Federal policy shifts that eroded the market for Obamacare are likely to drive up premiums for remaining policyholders next year, particularly those who are older and in poorer health, a new report shows.
The most significant changes include the elimination of a penalty for individuals without insurance in last year’s GOP-led tax overhaul and President Trump’s executive order expanding access to association health plans, such as those obtained by trade groups. He also stretched the maximum length of short-term limited duration plans from three to 12 months
That many of the policies the report references have yet to be finalized is further clouding the market outlook for insurers trying to price plans under the Affordable Care Act, the formal name for Obamacare, according to the report published by the American Academy of Actuaries, a Washington, D.C.-based professional association.
The law’s introduction of federal regulation into an industry traditionally overseen by state governments had already increased complexity significantly, said Gerald Kominski, the director of the University of California Los Angeles’s Center for Health Policy Research.
It was further heightened when Republicans in the Senate and House spent months trying to repeal Obamacare, which President Trump had promised on the campaign trail to replace with something better and cheaper, but ultimately failed.
Now “the Trump administration is attempting to destabilize ACA markets,” said Kominski. “The uncertainty that’s being introduced this year is intentional.”
The individual mandate penalty imposed on people without healthcare coverage had been one of the most unpopular parts of Obamacare, but eliminating it means healthier people are less likely to obtain insurance, increasing the amount of higher-risk policyholders in the coverage pool and pushing up costs.
“Eliminating the penalty is expected to increase premiums as unsubsidized lower-cost healthy individuals will be more likely to forgo coverage,” the report said.
Short-term plans are normally used by people transitioning between jobs who need health insurance coverage for a short time. Heading into 2019, it’s unclear whether or not Trump’s executive order will be enforced by regulators — leaving insurers dubious about whether the alternative forms of coverage will be available, the report said.
