The nine million Americans covered by the federal healthcare exchanges must be feeling a lot like a ping pong ball… It’s a good thing the ball is moving so fast they can’t see it. President Trump has reversed himself again and indicated that he would not support a bipartisan effort to plug some of the holes in the Affordable Care Act. Most notably, this bill would extend federal funding of health plan cost-sharing subsidies for 24 months while Congress debates a more permanent solution. Trump, distorting reality, has dubbed the cost-sharing subsidies “health insurance company bailouts.” This is far from the truth. The subsidies are very much factored into premium development and as it is, health insurance companies are leaving the exchanges because they can’t earn a profit on exchange business.
The bill would also expand availability of catastrophic plans, which are now only open to under-30-year-olds. Insurance is about spreading risk and the higher users of care need to subsidize the lesser users. If this part of the bill passes here is what will happen; anyone with a subsidy will purchase a silver plan (because the premium is inexpensive and there is limited cost-sharing) and anyone without a subsidy will purchase a catastrophic plan. And those catastrophic plans will feel like they have no coverage at all. My sense is that the bipartisan effort will ultimately get passed, possibly as a throw-in to keep the federal debt train rolling. But there are going to be vocal opponents once they figure out the impact.
But remember, this is just the individual marketplace and only a small percentage of Americans are impacted. Senators Alexander and Murray are also looking to possibly repeal the Cadillac tax, which is still lingering with a delayed 2020 implementation. Both sides of the aisle and employers hate this tax – even if it doesn’t get thrown out now I think it’s safe to say that it’s very unlikely ever to happen. There are also some very positive bipartisan moves on simplified reporting and redefining the definition of full-time workers.
Healthcare reform discussions are no doubt going to continue for many years. Following the day-to-day machinations is exhausting. But as I have been saying from the very beginning – we need bipartisan solutions and at least the debate is moving in that direction.