”
End Illegal Immigration Act
“Fully-funds the construction of a wall on our southern
border with the full understanding that the country
Mexico will be reimbursing the United States for the
full cost of such wall; establishes a 2-year mandatory
minimum federal prison sentence for illegally re-
entering the U.S. after a previous deportation.” 8. Restoring Communities Act
“Reduces surging crime, drugs and violence by creating
a Task Force On Violent Crime and increasing funding
for programs that train and assist local police;
increases resources for federal law enforcement
agencies and federal prosecutors to dismantle criminal
gangs and put violent offenders behind bars.”
Average Projected Premium Increases in
State Exchanges with Key Senate Races
30%
44% 13%
30%
40%
36%
20%
20
%
88%
**POLITICO; http://www.politico.com/story/2016/08/obamacare-senate-races-227428
Health care reform: what will Trump do? Repeal and replace scenarios for 2017
Will it pass?
Total repeal
• Unlikely in the short term – the 2017 markets are enrolling and premiums are set. 2018 would be the earliest the ACA could be repealed, and a sudden loss of health insurance for more than 20 million people would be politically damaging in the future STOP
Defund • As defunding would cripple the ACA, legislation immediately removing funding would likely not pass because it
would be too significant of a disruption to the health insurance market. Additionally, last year’s House bill that defunded the ACA included a two-year transition period, and lawmakers would likely include it again if they opt to take this approach
Replace: with what?
The marketplaces and associated subsidies: shutting down marketplaces could take away insurance plans and raise premiums, which would likely be politically damaging in the future
• Medicaid expansion: GOP could convert Medicaid expansion to block grants
• Removal of <26 year-olds’ right to remain on parents’ plan: provision is likely too popular to repeal
• Medical Device Tax: Could be repealed as the GOP sees the tax as stifling to innovation
? • Repeal of the Cadillac tax: “A Better Way” agenda also proposes a cap on tax exclusion for plans
? • Repeal of Individual mandate: likely would need a GOP super majority to repeal the individual mandate
• Preexisting condition: Politically, this would be hard for the GOP to pass
? • 10 essential benefits: a replacementplan may cut down on insurance regulations
? •
?
?
Trump adopts Ryan's ideas into his health policy agenda
Health Care Program Trump
Affordable Care Act (ACA) O Repeal & replace with health savings accounts (HSAs)
Prescription drug prices P Lower barriers to market entry and to trade to allow drug makers from overseas to sell in the
U.S.
Medicaid expansion ? Unclear, Trump proposes state block-grants for Medicaid
Medicare buy-in ? Unknown, Trump promised to improve Medicare by making “the country rich”
Public option O Does not support
Mental health parity P Supports current reform plan in Congress
Provider price transparency P Require transparency from doctors and hospitals
Sale of health insurance
across state lines P Allow health insurance to be sold across state lines
Implement high risk pools P Work with states to implement high risk pools
Details on Trump’s platforms on health care
27
“This will have tragic consequences for tens of millions
of people. We at Families USA are going to be on a total
war footing to make sure this never comes about.”
– Ron Pollack, Families USA, Nov. 9
Repeal and replace – with what?
Buying across state borders
Association health plans
Medical malpractice reform (really? Trump?)
HSAs
Repeal and replace – with what?, cont.:
Off-ramp for exchanges … to high-risk pools?
Ryan healthcare Blueprint – tax the 1%?
Individual market premiums tax deductible
Medicaid block grants – roll back coverage?
Health Insurance Coverage In 2016
For People Under 65
Primary Drivers To The Employer-Provided Group Platform:
Pre-tax treatment of both employer and employee paid premiums
Ease of distribution from carrier perspective
Expectation by employees that good
employers will provide benefits
Largest Tax Expenditures, FY 2014
$164.2B Exclusion of employer health insurance
$162.7B
Exclusion of employer pensions
$99.8B Mortgage interest deduction
$76.2B
Exclusion of Medicare
$71.4B Capital gains rates
$58.4B
Earned Income Credit
$51.6B Deduction of charitable contributions
Future of Employer-Sponsored Coverage
“Historic Accident” President Barack Obama
Clinton Global Initiative, Sept. 24, 2013
“Historic Anomaly” Senator Ted Cruz
Senate Floor, Sept. 24, 2013
7. Tax Fairness at Work: For
the first time, the federal
government will give
everyone the same tax relief
for health insurance,
regardless of where it is
obtained– at work, in the
marketplace or in an
exchange. Employees will
not be able to double dip,
however. Other tax relief,
such as the ability of an
employer to purchase
insurance with pre-tax dollars,
will be clawed back or topped
up to the tax credit amount.
39.1%
25.0%
Top Statutory Corporate Tax Rate by OECD Nation, 2013
So, for employers, let’s recap:
No exchanges/off-ramp in 2018?
No mandates
No reporting requirements for mandates
No Cadillac tax
No reporting requirement for Cadillac tax
No other ACA taxes – HIT/medical device
Recap, cont.:
Cap on employer-provided health benefit?
Tax credit for purchase of health insurance for all?
Expansion of HSAs – pre-tax contributions in individual market
EEOC/APA/GINA changes
What other kinds of reg reform?
Rollback of fiduciary duty rule for investment advisors?
Joint employer requirements (McDonalds case) overturned?
Overtime regulations – tension between populist vs.
Republican agenda?
• The Department of Labor announced on May 17th a final rule raising the minimum salary threshold required to qualify for FLSA “white collar exemption” from $23,660 to $47,476
• The DoL is instituting an “automatic update” for the salary threshold to occur every three years beginning in 2020
Department of Labor Final Overtime Rule
• The final rule will allow up to 10% of the salary threshold to be met with nondiscretionary bonuses, incentive payments, or commissions that are paid quarterly or more frequently
• The final rule did not change the current job-duties-related tests • The final rule will go into effect on December 1st, 2016.
Donald Trump’s list of potential nominees meets expectations, largely white and conservative
Donald Trump’s Supreme Court shortlist
None of Donald Trump’s
possible nominees are
people of color.
Steven M. Colloton (IA)
8th Circuit of US Court of Appeals
Allison H. Eid (CO)
Colorado Supreme Court
Raymond W. Gruender (MO)
8th Circuit of US Court of Appeals
Thomas M. Hardiman (PA)
3rd Circuit of US Court of Appeals Raymond M. Kethledge (MI)
6th Circuit of US Court of Appeals
Joan L. Larsen (MI)
Michigan Supreme Court
Thomas R. Lee (UT)
Utah Supreme Court
William H. Pryor Jr. (AL)
11th Circuit of US Court of Appeals
David R. Stras (MN)
Minnesota Supreme Court
Dian S. Sykes (WI)
7th Circuit of US Court Appeals
Don R. Willett (TX)
Texas Supreme Court
Post Election: How this Affects the Industry
Joel Wood Senior Vice President Government Affairs
