Some people are calling the efforts to revive repeal of the Affordable Care Act (ACA) the Trumpcare Zombie. After withdrawing the American Health Care Act (AHCA) on March 24, President Trump and Speaker of the House Paul Ryan stated that they were done with ACA repeal efforts for now.
Almost immediately, members of both the House and Senate said they wanted to revisit the bill, even though the administration said it was turning its focus to other agenda items (tax reform, budget, etc.) For example, Senator Rand Paul said he wanted to introduce the bill that was vetoed by President Obama last year.
Discussions on the details of a repeal and replace bill are continuing, but changes that appeal to ultraconservatives drive away moderate votes and vice versa.
For now it is business is as usual and the ACA is still the law of the land. Employers are still required to follow all ACA rules and, if an organization is not in compliance, it could be fined.
The Trump Administration can make changes to the ACA through regulation and we expect to see some changes, but it’s not known what those changes might be and when they might happen.
As for the impact on the insurance industry, we anticipate the next five years will be more of the same.
Major policy disputes in Washington and Sacramento and regulatory adjustments will force companies to stay up to date and remain diligent to stay in the good graces of the regulators.
The core plans and financial factors will most likely not change much. We expect average trend increases for large group plans to be in the 5-8 percent range, with increased focus on reducing costs through network alignment, large buying pools, and a renewed focus on consumer engagement and shopping for value in the healthcare industry.
Basic plan designs will be the same, with a continued shift to high deductible plans.
Emphasis will shift away from compliance, and move back to the basics of controlling costs.
California is in a different position than other states as things running relatively smoothly. This is different from many states that are struggling and affecting the overall functionality of health care reform. It will be these states that will continue to drive changes to health care.
In the short term, the Trump Administration needs to decide if it will work to improve the current system or undermine it. On the one hand, recent proposed regulations seek to make the Exchanges more attractive to insurers, which would indicate the Administration might work to improve the Exchanges. On the other hand, the Administration halted advertising toward the end of the open enrollment period, which held down the number of enrollees, making the Exchanges less attractive to insurers.
How the Administration chooses to deal with the case of House v. Price (formerly House v. Burwell) will give us a good clue as to which direction it will take. The House of Representatives sued the Obama Administration, claiming that funds for insurance companies that provide plans with low cost sharing to low income individuals were not properly appropriated. A district court ruled in favor of the House and the Obama Administration appealed. If the Trump Administration drops the appeal, it is quite likely that many insurers will drop out of the Exchanges.
When looking at a long term prognostication, we are approaching an inflection point and we are likely to go one of two ways:
- either the Democrats and Republicans will work together to solve the problems of cost and access by developing a bipartisan solution or
- the system could break down and there will be a movement for a single payer system. This would still be years from now.
Bolton is supporting our clients and advising all employers to remain in compliance with the ACA and notifying clients of any changes.