How Private Health Insurance is Changing in 2019?

By March 1, 2019Uncategorized

Health care reform has been a dominant topic since the 2017 presidential election. Numerous acts have been introduced to repeal or reform the Obama administration’s Affordable Care Act (ACA). The most notable among these acts was the American Health Care Act (AHCA), which was passed by the House of Representatives only to famously fail in the Senate after a dramatic thumbs-down vote by John McCain. Despite the flurry of political debate, news coverage, and legislative activity surrounding the ACA, it continues to remain in effect today, albeit with some important changes coming in 2019.

The most significant change introduced in January 2019 is the reduction of the individual mandate penalty to $0. As part of the tax reform bill signed into law in December 20171, this change is significant for several reasons. First, it eliminates the metaphorical stick used to goad the young and healthy into buying health insurance. The elimination of this incentive will likely lead many young people to forgo purchasing insurance, making the overall pool of insured Americans older and less healthy, thereby raising the cost of premiums. The impact on premiums will be compounded by the Trump administration’s decision to stop reimbursing insurers for cost sharing. Some experts project that premiums will increase an average of 2.8% (nearly $580 per year) in 2019, largely as a result of these policy changes2. Even more significantly, in the case of Texas vs. Azar, twenty states challenged the ACA in federal court on the basis that the $0 individual mandate penalty no longer qualifies as a tax, making the law unconstitutional.3 A federal judge in Texas ruled in favor of the states, sending the case up to the Supreme Court for consideration, where a final ruling on behalf of the states could potentially toss out all of Obamacare.