Basic question - can insurance providers pull out of ACA plans mid year? Or once they put out an ACA plan for 2017 and enroll individuals, must they offer the plan for the whole of 2017?
And tangentially to the above, can ACA providers opt out of an insurance plan mid-year or do they sign a contract for the whole of 2017?
^not sure if they can pull out, but our company went bankrupt and our plan was canceled in October. We had to choose a different plan at that time and also prove that we were eligible to make a change. (on the marketplace in IL)
Those of us who buy insurance from insurance companies have a year-long contract. If we keep paying our bills, they have to keep supplying us with insurance. If the ACA were repealed in January with no delay, insurance subsidies would be gone, and that would mean some people couldn’t afford their insurance. Insurers are not required to provide insurance for people who don’t pay for it. There may be a grace period of one or two months, but an insurer is not required to give insurance all year to people who don’t pay for it.
As a related matter, insurers must decide in early 2017 whether they will offer plans in 2018.
Good article here: https://www.healthinsurance.org/repeal-and-replace/the-trump-effect-on-your-obamacare-coverage/
Kind of long, worth reading the whole thing (lots of details & nuance, the sort of thing that’s hard to come by these days).
But the TL;DR on it, in reference to the subsidy question, is that as a practical matter it’s unlikely that subsidies disappear until 2019. It’s unlikely for a bill to be enacted and signed into law until mid-year, and it takes IRS 18 months to redraft complex regulations. So unless the Republicans in Congress want to wreak total havoc on everything (and pretty much guarantee that they will all be voted out of office in 2018) – it’s likely that changes will be pushed out a few years.
The new administration and Congress are probably about to learn the lesson that Hillary Clinton learned back in 1993 – the insurance & pharmaceutical companies have very powerful lobbies. ACA is the plan that the insurance companies wanted – they aren’t going let those subsidies and the customer base that comes with it go away lightly. (Not $1 of subsidy money ends up in the pocket of the patient-- at least not unless the patient opts to pay out of pocket and take a tax credit later on. The whole purpose of the exchanges were to operate as a vehicle to enable the transfer of government money directly to the insurers.)
Under the current law, you sign up for the entire year, and they may not make any changes including pulling out. If ACA is repealed on Jan 20, all of ACA’s protections would go away. However, there’s been a lot of talk about immediate repeal but delayed implementation, so who knows. We should expect turmoil and uncertainty for some time to come, unfortunately.
(sorry; too late to edit)
The turmoil won’t be delayed even if implementation is. It will begin in earnest the moment repeal-and-delay becomes law. Business abhors uncertainty, and we can expect a mass exodus by insurers at the earliest possible opportunity. Then TPTB may have to decide what happens to people in places where there is literally no insurance to buy. It would be ironic if the 20 million beneficiaries of Obamacare ended up on Medicare for the duration.
In states with strong support for ACA, “mass exodus” doesn’t make a lot of sense. For example, Blue Shield of California only has one business, that of offering health insurance in California (hence the name) - and more than 10% of their subscribers come from the exchange. Kaiser is another provider that’s not going anywhere, and actually stands to gain somewhat if people lose subsidies because their premiums are lower. (Those who can’t afford premiums at any price would be forced out, but for those who are faced with loss of subsidies, the lowest cost bronze plan would suddenly become very attractive-- so a net benefit to whichever insurer is in that spot. ) In this state, I’d think a ballot initiative to fill in subsidy gap could do well, so it might be beneficial for the established insurers to hang in there. After all, they can cancel any policy holder who falls behind in premiums.
But I certainly see your point as to what is going to happen in other states where ACA is already struggling.
I do that like the continuous coverage part as it will punish the people who now would rather pay the penalty and wait until they are sick to get coverage (at the next opportunity.) It’s a mandatory mandate without using the word “mandate” that sent most opposers into full blown tantrums.
I’m sure there would still be some who wouldn’t get coverage but the “subject to underwriting” part means the insurance companies could deny coverage for the condition that they want the coverage for and/or be outrageously expensive. Much more risk for not being insured then under the present system.
Costs will go up the older you are and IMO that serves the people right who have complained that their premiums are too high under ACA. It also doesn’t mean the cost to younger people will go down at all, so that would likely stay the same with only cost for age changing (unless you live in NY or Vermont where that is illegal.)
Also, I have no idea, and the repealers probably don’t either, about how to expand provider networks. I don’t see the insurers voluntarily doing that because they won’t have to get subscribers.
Giving block grants to states for Medicaid means most states will cut the Medicaid program and those who have it now due to the expansion will lose coverage.
The bottom line, IMO, is that the insurance companies will be the biggest gainers in any replacement plan.
^^ Just like they were before ACA.
Calmom, right, states that have embraced ACA will try to keep it, like CA. As eb says it’ll be harder even for us to keep the Medicaid piece, but we’ll try. Low income people in ACA-resistant states are going to be SOL.
Congress already has a bill that repeals most of Obamacare, including all of the parts that have to do with revenue, including subsidies and the individual mandate, but not the pre-existing conditions ban. They passed it before, but it was vetoed. They could pass it again and have it signed into law in January of 2017.
If they passed this bill to take effect right away, then ACA subsidies would disappear instantly, in 2017. Insurers would hate this. They’d lose many of their healthy subsidized customers, but keep their sick full-pay subscribers, an actuary’s nightmare.
There is also talk about passing the repeal, but having it take effect in January of 2019, after the mid-term elections in 2018. In the meantime, supposedly, a replacement plan will be developed and signed into law. “Repeal and delay,” this is called, but “Repeal and chaos” is the nickname, and for good reason. Insurers hate this plan too.
Insurers can’t plan without understanding the regulatory framework they’ll be working under. The individual market is not that big. The amount of money an insurer can make is limited, but the amount they can lose is almost unlimited. Many insurers will think it’s too risky to stay in the market.
There is a really good op-ed in the NYT today about how this may affect mental health services. I’m not sure if I can link to it but it’s: The Mental Health Crisis in Drumpf’s America by Richard A. Friedman.
This isn’t even an aspect of ACA repeal that I had considered. I am lucky in that my depression and anxiety meds are handled by my PCP but I don’t know how common that is. Definitely more severe mental illnesses are handled by psychiatrists and it’s definitely something that people may need to think about and bring up to their psychiatrists (in order to make a plan B in case anything happens to their coverage.)
One thing that hasn’t been discussed here yet is the impact of repealing ACA on company paid health insurance plans. Many of those plans changed to reflect coverage requirements of the ACA. Once those requirements are presumably gone via repeal, is it likely that companies will dial back the plans they provide their employees?
I’m already paying out of pocket for my daughter’s psychiatrist because he doesn’t accept our crappy, expensive insurance.
An insurance company on the exchange in Illinois this year went out of business in October. All policy holders had to scramble to find new insurance for the last few months of the year. People had all their deductibles and out-of-pockets all start at $0 again. Really bad for those who had already reached their out of pocket limit.
Just want to chime in with another data point to counter those where folks live in states limited to 1 plan.
Number of providers in my ACA network: 4
Number of plan options available for my family: 32 (bronze 12, silver 12, gold 6, platinum 2 - although the differences between some of them are hard to parse)
Number of plan options available with our current PCPs: 27
All plans are restrictive as they are HMO and limit coverage to my geographic area.
Costs range for family of 3 (2 adults in 50s and one college aged child) from $860 (bronze) to $1690 (gold not platinum actually) per month, without subsidies.
They are all quite a bit cheaper than COBRA costs for a much more generous 80/20 PPO type plan with very few restrictions from a previous employer but that is comparing apples to oranges given the broad differences between the plans.
It’s hard for me to compare costs for 2017 vs. this year as one child is now covered by an employer provided plan so we are dropping to 3 covered instead of 4. I know they are going up but not by how much. I could switch to another provider to keep my costs at or slightly lower than what I’ve been spending per month but probably won’t. If I just need the coverage my family used this year (very routine, basic stuff), I probably should switch and save $$, but if something happened where one of us needed to see more specialists, my current provider (who will be more expensive for next year) has a much wider option of specialists than the cheaper option and given the OOP max (which really isn’t that hard to reach these days given medical costs!) it wouldn’t cost us more should we have that need. So, the decision becomes whether or not to save a couple hundred a month now vs. having better care and coverage and options if needed. Still trying to decide on this…
@JustGraduate Like everything else, it’s shrouded in uncertainty. As Fang said, the incoming powers that be have the votes to de-fund ACA on the first day, but for now, not the votes to overturn the law. That would destroy the individual market, but – in theory – wouldn’t effect the group market. So the protections ACA also gave to the group market – no caps, adult kids on parents’ policies, essential benefits, etc – would remain in place. It’s probable that the Chamber of Commerce and other business groups would quietly get rid of those over time.
Even if they do repeal-and-delay without touching the funding mechanisms, I still expect that the individual market will be destroyed. Insurers thought that the marketplace was a long-term proposition which is why some of them were willing to stay in, believing that it would become profitable eventually. Now that all of our new leaders have promised it will go away, I don’t see any reasons insurers would want to stay, once their legal obligations to current subscribers are fulfilled. But again, that shouldn’t directly affect the group market.
As I said quite a few pages ago, once the dust settles in a few years, I’d guess the picture will be very much what it was before ACA. If you had good employer insurance, you’ll probably still have good employer insurance. If you had crummy employer insurance, your employer will probably go back to crummy insurance the minute they’re not required to have good insurance. If you had no employer insurance and you’re young and healthy, you’ll probably be able get OK insurance for a semi-reasonable cost. If you’re sicker, older or poorer, you’re in trouble. Same winners as before, same losers.
One of the funding mechanisms is the Net Investment Income Tax that presumably is the main target for repeal by the Wall Street class. Most ordinary people do not encounter it.
“Even if they do repeal-and-delay without touching the funding mechanisms, I still expect that the individual market will be destroyed. Insurers thought that the marketplace was a long-term proposition which is why some of them were willing to stay in, believing that it would become profitable eventually. Now that all of our new leaders have promised it will go away, I don’t see any reasons insurers would want to stay, once their legal obligations to current subscribers are fulfilled. But again, that shouldn’t directly affect the group market.”
That’s were the billions of $ the federal govt is going to pay to the insurance companies comes in - so they’ll stay in the individual marketplace until ACA is replaced. If they don’t pony up no insurer will stay in the indy market.
Agree, eb. So if the marketplace is gone once Repeal is in place, where are people going to buy insurance, especially people who need subsidies? What’s that going to look like?