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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 Arrigo brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health IT, and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations who provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and medical billing, fraud damages, as well as electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, medical malpractice, insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software SA (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls IT audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and is published in Healthcare IT News.

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