Setbacks for the ACA (Affordable Care Act)

While changes will undoubtedly be made to our current healthcare system, the effort to repeal and replace Obamacare has undeniably faced significant setbacks. To be certain, healthcare is not a minor issue to address, and took the Obama administration nearly a year and a half to pass a final version of the Affordable Care Act.

In late June, the Republican bill was pulled from deliberation by Senate Majority Leader Mitch McConnell due to the lack of votes needed for passage. Now, the GOP is claiming a revised version will be revealed this week, with a vote ideally before the close of July. Previous versions of the bill had discussed cuts to Medicare, a reduction in revenue, and tax and subsidy reductions for low-income individuals who use private insurance.

Healthcare Hurdles within the GOP

However, the GOP has proven to be extremely divided when it comes to healthcare, as they have been unable to to pass any version of the bill through the current budget-reconciliation process, which only requires a simple majority (i.e. 50 Republican votes) to pass. The coming weeks will be telling in regards to healthcare, but one thing is certain: the speed of healthcare reform is significantly slower than Republicans initially expected.

But, if the GOP does manage to pass a healthcare bill in the near future, what’s next? More than likely, tax reform is high on their agenda, although investors and taxpayers alike should be aware that the pace for this reform will not move quickly either. The last time comprehensive tax reform was passed over 30 years ago and took a meager three years to fully enact.

Similar to healthcare, the GOP is using the simple majority reconciliation process, allowing them to pass legislation with just 50 votes, but as we’ve seen, this may not move the passage along as quickly as Republicans anticipate if they cannot come to an agreement within their own party.

Reform Takes Time – 2018 and Beyond

More than likely, we will not see major tax reform until 2018, if we see significant action at all. And even then, the reform would predictably be a much lighter version than touted by President Trump throughout his campaign.

All in all, while both healthcare and tax reform could be in the American people’s future, the final product will look notably different, and take considerably longer to pass, than predicted by Republicans, so taxpayers should not hold their breath or expect immediate growth and developments. Like most government processes, true reorganization takes time, and major issues like healthcare and taxes are not devoid of such timelines.

If you have any questions or would like to discuss the personal or financial impact of the potential tax reform, please email me with questions at [email protected].