Cross-Border Health Care Concerns about Obamacare Repeal

Update: April 4, 2017
Since the publication of my blog above in February, there have been some developments on the US health care front summarized here:
President Trump: Update on Key Cross-Border Issues

Please see my May 2017 updated blog post here

One of President Trump’s main campaign promises was to overhaul the U.S. health care system by abolishing the Affordable Care Act (“ACA”), or “Obamacare.” It wasn’t surprising, then, that one of President Trump’s first actions in office was to sign an executive order urging his administration to curtail the law.

But can President Trump simply repeal Obamacare with the stroke of a pen?

The answer is no. The ACA can only be repealed or replaced if Congress passes new legislation. Since the Republicans control both chambers of Congress, however, it seems inevitable that major changes are coming—we just don’t know when or how the ACA will change.
The current climate of uncertainty extends northward, as Canadians planning to move stateside wonder about their future ability to obtain private health insurance coverage in the U.S.

One of the key pillars of the ACA, known as “guaranteed issue,” is that insurers are required to cover all applicants regardless of age or pre-existing conditions. This provision became law in 2014—with the potential dismantling of Obamacare on the horizon, this concern re-emerges for many of our Canadian clients who are considering a move to the U.S.

The news on this front is good—because the Republicans only have a simple majority in the Senate (they hold 52/100 seats rather than 60/100), they can only use a process known as “budget reconciliation” to repeal parts of the ACA. Since budget reconciliation only allows changes to laws that affect government spending and taxation, they cannot use it to remove the guaranteed issue provision of the ACA.

This means that even with President Trump in power and the Republicans in control of Congress, Canadians will likely continue to be able to obtain U.S. health insurance regardless of age or pre-existing conditions.

That said, the Republicans can still use budget reconciliation to dismantle other parts of the ACA, which could destabilize the U.S. health insurance market by driving up insurance premiums, for example.

Most importantly, however, Canadians moving to the U.S. can take some comfort in knowing that the guaranteed issue provision appears likely to remain enshrined in whatever law ultimately replaces Obamacare (Trumpcare?).

To discuss U.S. health care planning or any other area of U.S./Canada planning, MCA Cross Border Advisors is prepared to answer your questions.

For more information on how President Trump’s proposed policies on tax and immigration law might affect Canadians moving to the U.S., read Matt Altro’s recent blog here.

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