Trump’s ACA Executive Order Heightens Insurance Market Jitters

Sarah McIlvaine
Author | Shield HealthCare
01/25/17  8:44 AM PST
Trump's ACA executive order

By Harris Meyer for Modern Healthcare

EXECUTIVE SUMMARY President Donald Trump’s first move toward a repeal of the Affordable Care Act (ACA) on Friday afternoon has health insurers and healthcare policy experts concerned about potential fallouts that could be caused in the individual insurance market. Trump’s executive order, which advises federal agencies to do everything in their power to dismantle the ACA, and suggests the possibility of eliminating the tax penalty for those who are uninsured, could cause a massive market shift and lead insurers to opt out of the ACA for 2018. This could lead to a large drop in the number of insured Americans and many fear the potential outcome of interrupting the current system before finding a feasible replacement.

Some speculate that President Trump intends to create an environment where it will appear to the public that the ACA has in a sense self-destructed. Others believe the executive order was issued to demonstrate Trump’s commitment to his campaign promise of repeal of the ACA, while providing Congress some time to decide on an alternative plan.

The language in the executive order suggests several possible impending changes under the administration. The executive order could make it easier for states to design their own alternative coverage models, and could settle some current lawsuits – including one currently underway regarding employer coverage of contraceptives. It is also expected that the Trump administration will make it easier for conservative states to impose more rules and requirements on their Medicaid expansion programs for low-income adults – though the revisions must still be submitted through the lengthy procedure required by the Administrative Procedure Act.

The Trump administration is expected to attempt to put an end to the ACA penalty for lack of coverage, or to extend hardship exemptions which would allow individuals to avoid the penalty. However, these actions would be more difficult to enact as a result of legal challenges. Also expected to be removed is the requirement that employers with more than 50 full-time workers offer coverage to employees.

While ACA opponents coordinated legal battles to slow the development of the law, now it appears ACA supporters may end up challenging the new administration to keep parts of it in place.

The key issues that will determine whether insurers remain in the individual market in 2018 have not been addressed at this time with the executive order, as it remains to be seen whether the Trump administration will continue certain ACA protections for insurers – namely: subsidizing insurance premiums at current levels, supporting payments for low-income enrollees, and protecting insurers that cover patients who are at higher risk of health issues.

Read the full article at Modern Healthcare.

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