The rollercoaster health care debate in Congress is having an unsettling effect on consumers who count on individual marketplace health insurance for themselves and their loved ones. Many others simply don’t understand what’s at stake. Here’s a quick explainer on what it all means for consumers.
QUESTION: I keep hearing that the Affordable Care Act, or Obamacare, mainly affects “individual” coverage. What exactly is individual coverage?
ANSWER: Most Americans have either employer-based coverage provided through their jobs or government coverage, like Medicaid or Medicare. But 7 percent of Americans purchase their health coverage individually, or outside the workplace on the individual market. Many with individual coverage are self-employed or don’t work in jobs that offer employer-sponsored coverage.
Q: Will the health care debate cause me to lose my individual coverage?
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A: Consumers with individual marketplace coverage worried by the roller-coaster health care debate should relax. As long as you continue to pay your premiums, you can count on your 2017 coverage to deliver all the benefits and all the protections guaranteed by the Affordable Care Act.
Q: What if my insurer decides to exit the marketplace in my state?
A: They must still honor all policies they signed until those policies expire or are terminated for non-payment.
Q: Do I still have to abide by the individual mandate that compels me to have health insurance or pay a fine?
A: The Affordable Care Act’s individual mandate is still the law of the land. But the Trump administration is not enforcing the provision, so the Internal Revenue Service is accepting tax filings in which people leave blank a question about their coverage status. The IRS policy coincides with an executive order issued by President Donald Trump that directs federal agencies to reduce potential burdens of the health law.
Q: What’s all this talk about “death spirals?”
A: An insurance industry “death spiral” is when people begin to drop their coverage because they can’t afford it, leaving behind mostly sicker plan members whose higher medical costs then drive up premiums even more. Insurers, left with fewer and more costly enrollees, then stop offering coverage – which then increases the numbers of uninsured. That market unraveling is considered a death spiral.
Q: Is the Affordable Care Act in a death spiral? Insurers are already exiting many counties and premiums are increasing, aren’t they?
A: No. Obamacare is not in a death spiral, say health experts. Recent research from the Kaiser Family Foundation shows individual insurer profits are growing this year. The steep price hikes that marketplace consumers incurred in 2017 were mainly due to underpricing in 2015 and 2016. And new research from the Robert Wood Johnson Foundation shows that large national carriers – Humana, Aetna, United and Cigna –accounted for more than 65 percent of the 700-plus county-level insurer departures this year. However, smaller regional plans, provider-sponsored plans, Medicaid managed care organizations and Blue Cross Blue Shield plans have grown their individual market imprints, “and they are the dominant issuers in the market right now,” the Robert Wood Johnson Foundation found.
Q: So will I have more plans to choose from next year?
A: Probably not, but it depends on where you live. Rural counties with few doctors will struggle to attract insurers. According to the Robert Wood Johnson Foundation, the share of U.S. counties with one marketplace insurer will likely jump from about 33 percent to 45 percent. Counties with three or more insurers are expected to decline from 31 percent to about 25 percent next year.
Q: I’m confused. That sounds like the market is dying?
A: “Both friends and foes of the ACA will continue to monitor insurer participation in the months ahead, and the future is far from certain. Yet the charge that the market is ‘dead’ does not stick,” the Robert Wood Johnson Foundation found. “The data thus far suggest that most counties will have at least two insurers offering plans on the exchange, and most people will be able to choose from at least three.”
Q: So what would happen to my coverage if Congress partially repeals the Affordable Care Act under the budget reconciliation process that Senate Majority Leader Mitch McConnell is now pushing?
A: McConnell said he’s considering the same legislation that passed the Senate in 2015. That proposal would have, in two years, repealed the ACA’s Medicaid expansion and eliminated the tax credits that help people purchase individual marketplace coverage. That would mean people would lose their marketplace subsidies in coverage year 2020, if the legislation became law this year. The legislation would, however, immediately repeal the individual mandate while continuing the Obamacare requirement that individual insurers offer coverage to everyone, including those with pre-existing conditions. Experts say that without a requirement that people purchase coverage, more insurers would exit the marketplace, fearing people would simply wait until they get sick to purchase coverage.
Q: Wouldn’t insurers stop offering coverage in 2018 if the repeal legislation is passed?
A: That’s what experts think. The uncertainty surrounding what Congress could do is already causing individual insurers to seek higher rates in 2018. Insurers are unsure whether the Trump administration will continue to reimburse them for financial assistance they provide to low-income plan members as required under the Affordable Care Act.