Within a 12-hour span on this past week, the Trump administration made two seemingly contradictory moves that could have a huge impact on the health insurance marketplace, according to NPR.
The first move was for Trump administration health officials to issue guidance that would undermine the health exchanges for people who buy their own health insurance, as reported by The Center For Medicare and Medicaid Services. This maneuver makes it easier for states to dodge some Affordable Care Act requirements, including allowing the use of federal subsidies for plans with less coverage that can reject customers who have pre-existing conditions.
The contradictory move came later the same evening, when the administration proposed a rule that would allow consumers to acquire tax-free money from their employer in lieu of an employer group plan that could then be used to acquire a privately-purchased individual plan on the exchange, according to the Department of Labor.
Health analysts suggest that the first proposal, in conjunction with previous changes initiated by the administration, would nearly revert the health insurance market to conditions before the ACA took effect in 2010. Critics and analysts also suggest that the Trump administration has continued to undermine the ACA by weakening the marketplaces and its consumer protections amid frustration that the Republican-controlled Congress has expressed reluctance to repeal the ACA outright. Those actions by the administration have made it easier for insurers to offer weaker policies that have annual and lifetime limits on what the insurer might pay nor offer protections for consumers with pre-existing conditions, which were provided for by the ACA. Finally, Congress also eliminated the tax penalty for those who do not enroll in a health insurance policy. The combined effect of these policies could reduce enrollment in ACA health plans, which would drive up the premiums for those who remain in them.
Analysts suggest that there have been three immediate results from the changes.
One is that protections for consumers with pre-existing conditions have become uncertain. This has been a key concern for voters in the upcoming election, and both parties have at least paid lip service to the concept of providing health care for those with pre-existing conditions. Last summer, the Trump administration passed a rule to expand the use of short-term health plans, which are less expensive and provide less coverage. This will likely further deteriorate the ACA exchange, which will suffer from rising premiums as people leave the market and less competition between insurers as many may choose to leave the exchange altogether.
Now, once again the state in which one lives will have a dramatic influence on the type of coverage available. ACA protections standardized coverage across all states, but the new guidance by the Trump administration will allow for extreme variations in premiums, coverages, and protections across state lines. “Some states will do everything they can to keep individual markets strong and stable. Others won’t,” said Sabrina Corlette, a research professor at The Center on Health Insurance Reforms at Georgetown University.
With the proposed rule to allow employers to fund tax-free accounts called health reimbursement rearrangements (HRAs) that workers can then use to purchase their own policies on the health care exchange, millions more are likely to purchase individual health insurance plans. The ACA has suffered from never attracting the enrollment or the number of insurers needed to keep premiums as low as possible, and the HRA plan is likely to incorporate a needed infusion of consumers in the marketplace. However, employers in a competitive labor market may also be hesitant to remove health care benefits from their incentive packages, which would mitigate such an infusion.