One of the most noticeable results of the Affordable Care Act (ACA) was that it severely limited choices for those who buy insurance through the individual market. For the most part, it limited the ability of insurers to offer plans with different benefits. Many who purchase their insurance through the individual market have been dissatisfied with the limited options. The Trump administration has made several moves to free up insurers, patients, and employers to create a more personalized model of care:
In the span of less than 12 hours last week, the Trump administration took two seemingly contradictory actions that could have profound effects on the insurance marketplaces set up by the Affordable Care Act.
First, officials issued guidance Monday morning that could weaken the exchanges set up for people who buy their own insurance. The new approach makes it easier for states to get around some ACA requirements, including allowing the use of federal subsidies for skimpier plans that can reject people with preexisting conditions.
Yet, the other move — a proposed rule unveiled Monday evening — could bolster ACA marketplaces by sending millions of people with job-based coverage there, armed with tax-free money from their employers to buy individual plans.
This excerpt above from a recent Kaiser Family Foundation article paints these moves in a bad light. However, both of the moves would allow people to move to the type of coverage that better fits their needs. First, by allowing states to provide cheaper plans with fewer benefits, there will be more affordable options for people who buy their insurance through the individual market. These types of plans will be utilized most by those who don’t need coverage for all of the services required by ACA plans or those who don’t have insurance at all.
The second rule expands the usage of Health Reimbursement Accounts which allow employees to receive tax-free dollars from their employer to purchase the type of pans they want. The fear is that these moves will encourage healthy individuals to move off of the exchanges to cheaper plans and individuals with more costly conditions with HRA’s will move into the exchanges.
These fears should be dispelled by efforts of the administration to allow states to create markets that better can offer the services that each population needs. Moving away from the “one-size-fits-all” government-mandated insurance will create opportunities in the market for the most medically vulnerable to get coverage that’s affordable. It will also give increased options those who want to be freed from the limitations and high costs of the ACA plans.
