March 2, 2018 Kim Krisberg 1Comment

For now, it seems congressional leadership has given up on a full-throated repeal of the Affordable Care Act. Their new, less-visible repeal strategy is just ignoring the health reform law altogether.

This strategy is, perhaps, a much bigger threat than full repeal because it has a better chance of success. Congressional repeal has bad poll numbers and even worse optics. Scenes of politicians so actively and enthusiastically taking away people’s health coverage and images of security guards dragging constituents in wheelchairs out of Capitol Hill offices drums up way too much vocal opposition and media coverage. At this point, slowly destabilizing the foundations that make the ACA possible, popular and sustainable is a much more effective repeal strategy. The latest effort in that strategy is short-term health insurance plans.

Earlier this month, federal agencies released proposed regulation that would increase the maximum length of short-term insurance policies to one year; such plans are currently capped at three months. The new longer short-term plans wouldn’t be subject to ACA requirements and consumer protections, meaning they can include yearly and lifetime limits, forgo coverage of essential health benefits, and discriminate against people with pre-existing health conditions. If the proposal moves forward, these plans — which are so shoddy they don’t even meet the Congressional Budget Office’s basic definition of what health insurance is — coupled with the individual mandate repeal will destabilize the individual market for insurance that actually covers the medical care people need without pushing them into insurmountable debt. (Radical concept, I know.)

On Monday, the Urban Institute released a report on the impact of Trump’s short-term health plan proposal. Here’s what they found:

• The introduction of the kind of short-term, limited-duration health policies proposed by the Trump administration would increase the number of people without minimum essential coverage by 2.5 million in 2019. Of the 36.9 million people without that minimum essential coverage, more than 32 million would be completely uninsured and 4.2 million would purchase a new short-term plan.

• The financial impact of the new plans, combined with repeal of the individual mandate, would increase premiums on plans that do comply with ACA consumer protections by about 18 percent in the 43 states that allow short-term insurance. (Keep in mind, ACA-compliant plans are those that don’t discriminate against people with pre-existing health conditions and cover basic medical care, like childbirth, emergency services and prescription drugs. Also keep in mind that when Trump officials argue that this rule will increase the number of affordable health plans, they’re likely right — it is more affordable to buy a short-term plan as long as you only pay the low premium every month and never seek out actual medical care. In the event that you do need actual medical care — especially catastrophic care — out-of-pocket costs will likely be much, much higher than for an ACA-compliant plan.)

• Due to policy changes during Trump’s first year, like elimination of the individual mandate, ACA-compliant markets in Alaska, Arizona, Iowa, Louisiana, Mississippi, Oklahoma, West Virginia and Wyoming will lose more than 40 percent of their enrollment. States that remain committed to the ACA and have the resources to support aggressive enrollment outreach or extend open enrollment periods can sustain good participation and adequate risk pools in the ACA-compliant marketplace, which can help keep premium rates in check for high-quality coverage. However, states that experience large numbers of people exiting the individual insurance market — perhaps because there’s no longer a tax penalty for choosing to go uninsured — will likely face steeper premium hikes for ACA-compliant plans.

• The combined policy changes to the ACA in 2017 — the mandate, withdrawal of federal cost-sharing payments, less investment in enrollment assistance and outreach — will lead to an additional 6.4 million people going uninsured in 2019.

The big take-away: The introduction of Trump’s short-term health plan proposal, combined with repeal of the individual mandate, is bad news for the ACA marketplace. If these short-term plans pull enough healthy people out of the ACA-compliant risk pool — leaving behind the costliest patients — and enough people simply stop purchasing coverage altogether, it’s hard to see how insurers will stick around either. And if insurers won’t participate in the ACA marketplace, well then…is there still an ACA?

Fortunately, all hope isn’t lost. The states can step in — according to the Urban Institute report: “States can impose regulations that would limit the types of short-term plans that could be sold, and they can effectively prohibit them. While only a small number of states have done so thus far, more could make such legal and/or regulatory changes and thereby significantly reduce or even eliminate the effects estimated (in this report).” What’s seemingly more likely, however, is that disparities between states in health status and access to care will just get worse.

Trump’s newest health care plan won’t solve any of the real problems facing the nation’s health. It won’t bring down premiums for quality insurance that covers the medical care people actually need. It won’t bring down out-of-pocket health care spending. It won’t increase access to mental health and addiction services because the plans won’t be required to cover those services or any essential health benefits. It won’t protect families from medical bankruptcy. It won’t decrease uncompensated care costs. And it won’t bring down the number of people going without insurance and without access to timely medical and preventive care.

It will, however, destabilize the ACA’s many positive gains, its popularity, its consumer protections and its sustainability. Which seems to be the whole point.

To read more on the impact of Trump’s short-term plan proposal, visit the Urban Institute. To comment on the proposal, visit the Federal Register.

One thought on “Trump’s new short-term health plan could destabilize the ACA market (which is probably the point)

  1. It is torally incorrect to state that BCBS of NC. lost money on their ‘ACA business’ last year. That is what the insurer would like everyone to believe, yet on top of 290 million in profit last year, BCBS of NC made another 265 million in federal subsidies from the ACA policies it was forced to underwrite. What BCBS of NC has actuallu done is used its obligations under the ACA to cancel all existing grandfathered policies and raise most new premiums 300+% something the public was lead to believe insurers were forbidden to do under the ACA. BCBS of NC is perpetrating one of the biggest insurance scams ever under the ACA and nothing is being said about it, and disingenuous articles like this provides BCBS of NC cover gor their thievery.

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