Because who actually reads this stuff? I do.
In case you’ve been living under a rock, or maybe only watching baseball games as your news (Go Dodgers!!!), President Trump signed another executive order yesterday to take yet another whack at the Affordable Care Act. This one is a doozy and I’ll tell you why:
- It immediately stops Federal payments of cost sharing reductions to healthcare insurers, which equates to roughly 7 BILLION a year covering 7 MILLION people. Does this mean I won’t get my subsidies this year from CoveredCA like I have in the past? It’s bigger than that. This does not address those dollars, so those are still on the table. The Cost Sharing Reduction (CSR) payments have been going to the Insurers who provide coverage through the Exchanges. Why? Because they have been LOSING THEIR SHIRTS on those plans.
Wait- what are you talking about? I’m saying that the plans sold through Exchanges like CoveredCa consistently lose money, because the majority of people who buy through them are sick. Aetna and United Healthcare stopped selling through exchanges in 2016. Anthem announced last month they would drop existing plans and stop selling plans through CoveredCA in 2018- I wonder what they knew already. The Federal Subsidies are necessary for the Insurers to SURVIVE those programs. So I have to say- I don’t believe they will. And if there are no insurers left to provide Exchange plans- there goes the CoveredCa and every other Exchange. Then what? This is the biggest move this executive order makes. Now circle back to my first words- this change is IMMEDIATE. The order also tells Insurers- this end of CSR payments also allows you to ‘back out’ of exchanges effective 1/1/2018. I am going to be sitting on pins and needles waiting to see if they decide to do just that.
- It encourages the expansion of Association Health Plans (AHP’s). What’s that? This is the idea that small businesses and possibly even Individuals could band together to purchase large group plans that don’t meet Obamacare’s ‘minimum essential requirements’. What are minimum essential requirements? Oh, silly things like pregnancy coverage and preventive care services. They would also be able to discriminate against pre-existing conditions so if you’re sick (does pregnant count as sick?)- that’s your problem. But don’t worry, people who AREN’T sick could at least buy cheaper stuff. We’ll let sick and older people pay more. They like that sort of thing.
- It requests an expansion of Short Term Medical policies- Obamacare said short term policies could not be longer than 3 months, Trump wants them to be available for a year. Again- these policies are often cheaper and not providing the same coverage required by regular policies. They would be popular among the young and healthy.
- It seeks to expand Health Reimbursement Arrangements to allow Employers to give Employees cash to buy Individual plans. The last thing Obama did in office was deliberately rule this out. Currently this is not legal- Trump wants to change that.
The last 3 items are not immediate- and will definitely not be effective January 1, 2018. In fact, there is a lot of fine print that needs to be written in order for those 3 things to even happen. The executive order included timelines for ‘updates’ on progress to be provided to the President on those to-do items. He gives 60 days for Association Health Plans and Short Term Medical Plans and 120 days for the expansion of Health Reimbursement Arrangements. As far as I’m concerned- that makes all of those things TBD. It’s #1 that has the potential to kick a lot of people in the butt real quick, and force the Exchanges to fall apart immediately.
Now we play the waiting game.
Let me know if you have questions. We’re all in this together.