FORCE advocates for families facing hereditary breast and ovarian cancer in areas such as access to care, research funding, insurance, and privacy.
Frustrated by the lack of progress on health care reform, on October 12, President Trump issued an executive order which could ultimately undermine the individual and small group health insurance markets. The order would allow “junk” association and short-term health plans. The same day, the White House announced that it is planning to halt cost-sharing reduction payments (CSRs) which help health insurance companies offset out-of-pocket medical costs for low-income enrollees, keeping coverage affordable. In essence, without changing or repealing the Affordable Care Act (ACA), these actions give federal agencies the authority to modify regulations so that more health plans will be exempt from some of its core requirements.
Insurers say they will need to raise premiums significantly and may pull out of some state insurance exchanges if subsidies are eliminated. If this happens, insurance markets already on shaky ground could unravel. Trump’s order comes even as bipartisan Senate discussions continue over ways to sustain the ACA marketplaces. Senators Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) have said that CSR payments should not end immediately, though they have different opinions on how long the subsidies should continue.
Short-Term Health Plans
These alternative health plans can bypass basic ACA requirements for coverage terms and essential services such as mental health, maternity care, and prescription drug coverage. The Obama administration prohibited consumers from short-term plan enrollment exceeding three months because these plans are viewed as interim, barebones options to fill temporary gaps in coverage. The current administration is proposing that people be allowed to remain on these plans longer—and to renew them.
Association Health Plans
Trump’s order instructs federal agencies to make it easier for individual consumers or small businesses to join together to get health insurance through so-called association health plans. Like their short-term counterparts, these plans can sidestep mandates to cover basic benefits. Opponents claim that the plans allow evasion of important state insurance regulations. Historically, association plans were not subject to regulations that required insurers to maintain sufficient financial resources. As a result, some became insolvent, leaving members with unpaid medical bills; others were accused of fraud for claiming that plans were more comprehensive than they were, leaving consumers footing the bill if they became seriously ill.
Critics, including patient groups, medical societies, hospital associations, and others predict that allowing these other kinds of coverage will have damaging effects on the insurance market, driving up costs for those with chronic or serious medical conditions and prompting more insurers to exit the ACA marketplaces.
The executive order proposals must go through the federal rule-making process, which involves public notice and a comment period. If approved, most of the changes would not be finalized for months. As such, the order will have little or no impact on 2018 premiums, which are expected to be significantly higher in a number of states—purportedly due to the uncertainty surrounding CSRs.
While FORCE agrees that some changes to the ACA are needed to ensure its sustainability, we believe that the October 12th proposals will do more harm than good. Experts believe that a few relatively minor policy fixes could shore up the marketplaces, enabling them to provide consumers of all ages and health circumstances with quality, comprehensive, affordable health plan options. We will continue encouraging Congress to find a bipartisan approach that achieves these important goals.