President Trump campaigned on the idea that he would repeal the Affordable Care Act, otherwise known as Obamacare. That hasn’t happened yet, but he did recently sign an executive order that will make some major changes to Obamacare. Though these changes won’t take place until at least 2018, they will affect not just individuals and businesses, but also the insurance industry as a whole. Here’s a look at the changes and what they might mean for the health insurance field.
One of the main changes that President Trump’s executive order will bring is the ability for more groups of people to get together and buy insurance as one group. The point of this is to share the costs of health insurance through association health plans, which is something that small businesses, trade groups, and churches have done. In general, if all the members of the group are pretty healthy, their costs will go down, offering more affordable healthcare to people who haven’t been able to afford it under Obamacare.
However, if even one person gets seriously injured or ill, those costs could skyrocket for everyone in the group. In addition, members of these groups can buy policies in other states, which means they get more options to choose from. But the problem is that it is costlier for national insurance providers to offer insurance in multiple states, which is why only a handful of companies do it. This means only a few companies serve the people who buy insurance out of state, and if they all chose to raise their prices, the groups on association health plans would suddenly have to pay a lot.
Additionally, these insurance policies will not be subject to the regulations that we’re used to by now, which means companies can charge more for pre-existing conditions. So for the insurance companies that want to play by their own rules rather than sticking to recent regulations, President Trump’s executive order could be a good thing. But that doesn’t apply to most companies.
In fact, many insurers are feeling rather uncertain right now. Most have already committed to participating in Obamacare in 2018, which means they’ve set their rates, too. So they have to offer the lower copays and deductibles they’ve already promised, all while knowing they won’t be reimbursed. For this reason, many have requested big rate hikes to help make up for it.
The end result will likely be that those higher costs will be passed on to people who are insured. At that point, insurers will end up taking the blame of the higher insurance costs, eventually putting the industry in a bad light. President Trump’s intentions may be to improve the public’s access to insurance by increasing competition in the hopes that this will drive costs down. But experts have said it’s unlikely to work out that way, so hopefully the administration can come up with a better plan for healthcare in the near future.