"What about ICHRA?"

I doubt there are many ICHRA single issue voters out there, but in case there are, this blog is for you! Last night, we saw presidential candidates Kamala Harris and Donald Trump debate the issues, talk about dogs, and whose rallies are bigger, but there was one big question the moderators missed...

"What would your administration do to make ICHRA more successful?"

I don't blame the ABC moderators for not getting to it, but I know it left all of you in suspense, so I thought we would gather up what little information we have about each of the candidates to answer this burning question for you.

But first, Congress and Tax Credits...

Before diving into the candidates and each platform, there is an imminent issue where Congress could impact the market no matter who is in the White House: the expiration of enhanced tax credits in 2025. Under the Inflation Reduction Act enacted in 2022, tax credits in the ACA market were increased significantly. This was a key component of what has driven the individual market from a paltry 14M in 2020 to over 21M in 2024.

In general, Democrats have favored continuing the increased tax credits while Republicans are likely to allow to sunset. On one hand, if the tax credits go away, it’s likely many people (particularly healthy ones) will drop their ACA plans because they will get too expensive and seek out alternatives. The individual market shrinking reduces competition between carriers and ultimately the quality of individual plans available, which can detract from the value of ICHRA. On the other hand, the tax credits sunsetting means more employees (particularly blue collar and hourly employees) would benefit from receiving tax-free dollars from their employer since they would not be available from the government. We may see more employers that are currently hesitant to implement an ICHRA or QSEHRA because their employees could get generous tax credits now come back to the ICHRA or QSEHRA to be able to support their employees.

When the enhanced tax credits went into affect in 2020, we were worried at Take Command that the addressable market of small employers would shrink as employees could get a better deal with tax credits (and the employer doing nothing) versus the employer setting up an ICHRA. However, this didn’t really happen.

Our tax credit prognosis: As long as the ACA market remains competitive enough, the reverse of what we saw in 2020 will have the same (ie, “neutral”) impact as before.

Ok, onto the candidates and parties! Let’s start with the Democrats…

"Vice President Harris, how would your administration impact the growth of ICHRA?"

During the debate, VP Harris came out with supporting statements about maintaining private insurance while working to expand coverage. She didn't provide many more details last night.

Democrats generally support ICHRA because it is adding lives to the ACA. While Kamala Harris was a proponent of universal healthcare the first time she ran for President, now she and the Democrat Party platform are aiming to achieve “universal” healthcare by backing a Public Option in the ACA market. A public option could shape up many ways, but in general would be a government run plan that competes alongside private insurers in the public marketplaces.

As long as the ACA markets remain competitive, introducing a public option plan could be beneficial for ICHRA as it would give employees more choice. In some parts of the country where there’s not much private competition, a public option could help make ICHRA more attractive in those areas.

As long as policies don’t move too far away from marketplace ideas, a Kamala Harris administration should be good for ICHRA. The reason I caveat with should is there are risks from special interest groups on the Democratic side that see ICHRA as a Trump policy that needs to be challenged and thrown out because it was from Trump. What these groups fail to see is that ICHRA was actually an extension of President Obama’s lesser known QSEHRA policies. Other interest groups on the Democrat side include major labor and hospital firms which have been skeptical of ICHRA or are worried about a shift in their revenue mix to more ACA plans which typically have lower reimbursement rates. There are also risks if the public option ends up damaging competition from private insurers, that the market weakens and ICHRA loses some appeal.

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"President Trump, what would you do to enhance the ICHRA market?"

When asked about healthcare during the debate, President Trump said he did his best to maintain the ACA while trying to overcome its problems. He said he did not have an exact plan at this point but had several frameworks to try to improve it. Again, the details were light.

Republicans support ICHRA because it is market-based and gives employees more choice. While the Republican platform is fairly high-level, they commit to “promoting choice and competition” which sounds like a positive for how ICHRA operates versus a traditional group plan. In fact, Republicans sponsored House Bill 3799 to write the ICHRA regulations into law, a strong signal about their position around it.

However, if you were a single issue ICHRA voter, it may be tempting to think the above actions should earn Republicans your vote. But not so fast my friends. A risk to another Trump administration are efforts to continue undermining the ACA marketplace (on which ICHRA relies but has remained a Republican political punching bag) and expanding ICHRA’s rules in ways that go beyond what could be supported in bipartisan discussions. Allowing ICHRA to work with non-ACA plans, while great for promoting choice, could damage the markets many on an ICHRA rely on and draw increased scrutiny from Democrats who may then seek to undo ICHRA as a whole.

Similar to Democrats, as long as policies don’t move too far right under a 2nd Trump Administration, ICHRA should continue to thrive.

What do we think at Take Command?

I know the moderators didn't ask me last night, but what do we think?

We think the most important thing is to keep ICHRA on its current bipartisan trajectory. While one party picking it up could be a big help to codify ICHRA into legislation or to adjust some regulations to make it operate better, there’s risk that if one side likes it, the other side will immediately hate it because #politics.

We are working closely with the HRA Council and other ICHRA administrators and insurance carriers to make sure ICHRA thrives under either administration. It’s important that bipartisan conversations continue to happen and that any changes to ICHRA rules only be supported on a bipartisan basis.

#healthpolicy #presidentialdebate2024 #ichra #election2024

About the Author: Jack Hooper

Jack is the CEO and founder of Take Command, the leading ICHRA Administration Platform, and a founder and board member of the HRA Council. Jack is passionate about reimagining health care and in particular health insurance to help empower individuals to expand and improve care.