How Will My Individual Health Insurance Change Under President-Elect Trump?
In one of the most embattled elections in recent history, Donald Trump beat out Hillary Clinton for the White House to become the future 45th president of the United States. Determined to stay committed to his campaign promises, president-elect Trump released a list of what he will attempt to accomplish during his first 100 days in office, and it includes, repealing and replacing the Affordable Care Act.
Will health insurance rules as we know them today change dramatically under Trump? Not entirely. While Republicans have been eager to eliminate many of the provisions, including the tax penalty for not having health insurance, Trump has signaled that he wants to keep a few of the most popular elements of the law in place.
With guidance from Pivot Health CEO Jeff Smedsrud, here is an outline of how the rules surrounding health insurance plans might shape up under a Trump presidency.
Federal Regulations on Short Term Health Insurance Will Most Likely Go Away
As of January 1, 2017, short term health insurance plans purchased before April 1, 2017 will terminate on December 31, 2017, shortening eligibility periods for individuals who purchase after April 1. This mandate could go away based on Trump’s recent cabinet pick for head of the Department of Health and Human Services, Tom Price. Price will oversee decisions and changes pertaining to the Affordable Care Act (ACA). If this change occurs, consumers will be able to purchase short term health insurance plans for up to 364 days a year, providing a low-cost alternative for those who cannot afford individual health insurance. (Basically, reverse the new 2017 regulations back to 2016 rules.)
Update: Effective October 2, 2018, the Centers for Medicare and Medicaid Services made it possible for individuals to purchase a short term medical plan for up to 364-days of coverage. However, states can determine if they wish to restrict coverage durations to more limited periods of time.
The Election Results Won’t Change Your Health Insurance Plan in 2017
Rules for buying health insurance plans for individuals will likely change under Trump’s new administration, and restrictions surrounding short term health insurance plans will most likely go away. However, there are no anticipated changes that will be made to 2017 plans since many will go into effect on January 1, 19 days before Trump’s inauguration. Health insurance companies will also need time to implement any changes when the Affordable Care Act is dismantled.
“It is important for consumers to understand that they should buy coverage during this open enrollment period, and should consider all options. The penalty for not having coverage will not go away once Trump becomes president,” said CEO Jeff Smedsrud.
Donald Trump Will Change The Rules Surrounding Health Insurance Plans for 2018
The existing health care law will likely change, but how much is still unknown. Many believe that instead of a complete repeal, the most popular aspects of the law will remain or elements of the law will be phased out slowly. Erin Trish, an assistant research professor in public policy at the University of Southern California has said that a complete repeal is practically impossible. “What’s expected is a different approach with a less regulated health insurance market,” Trish remarked. Congress’ efforts to repeal the ACA in the past included a
Congress’ efforts to repeal the ACA in the past included a two-year transition period, so there is an understanding in Washington of how cumbersome undoing the law will prove.
Last year House Republicans drafted a measure that would eliminate the law’s requirement for individuals to buy health insurance or face a penalty but left tax credits for people buying coverage and Medicaid expansion alone. This moderate approach could resurface now that the Republicans hold both the White House and the majority of Congress.
Smedsrud added, “It is expected by the end of 2017 there will be an Obamacare replacement that will create new incentives to maintain coverage, and may include rewards for improving one’s health. It is likely that the subsidies for buying coverage will be reduced, as will the penalties for not having coverage – but only beginning in 2018, at the earliest.”
Should I buy short term health insurance instead of individual health insurance?
Perhaps. While waiting to see how the health care law will change, many are choosing to hold off for a year, buy an affordable short term health plan, and see what happens. On average, short term health insurance is approximately 50% less expensive than an individual health insurance plan with many of the same benefits. It’s worth noting that short term medical is not considered a qualified health plan under the Affordable Care Act, and you are subject to a tax penalty if buying a temporary health plan for more than three months. However, it’s still important to do the math. Many times a short term insurance plan coupled with a penalty is still less expensive than a major medical health plan.
Sick People With Pre-Existing Conditions Won’t be Denied Coverage
Two elements of Obamacare that president-elect Trump says he wants to keep are:
Allowing anyone with a pre-existing condition the ability to sign up for individual health insurance, and
Allowing adults under the age of 26 access to their parent’s health insurance plan.
Trump has stated that his administration would work with states to re-establish high-risk pools.
“We have long been advocates of risk pools for the medically uninsurable, and I was the founder of the National Association of State Comprehensive Health Insurance Plans (NASCHIP). Risk pools worked reasonably well in the years before Obamacare, and given the advent of Big Data, they can be improved and streamlined and will likely work better than the risk-adjustments methods under Obamacare,” said Smedsrud
If You Don’t Buy Health Insurance in 2017 You Will Have to Pay a Penalty
Major components of the law will most likely be revised for eligibility dates starting in 2018 but the existing law should continue to stand in 2017, including paying a tax penalty if you do not have health insurance coverage. According to Kaiser Health News, some Americans might take on a “why bother?” approach to signing up for health insurance in 2017, knowing the law will change. They wouldn’t be alone. Data shows that 5.6 million tax returns included some level of tax penalty for not having health insurance coverage in 2015.
Update: As of January 1, 2019, the federal tax penalty for not carrying an Obamacare exchange plan is no longer in effect. Americans can purchase any type of insurance they would like, and even remain uninsured without penalty if they so choose.
Insurance Won’t Become Less Expensive When Trump Becomes President
Experts argue whether the Affordable Care Act slowed the increase of health insurance premiums or not, citing studies that can prove both notions. Loren Adler and Paul Ginsburg of the Brookings Institute concluded that monthly insurance premiums went up 30%-40% a year before the ACA. Even with marketplace plan premiums increasing 22% for 2017, they contend insurance rate increases are still lower than they were prior to the launch of the ACA. Others disagree, citing different analysis that insurance rates were only increasing 10% each year because sick people with pre-existing conditions could be denied coverage before the ACA. Either way, one factor is certain – health care costs are soaring higher than annual income increases, and individuals are spending far more out-of-pocket on health insurance deductibles and medical bills. There are no signs that eliminating Obamacare will curb health care costs.
HealthCare.gov and State Exchanges Could be Phased Out
After Obamacare is repealed there will be no need for a marketplace to cover those who purchase health insurance on their own. Health insurance companies will service individuals directly or through online web entities like HealthCare.com.
The Rules for Subsidies and Tax Penalties Will Change in 2018 or 2019
Cost assistance in the form of a tax subsidy has helped approximately 85% of Americans who purchase their own insurance. Enrollment for 2017 is on pace to match last year’s numbers, although enrollments soared after the election, with 1 million people signing up on on the marketplace, according to the Department of Health and Human Services. That is up 50,000 enrollments from the same time last year. Whether people signed up in record numbers because they are afraid their health insurance subsidy will be taken away or just support the ACA remains unclear. Trump has not outlined whether he will keep a subsidy system or strictly issue financial rewards at tax time.
“The most important thing to remember is that every person has unique health insurance needs. You will be given the opportunity for more choices, based on tools available from private companies. Do the shopping. Make your choice,” advised Smedsrud.
Should I Comparison Shop to Find the Best Prices for 2017?
Absolutely, especially if you purchase your own health insurance. Every year health insurance plans for individuals are updated – monthly premiums and deductibles increase and provider networks change. It’s important to shop for a health insurance plan that fits your budget and medical needs, not just renew your same coverage from the prior year.
Highlights from 4sighthealth: Overturning Obamacare
David Johnson of 4sighthealth points to Trump’s own words that he wants to be a president for all Americans. But Johnson states those words come with great responsibility and to achieve his vision and plans, Trump will need to find common ground with both Democrats and Republicans. “Reforming U.S. healthcare is a great place to start,” says Johnson.
Johnson’s five-point program to advance the vision of health care and health insurance in America includes:
- Repeal and Repair Obamacare: Trump has said he will repeal Obamacare, and that would affect 20 million individuals with marketplace health insurance plans. A move that like carries political risk right out of the gate. Johnson suggests re-engineering the concept of Obamacare, renaming it, monitoring the progress and adjusting the program over time as needed.
- Draft a Bi-Partisan Expert to Lead The Coalition: When rebuilding the health insurance market, Johnson suggests bringing in the master of bi-partisan change – Tom Daschle. Daschle co-founded the Bi-Partisan Policy Center and has been a champion of health care for decades.
- Modernize Medicare and Medicaid: Exploitation, manipulation and fraud are at the heart of the Medicare and Medicaid systems with no justification for medical treatments. Payment reforms are the only way to begin to “reduce counter-productive participant behavior,” says Johnson.
- Modernize Regulations: Well-administered programs have clear goals, measure performance and reward outcomes. The first step to achieve balanced programs is to eliminate fee-for-service payments and avoid regulatory requirements that don’t include fairness and transparency.
- Go Retail on Wellness: Chronic disease is overwhelming this country and America under delivers preventive care, health promotion and disease management. Johnson advocates for a grassroots movement to employer coaches, teachers, employers and others to become our wellness champions.
The Affordable Care Act will be on the chopping block come 2017. How much will be trimmed away remains the biggest question.
Interested in waiting out the politics and signing up for a short term health insurance plan instead? Visit Pivot Health.