In the span of less than 12 hours, the Trump administration took two seemingly contradictory actions that could have profound effects on the insurance marketplaces set up by the Affordable Care Act.
First, officials issued guidance on the morning of Oct. 22 that could weaken the exchanges set up for people who buy their own insurance. The new approach makes it easier for states to get around some ACA requirements, including allowing the use of federal subsidies for skimpier plans that can reject people with preexisting conditions.
Yet, the other move – a proposed rule unveiled that evening – could bolster ACA marketplaces by sending millions of people with job-based coverage there, armed with tax-free money from their employers to buy individual plans.
Both efforts play into the parallel narratives dominating the bitter political debate over the ACA.
The administration, frustrated that Congress did not repeal the law, say some critics and policy experts, is working to undermine it by weakening the marketplaces and the law’s consumer protections. Those efforts make it easier for insurers to offer skimpier policies that bypass the law’s rules, such as its ban on annual or lifetime limits or its protections for people with preexisting conditions. Congress also zeroed out the tax penalty for not having coverage, effective next year. Combined, the moves could reduce enrollment in ACA plans, potentially driving up premiums for those who remain.
The administration and Republicans in Congress say they are looking to assist those left behind by the ACA – people who don’t get subsidies to help them buy coverage and are desperate for less expensive options – even if that means purchasing less robust coverage.
“These are people who were buying insurance before [the law] and then the rules changed and they could not buy it because they could not afford it,” said Joe Antos, a resident scholar at the conservative American Enterprise Institute. “They have been slowly dropping out of insurance coverage altogether.”
The efforts are dramatically reshaping the ACA and the individual insurance market to one that looks more as it did before the 2010 law, when regulation, coverage, and consumer protections varied widely across the country.
“Some states will do everything they can to keep individual markets strong and stable. Others won’t,” said Sabrina Corlette, research professor at the Center on Health Insurance Reforms at Georgetown University.
So what expectations should consumers have? Here are three key takeaways:
Protections for preexisting health problems are uncertain
Polls show that keeping the ACA’s guarantees on coverage for people with medical problems is a top concern for Americans, and Democrats have made their defense of the health law a key part of their midterm election campaigns.
Republicans have gotten that message and even those who voted to repeal the ACA or joined a lawsuit by 20 red states to overturn it now say they want to protect people with preexisting conditions. Still, GOP lawmakers have not introduced any plan that would be as protective as the current law.
In August, the administration released a rule allowing expanded use of short-term plans, which are less expensive than ACA policies. To get those lower prices, most of these plans do not cover prescription drugs, maternity care, mental health, or substance abuse treatments.
The move is unlikely to benefit people with health problems, as short-term plans can reject people with preexisting conditions or decline to cover care for those medical problems.
Under the rule, insurers can sell them starting in 2019 for up to a year’s duration, with an option to renew for up to 3 years, reversing an Obama-era directive that limited them to 90 days.
Administration officials estimate such plans could draw 600,000 new enrollees next year, and others have estimated the numbers could be far higher. The concern is if many healthy people in 2019 switch out of the ACA market and choose short-term plans, premiums will rise for those who remain, including those with preexisting conditions, or make the ACA market less attractive for insurers.