President Elect Donald Trump has back-pedaled a bit on his campaign promise to repeal Obamacare (what the Affordable Care Act is widely-known as), but Republicans are already making plans to change how the individual health insurance market works. Many players must come together to affect meaningful change, including the insurance industry, the federal government, and the insurance regulators in all 50 states. It’s looking like a monumental task, and while I’m not certain that every proposal is a good one, I’m confident that something has to be done to improve the current situation.
Insurance industry trade groups are weighing in with their list of demands, and as many insurers pulled out of the state insurance exchanges because of the high costs associated with Obamacare policies, it’s likely that if they get their way, many of them will re-enter the marketplace. I think this is overall a positive change, because during this Open Enrollment Period (OEP) some of our clients only had one choice for on-exchange (government-subsidized) plans.
Most insurance companies agree that the government must continue to subsidize premiums for low-earners. However Obamacare has created a situation where many people who don’t qualify for a government subsidy can no longer afford their monthly premiums, so they instead pay the penalty for not carrying health insurance coverage. While Obamacare has allowed many people to get coverage who previously couldn’t, either due to pre-existing conditions or because they couldn’t afford the premiums, it’s created large pools of relatively sicker people, increasing premiums for all.
Many Republican lawmakers have proposed eliminating the so-called “individual mandate,” which has no doubt been the driving force that has motivated many young, healthy people to continue to keep their coverage despite rising costs. The insurance industry seems to be in disagreement about just how to keep these desirable insureds in the marketplace, but without them it’s unlikely that insurance companies can continue to support policies that are mostly held by relatively sicker and older individuals.
I think any workable solution has to increase competition amongst insurers as well as providers of care. Increasing price transparency so that people can make informed buying decisions when choosing medical care providers is key to driving down the cost of care.
We also have to give those who want out of the traditional insurance marketplace a way to get out. Healthshare plans are a start, but hopefully any reboot of the insurance market will include creative redesign to any offerings from traditional insurers as well, to increase choice amongst consumers of individual health insurance plans.
You can read the article from the New York Times for more. Got any great ideas for how to fix the individual health insurance market? Share them here!
Wiley Long is President of HSA for America, and a passionate advocate for consumer-based solutions that will improve price transparency and lower health insurance and medical costs for people purchasing individual and family health insurance plans.