If the theme for 2017 health insurance markets was uncertainty, the theme for 2018 appears to be…more uncertainty. Health insurance experts at CHIR will be monitoring policy developments and market trends closely. Below they share the top issues and trends they’ll have an eye on in the weeks and months to come:
Individual market challenges: I’ll be watching how repeal of the individual mandate and the increased availability of alternative insurance products, such as short-term plans, affect individual market enrollment, particularly among healthy individuals. I’ll also be closely watching the 2019 plan and rate filing season, which starts in most states in June. Will we see more retrenchment in plan participation? How high will premiums climb?
Group market challenges: We’ll continue to track trends in the employer-group market, particularly the impact of association health plans (AHPs) on coverage for small businesses. Many small businesses with healthy risk profiles remain on transitional (grandmothered) plans or have turned to self-funding. Will that trend continue, or will AHPs make significant inroads?
State-federal challenges: In 2017 we saw a number of states step up to protect their markets and consumers’ access to coverage in the face of policy uncertainty at the federal level. To the extent the individual market deteriorates, will we see more states act to keep insurers participating and stabilize premiums? To what extent could those efforts be undermined – or even preempted – by action at the federal level?
I’m mostly concerned about the legislative and regulatory action that the Trump Administration and Congress have taken to undermine the individual market and what that means for consumers who need access to affordable coverage that works when they are sick. Before the Affordable Care Act (ACA), discriminatory insurance practices were rampant and the law allowed insurers to deny, charge more and limit necessary medical services because of someone’s medical history, gender, age, or basically any other factor. The ACA changed all that and people, regardless of their health status, can buy coverage, often with financial help, on a guaranteed issue basis that covers a comprehensive set of benefits. However, in order for this to be financially sustainable in the long term, you need an individual market that works, including plans to participate and a stable and balanced risk pool.
So far, what we’ve seen from the Trump Administration and Congress are policies that work against the stability of the individual market. Recent action on the individual mandate as well as CSRs, short-term plans and AHPs immediately come to mind. Over the next year, it is going to be critical to understand how these different policies affect the individual market in general and ultimately consumers. Will the individual market be less competitive? Will consumers face fewer plan options? Higher premiums? Less comprehensive benefits? Right now, I’m thinking yes on all fronts.
Then, at the same time states continue to be the primary regulators of health insurance and it will be critical to see how they respond to federal action that undermines the stability of the individual market. For example, consider Alaska. Faced with a struggling individual market, the state introduced a reinsurance program, including a significant injection of state funding, to stabilize the individual market. They successfully brought down premiums. But now federal policies could make it easier for healthy people to buy products outside the very risk pool the state has spent so much time and money trying to stabilize. What actions will Alaska take, along with other states that are serious about having stable individual markets, to limit the sale of short-term policies and AHPs? Also, how will states deal with the increased sale of other alternative coverage options, like health care sharing ministries, that siphon healthy lives out of the individual market pool?
I want to see whether a big shift occurs away from ACA coverage and protections. Under the Trump administration, we’ve started down this path where there are a lot more coverage alternatives that people can enroll in and more pathways for them to access that coverage. How do consumers sort themselves? What kind of coverage do they choose, how do they come to the decision, and what does it mean for their access to care and financial security?
I’ll also be watching the individual market – it could end up super small and super sick. What’s going to happen to those people who don’t qualify for [ACA] subsidies – they may not be able to afford the good plans.
I’ll also be watching for what these market changes mean for political support for the framework envisioned under ACA – the grand political bargain of 2010 between the government, insurers, and consumers. We saw an uptick in public support for that bargain – and particularly the protection of people with pre-existing conditions – in the face of ACA repeal threats in 2017. Will that public support be sustainable? Is there a durable political coalition for the ACA’s fundamental structure?
Last but not least, I’ll be watching the data – will the administration and states release the data we need to understand how the market is changing? Will we know who’s enrolling in what plans on-marketplace and off-marketplace? You can’t know where the seepage is if you’re not tracking this data.
Issues for insurance companies: I’ll be watching how insurers respond to the repeal of the individual mandate, as well as to the proposed rules on AHPs and short-term plans. If the individual market risk pool deteriorates, will we see a decline in insurer participation in 2019? What will be the premium effects of these changes?
Federal action: Will Congress engage in additional efforts to repeal part or all of the Affordable Care Act (ACA)? Or will there be bipartisan efforts to tweak the law or to try to offset damage caused by repeal of mandate? Will we see action on reinsurance or other actions to shore up the individual mandate, i.e. via the Collins-Nelson or Alexander-Murray bills?
State action: I’ll be interested in how states respond to these policy developments and market trends. Will states enact their own mandates or other incentives for consumers to maintain adequate coverage? Will states be able to regulate AHPs? Will states regulate short-term plans? Will they enact reinsurance programs and pursue 1332 waivers? Will any go for broader based reforms, such as what was proposed last year by Idaho and Iowa?
Consumer reactions: Will consumers drop their coverage in 2018, in response to the individual mandate repeal? Will there be confusion about when the repeal goes into effect (the mandate penalty isn’t repealed until 2019, but many consumers may not be aware of that).
The first thing I’ll be watching is how insurers respond to regulations stemming from President Trump’s October executive order, specifically the rules on AHPs and short-term plans. Second, how will insurers respond to the loss of the individual mandate penalty – will we see insurers dropping out when it comes time to decide whether to participate in the individual market in 2019?
Third, I’m keeping an eye on what happens with birth control coverage. Do employers and schools decide to drop coverage under the Trump administration’s religious or moral exemption policy? What will happen with the legal challenges to that policy?
Last but not least, I’m following the debate over rules published by the Equal Employment Opportunity Commission (EEOC) relating to employee wellness programs. Consumer advocacy groups successfully challenged those rules. Will the EEOC appeal the court’s decision that it was arbitrary and capricious in its rulemaking? Or will it go back to the drawing board and develop new rules?
Faculty at CHIR will be writing about all the issues discussed here in the weeks and months to come, so stay tuned!