ACA: What Could Change And How Soon?

By Susan Rupe

The Affordable Care Act's ban on refusing coverage for pre-existing conditions appears to be one of President-Elect Donald Trump's favorite Obamacare features, but the health insurance market would have difficulty sustaining that if the individual mandate is eliminated, said industry insiders.

Losing the requirement that individuals buy health insurance and a potential loss of subsidies could throw the market into turmoil, according to Marcy Buckner, National Association of Health Underwriters vice president of government affairs.

NAHU is working with Trump's transition team and favors an approach that would keep consumer costs down while ensuring the marketplace is stable.

“The worst outcome in this would be that subsidies would be repealed,” Buckner said. “This would lead to everybody but the sickest Americans leaving the marketplace and put the marketplace into a death spiral.”

Doing away with mandated individual coverage also would harm the marketplace, she said, leading to premiums spiking and having an adverse effect on the risk pool.

Because a full replacement plan has not been devised, Buckner believes any changes to the ACA will be phased in.

“As we take something away from the current law, we need to offer something to replace it,” she said. “I don’t know what piece of this Trump will tackle first but whatever it is, no one wants the health insurance market to collapse.”

A number of ACA watchers said this week that they predict it’s more likely the bill will be modified instead of repealed, with some changes taking effect in time for the 2018 open enrollment season.

“Repeal would damage the market,” said Paul Ginsburg of The Brookings Institution. Ginsburg was one of the presenters during a conference call on the future of the ACA sponsored by the Society of American Business Editors and Writers.

Ginsburg said he believed ACA repeal is unlikely because the Senate does not have enough votes to carry a repeal. In addition, he said, complete repeal would take away health care for 20 million Americans “and very few see the viability of taking those people and ending their coverage.”

The repeal or replacement of the ACA “is kind of like a game of chicken,” Ginsburg said. “What about the transition from what we have today to what we might have in the future? Would it lead to fewer people enrolling or lead more insurers to exit the market?”

The ACA’s individual mandate and subsidies have been a point of contention among its foes from the very beginning. But Ginsburg said he believes some form of mandate and subsidies must be kept in a new health care bill in order to maintain a guaranteed community rate and keep people from buying insurance only when they are sick.

He predicted a future individual health care market maybe would not include the exchanges, but would include subsidies of some sort as a mechanism to get people to buy coverage.

Focus on the consumer

Any change made to the ACA should focus on the millions of who have obtained coverage through the law, said Kevin Lucia, Senior Research Fellow and Project Director at the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute. Lucia also spoke during the SABEW conference call.

“A lot of options will be floating around but we need to look at how they work for consumers – looking at cost and standards of coverage,” he said.

Lucia envisioned a possible ACA repeal as going back to the way the individual health insurance marketplace was before the law took effect. “Before the ACA, there was no guaranteed issue. If you were unhealthy, you would be charged much more for insurance. There were no standards on what health insurance covered and what it didn’t. The ACA changed all that. In a straight-up repeal, these changes all go away.”

Lucia believed that the current pieces of the ACA that would be kept as part of a health care reform bill would be continuing the requirement for guaranteed issue and retaining tax credits to help consumers purchase insurance. He also envisioned establishing high-risk pools.

Among the “wild cards” in ACA reform are whether the states could abandon the health care exchanges and whether subsidies would dry up, according to Kevin Dahill, Executive Vice President of the Healthcare Association of New York State.

“The Trump administration and the Republican leadership are committed to massive tax cuts, so where will the offsets come from? Would that mean subsidies would dry up?” he asked.

Untangling the tentacles

The different provisions of the ACA have many tentacles, which make repealing or changing them a challenge. That was the observation of Ronnell Nolan, president and CEO of Health Agents for America.

However, she did predict that a repeal of the employer mandate might happen fairly soon.

“But we need to look at what does that entail – what about all the reporting requirements?” she said. ”Where do the employees go for insurance? Will they be able to afford it?”

Any changes made to the ACA need to address consumer affordability, Nolan said.

“Until affordability is addressed, consumers can’t afford the coverage and we have nothing to sell them,” she said.

Agent commissions also must be addressed as part of health care reform, Nolan said.

“Commissions could be mandated as they are with Medicare Advantage. Or we could have some kind a fair compensation act. Biggest issue is going back to affordability - insurance companies saying if they’re not making a profit, they aren’t paying a commission.”

Health care reform needs to start with bringing the right people to the table, Nolan said.

“In passing the original ACA, they didn’t bring the doctors or the insurance companies or the agents to the table,” she said. “I think they will do that differently this time.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].