2017 was a chaotic year for the Affordable Care Act.
- Health Care
2017 was a chaotic year for the Affordable Care Act. Legislative contests in Congress, shifting support from healthcare stakeholders, and warnings of repeal have left many payers facing an unpredictable future.
Even though Congress has not yet completed the process of scrapping the law, the ACA’s opponents will likely proceed to use all of their available powers to minimize the bill throughout 2018.
Lawmakers have already eliminated several essential pillars of the legislation, including the individual mandate and the cost-sharing reductions while placing uncertainty through alternative coverage pathways.
The 2017-2018 open enrollment period viewed 8.82 million plan selections, showing keen interest from consumers in obtaining or continuing coverage in the new year. But in the coming year, payers should anticipate the developments in the ACA to affect premium rates, add difficulties to the individual health plan market, and change how states leverage customized solutions for their Medicaid programs.
Here are some of the most notable revisions to the health insurance market from 2017 and how they are expected to impact payers in the year ahead.
In late December, the House voted 227-203, and a Senate voted 51-48 to pass a national tax bill that revoked the ACA’s individual mandate. Starting in 2019, people will no longer face a tax fine if they don’t enroll in an ACA-compliant health plan for 12 months.
The American Academy of Actuaries predicted that payers engaging in individual health plan markets will endure losses so significant that federal subsidies (if they were still in effect of course)wouldn’t be fit to cover the payments of premium increases due to unstable risk pools.
The Academy believes that healthy individuals will be less expected to obtain a health plan because they will not be penalized for not pursuing coverage. Without a higher number of healthy members to support risk pools, premiums will INCREASE as the balance shifts towards non-healthy, higher-cost beneficiaries.
Payers are suspected to lose millions of possible beneficiaries in the individual market over a 10 year period due to the elimination of the mandate.
The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) predicted that revoking the mandate would disincentivize 13 million beneficiaries from engaging in the individual health plan market by 2027 in trade for a $328 billion decrease in the federal budget from 2018 to 2028.
Both CBO and JCT agreed with the Academy of Actuaries that millions of healthier individual market consumers would not purchase insurance because the mandate financial penalty would not help motivate individual enrollment.
Payers that work in individual health plan markets may meet immediate and long-term trials in 2018 and beyond because of last year’s ACA moves. The individual health plan market could still offer an excellent chance for payers but may demand a new set of solutions that limit profitability anxieties as well as premium increases.