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Re-elected Senator Rand Paul interviewed on Fox News Channel November 9, 2016 hints at what changes may be in store under a Trump administration regarding the Affordable Care Act

Rand Paul: Affordable Care Act Under Trump Administration “Legalize Low Cost Insurance”

Rand Paul
Senator Rand Paul speaks regarding low cost insurance, affordable care act

Senator Rand Paul (R) Kentucky was re-elected on November 8, 2016. In his interview on Fox News Channel Wednesday November 9, 2016 he re-iterated his statement that one of the first tasks for a Trump – led Republican Administration is to make it legal again to purchase low cost insurance.  

Legalized Low Cost Insurance

Low Cost Insurance refers to the ACA’s elimination of high deductible health plans (HDHP).  Under the Affordable Care Act, the maximum out of pocket for any health plan is was $13,700 in 2016 for a family.   Generally speaking, any HDHP that exceeded that amount is eliminated. However HDHPs are allowed under the ACA in effect by Health Savings Accounts (HSAs).  HSAs have limits on out-of-pocket costs, similar to the ACA.

The ACA eliminated plans with high deductibles and out-of-pocket exposure.  At the same time, the new guidelines are compatible with HSAs and HDHPs.  Specifically:

The Affordable Care Act changed two rules regarding HSAs, effective in 2011:

  • Prior to 2011, the penalty for HSA withdrawals for non-medical purposes was 10 percent. But it doubled to 20 percent on January 1, 2011. Account holders can avoid this fee as long as they either use their HSA funds for medical expenses, OR wait to withdraw funds until they’re at least 65. After that, withdrawals for non-medical purposes are simply taxed, but there’s no penalty.
  • Prior to 2011, HSA funds could be used for over-the-counter medicines. Since 2011, OTC medicines can only be purchased with HSA funds if a doctor prescribes them.

Under ACA regulations, HSA-qualified plans (like all plans) must cover preventive care with no cost-sharing and without requiring the insured to meet the deductible first. Under HSA regulations, no other claims can be covered before the deductible is met. These two regulations have co-existed well in 2014, 2015, and 2016, when all new HSA-qualified plans have also been ACA-compliant.

Stop loss insurance, providing catastrophic financial support only as a hedge against high medical bills has been essentially unavailable.  For some who wish to avoid high insurance premiums and pay cash for routine medical bills, the Trump Administration may propose a solution for those who only want to guard against major medical bills.

Michael F. Arrigo

Michael is Managing Partner & CEO of No World Borders, a leading healthcare management and IT consulting firm. He serves as an expert witness in Federal and State Court and was recently ruled as an expert by a 9th Circuit Federal Judge. He serves as a patent expert witness on intellectual property disputes, both as a Technical Expert and a Damages expert. His vision for the firm is to continue acquisition of skills and technology that support the intersection of clinical data and administrative health data where the eligibility for medically necessary care is determined. He leads a team that provides litigation consulting as well as advisory regarding medical coding, medical billing, medical bill review and HIPAA Privacy and Security best practices for healthcare clients, Meaningful Use of Electronic Health Records. He advises legal teams as an expert witness in HIPAA Privacy and Security, medical coding and billing and usual and customary cost of care, the Affordable Care Act and benefits enrollment, white collar crime, False Claims Act, Anti-Kickback, Stark Law, physician compensation, Insurance bad faith, payor-provider disputes, ERISA plan-third-party administrator disputes, third-party liability, and the Medicare Secondary Payer Act (MSPA) MMSEA Section 111 reporting. He uses these skills in disputes regarding the valuation of pharmaceuticals and drug costs and in the review and audit of pain management and opioid prescribers under state Standards and the Controlled Substances Act. He consults to venture capital and private equity firms on mHealth, Cloud Computing in Healthcare, and Software as a Service. He advises ERISA self-insured employers on cost of care and regulations. Arrigo was recently retained by the U.S. Department of Justice (DOJ) regarding a significant false claims act investigation. He has provided opinions on over $1 billion in health care claims and due diligence on over $8 billion in healthcare mergers and acquisitions. Education: UC Irvine - Economics and Computer Science, University of Southern California - Business, studies at Stanford Medical School - Biomedical Informatics, studies at Harvard Medical School - Bioethics. Trained in over 10 medical specialties in medical billing and coding. Trained by U.S. Patent and Trademark Office (USPTO) and PTAB Judges on patent statutes, rules and case law (as a non-attorney to better advise clients on Technical and Damages aspects of patent construction and claims). Mr. Arrigo has been interviewed quoted in the Wall Street Journal, New York Times, and National Public Radio, Fortune, KNX 1070 Radio, Kaiser Health News, NBC Television News, The Capitol Forum and other media outlets. See and for more about the company.

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