Advisers and clients worry about Obamacare changes under Trump

It's hard to know what healthcare may cost or look like in 2018 without specifics from the President-elect

Nov 17, 2016 @ 12:47 pm

By Liz Skinner

Financial advisers who have Obamacare policies for their families and staff, or have clients with the plans, are nervous about the specifics of President-elect Donald Trump's intention to repeal and replace the Affordable Care Act.

About 20 million people have health-care insurance through the Obamacare law passed in 2010 that mandated individuals to have at least minimal health plans. It also set a tax on investment income and other levies for the wealthy to help subsidize those who could not afford coverage. It's credited with reducing the number of uninsured and criticized for increasing the cost of health-care policies.

But the benefits outweigh the costs for some advisers.

“My oldest daughter was billed more than $1.1 million for care during the two years she was treated for leukemia, and she would be an uninsurable risk if certain provisions of Obamacare were ever repealed,” said Jude Boudreaux, founder of Upperline Financial Planning.

(More: My client's Medicare coverage has been canceled, now what?)

He covers his own family and one full-time employee through Obamacare, which Americans have until Dec. 15 to sign up for if they want 2017 coverage. What will happen for health care in 2018 is an unknown, as the next president hasn't announced details of his plans.

“Changes are a threat to our family and our business,” Mr. Boudreaux said.

Mr. Trump has said he likes aspects of the ACA that require coverage for pre-existing conditions and allow parents to cover their children until age 26. But it's unclear how these things could be part of a health-care plan that would revoke the mechanisms that fund the program. A complete repeal will require congressional support.

“What happens in 2018 is anyone's guess,” said Joe Taylor, a financial adviser with Oak Street Advisors, who also has coverage under the ACA.

Jason Lina, a lead adviser with Resource Planning Group who has an Obamacare plan for his family of five, is telling worried clients that the coverage likely will change in 2018.

“It would be hard for the Republicans not to change it at this point,” Mr. Lina said.

Republicans in Congress have repeatedly tried to repeal or gut the ACA and they may feel emboldened by Mr. Trump's election

But leaving 20 million people without health insurance isn't really politically acceptable. So financial advisers are left to try to figure out what changes are most likely.

Mr. Lina has helped clients qualify for thousands of dollars in Obamacare subsidies through smart income planning strategies, and he believes financial assistance will probably go away.

The cost of coverage also would likely change. His own family's health-care costs have risen from about $200 a month in 2013 to what will be $1,150 a month next year.

“I think costs will go down for people who are healthy,” he said. “Of course, for those who had chemotherapy last year, their costs will probably go up.”

The biggest concerns Mr. Lina has heard from clients are from those who retired in the last few years before turning 65 and qualifying for Medicare. A big part of that decision was knowing they could buy affordable health care, even if they had pre-existing conditions.

(More: Advisers face big challenges in helping clients prepare for health-care costs in retirement)

“If they are told they can't buy insurance anymore, they'll either have to go without insurance or go back to work,” he said.

Financial adviser Shiela Padden already has talked with about half a dozen clients with coverage through Obamacare who are wondering what it will mean if the ACA is scrapped.

She's advising them to sign up for the 2017 plans — even though premiums for some clients have increased 50% to 100% — and not to think about whether they would be better off paying a tax penalty for not having insurance. Then she's telling them to make sure they take advantage of their medical benefits by getting all their preventive care done and addressing any nagging health issues.

Ms. Padden also is optimistic about reforms Mr. Trump's presidency could secure that could lower premium costs that she believes are becoming unaffordable.

“I do think Trump is good at listening to what the people say they want, and I think people are tired of being told what to do,” she said.

(More: Self-funding employee health care pays off for some small businesses)

Other advisers are recommending clients budget additional cash this year if they suspect they might have to pay more next year.

“Clients should not overreact, but they should look at risk, cashflow and try to get an idea of costs outside of the marketplace,” said Mark Struthers, a financial adviser with Sona Financial.

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