President Trump, the ACA, and the health insurance of American expats

Contributed by Pacific Prime, 09 January, 2017

The elections in the US have come to an end, with the Electoral College voting to confirm President-Elect Donald Trump on December 19. The often-polarising Trump has had both America and the world on the edge of their seats, waiting to see what policies from his election campaign he'll enact first. With his first term coming in the new year, it's worth taking a look at what Trump's presidency means for healthcare.

Americans abroad that are thinking about healthcare will no doubt have the Affordable Care Act (ACA) come to mind. President Trump has made no secret of his discontent for the 2010 policy, commonly referred to as Obamacare, and his intentions to have it repealed once elected. The Republicans have vowed to repeal the legislation, however when and how it will affect US taxpayers at home and abroad remains in doubt.

This article will give a little context to those of you who are waiting to see how the new Commander-in-Chief will impact your ACA insurance requirements.

Affordable Care Act

The ACA was introduced in 2010 and made it mandatory for all US taxpayers to purchase a compliant stateside health insurance plan. Insurance plans had to meet the requirements outlined in the Minimum Essential Coverage (MEC) section of the law, regardless of whether you are actually resident in the US or not. This requirement was enforced by a penalty applied by the IRS at tax time.  

What this would mean for many American expats is that they would either have to purchase stateside ACA-compliant health insurance on top of the insurance they would purchase for their host country, or pay the MEC fine instead. Foreign expats required to file US taxes would also have this concern, regardless of whether they were resident in the US or not.

Is the ACA going to be changed?

No one knows exactly what's going to happen to the ACA, however there's a good chance that the Republicans and President-Elect Trump do intend to repeal Obamacare. There have been a fair few challenges and problems with the legislation; many have complained about rising premium costs, unaffordable out-of-pocket costs, and the narrow networks that ACA-compliant plans provided.

Yet with every bad there is some good, and a number of polls taken since the legislation's introduction shows that there are benefits of the ACA that people do support, including:

What happens to Obamacare in coming presidential term is still uncertain, but we can expect that the US healthcare system is not likely to return to its pre-ACA state. The Individual Mandate (the penalty applied for not having compliant healthcare) has been one of the biggest issues critics have had with the legislation - but it just might be the biggest factor in funding the benefits that people do support.

If not now, when?

Despite repeatedly stating that it would be a top priority to repeal the ACA if he won office, it's not likely that the ACA will be lost to history so soon after Trump takes up residence in the White House. While it is still too early to tell how long the ACA has left and what exactly might replace it, leading Republicans have been reported as indicating that they will begin to 'repeal then replace' the ACA once Trump is sworn in.

This means that repealing and replacing Obamacare is not going to happen on the first day. House Majority Leader Kevin McCarthy has indicated that it could take all of 2017 (and even some of 2018) to complete scrapping the ACA, as well as finding and implementing a new alternative in its place. So what does all this mean for those of you living abroad?

What will happen to my coverage until then?

Until the ACA is officially repealed, most people's current policy and requirement to hold an MEC-compliant plan will remain effective. It's important for you to note that insurers cannot cancel your plan, even if they're predicting the end of Obamacare. Any policies you have will remain valid from January 1 to December 31.

All benefits will also remain, including free birth control and coverage for adult children up to 26, for as long as the legislation remains intact. What you should be wary of is pre-empting the end of the ACA and the Individual Mandate penalty. No announcements have been made yet as to the fate of the penalty for the coming tax year so opting not to renew an MEC-compliant plan could make you liable to pay next tax season.

What you can do is start to prepare for what your insurance needs might be in a non-ACA governed future. To do that, look up the services of a leading insurance broker who knows the legislation and how it impacts expats.

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