After GOP health plan collapse, what can health insurers expect?
Senate Majority Leader Mitch McConnell’s new proposal to simply repeal the Affordable Care Act appears to already be dead, less than 24 hours after he dropped his replacement plan for lack of support among fellow Republicans.
A handful of lawmakers, including Sens. Susan Collins, R-Maine, Shelley Moore Capito, R-W.V., and Lisa Murkowski, R-Alaska, said Tuesday that they would oppose the repeal-first strategy. The dissent eliminates hope that the approach will gain traction in the near term, despite calls for action on Monday night from President Trump and Majority Leader Mitch McConnell.
So what’s next? Few health insurers, hospitals or doctors seem to know how to approach the next chapter in American health care now that Republican efforts have all but collapsed.
The health care industry is facing an accumulation of “ifs.” The ACA’s insurance markets still have problems, with insurers pulling out of some areas and raising premiums in others. President Donald Trump has many powers at his command to undermine them further -- and has threatened to do so. And there’s no map and no timeline by which lawmakers might find a resolution.
“There is no clear path out of this,” said Robert Laszewski, an insurance industry consultant who’s critical of the Affordable Care Act. “Individual markets continue to spiral downward partly because of the inherent issues in Obamacare’s market architecture and partly because of Republican efforts to make things even worse.”
The consequences of that uncertainty are already showing in the ACA’s individual markets. Insurers have pulled out of some areas and are boosting premiums in others, meaning consumers in some regions will face fewer options and higher prices next year. In a few parts of the country, there are no Affordable Care Act insurers at all.
On Tuesday, UnitedHealth showed the benefits of avoiding the political minefield the law has become. It reported second-quarter profit that beat estimates and raised its 2017 forecast after turning its business away from the ACA’s individual markets and more toward Medicare, Medicaid and coverage sold to employers.
Humana Inc. and Aetna Inc. have also retreated, and Anthem Inc., a key Affordable Care Act player, has announced plans to quit or limit its presence in at least four states. The industry has cited the volatile politics around Affordable Care Act, through which the government provides subsidies to help people buy coverage, as a reason for their pullback.
Insurers’ skittishness likely won’t be calmed by the current administration. Trump’s government has raised doubts about how it will enforce a tax penalty under the ACA meant to make people buy insurance. It’s threatened to withhold payments that help poorer people use the plans they buy. And it’s an open question how Trump’s health department will promote Affordable Care Act when 2018 sign-ups start in November.
What employers need to know
Lawmakers are expected to turn next to tax reform, where issues including the repeal of the Cadillac tax – a hotly debated excise tax on high-cost health plans – could again come up for consideration.
Congress could also potentially address changes laid out in the Better Care Reconciliation Act, the Senate’s failed replacement plan, related to health savings accounts – tax-advantaged accounts used with high-deductible plans. The BCRA made several proposed changes to the accounts, including raising contribution limits and permitting the use of funds on over-the-counter medications, which supporters say could benefit workers.
“To me, big picture, watch tax reform and some of these issues will be back in play,” says Christopher Beinecke, counsel in the employee benefits and executive compensation practice group at Haynes and Boone in Dallas.
Employers will also have to keep an eye on the health of the individual markets under Trump. A significant increase in the number of uninsured could have an indirect impact on employer-sponsored plans, pushing up system-wide costs and making employer-sponsored healthcare more expensive down the line.