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Election Impact on Benefits

It appears former Vice President Joe Biden may have secured enough electoral votes to clinch the presidency.�� While Democrats will likely retain a majority in the US House of Representatives, they will hold it with 8 fewer seats as of now, with more seats yet to be determined.

The US Senate appears to be split 50-48 (there are two independents who caucus with 46 Democrats).�� Georgia’s two Senate seats are headed to a run-off election in January.�� Democrats would have to secure both of those seats to effectively have 50 seats and the power of Kamala Harris for tie breaker votes.�� However, they wouldn’t have enough to remove the filibuster, and many speculate that one or both Georgia seats may lean Republican, which would allow them to retain majority control.

With the increasing likelihood that Republicans will hold a majority in the US Senate and Democrats will face a slimmer majority in the US House, a Biden presidency will have an uphill climb to achieve big legislative goals in its first two years.�� So here is where we expect to see action:

• It is abundantly clear that his first priority will be measures to mitigate spread of the novel coronavirus and continuing to extend national emergency and public health emergency declarations to ensure federal relief remains available nationwide.
• A divided Congress is not likely to be conducive to introducing a public health insurance option or measures allowing more Americans to join Medicare.�� However, with the Medicare Part A Hospital Insurance Trust Fund poised to become in 2024, there’s likely to be a heavy focus on getting Congress to enact bipartisan measures to avoid 17% cuts (about $1,000 per beneficiary) that would be needed to keep the program alive without Congressional intervention.
• We expect many measures will be taken to strengthen the ACA, including bolstered outreach and support for the health insurance exchange marketplace and related subsidies.
  • Outreach funding has been cut by 90% and would likely be somewhat or fully restored
  • 45-day annual open enrollment periods in the public health exchange marketplace would likely revert back to 90 days
  • Cost sharing reduction subsidies will have to start being paid again per a federal appeals court in August 2020 that these subsidies should not have ceased when Congress failed to appropriate funds for them
  • Regulatory actions to relax short-term limited health plans, roll back certain aspects of Section 1557, and extend broad contraceptive exemptions are all highly likely to be repealed through a formal rulemaking process
  • There may even be an attempt to provide a solution to the “family glitch” so families with access to affordable single coverage but very expensive family coverage might still be able to qualify for tax credits in the public health exchange marketplace
  • The budget reconciliation process might be for provisions affecting revenues and outlays, such as enhancing tax credits for public health exchange marketplace coverage and additional pandemic funds

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IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information.

This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.