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.

2019The types of private insurance plans available to consumers and the ways in which they can be purchased are also scheduled to change in 2019. Short term plans in 2019 can be purchased for up to one year of coverage and can be renewed for up to three years—a significant change from the maximum three months of coverage allowed previously. Policies have also been revised to expand the availability of “association plans,” which are health insurance plans offered by trade, industry, and professional groups to their members. These plans are usually cheaper than insurance offered by employers, but in most cases fall short of the full suite of benefits required of ACA-compliant plans.4 Additionally, licensed online brokers will now be able to directly enroll customers into health insurance plans, where they were previously required to redirect customers to government-run exchanges for verification of eligibility criteria and enrollment. Now in 2019, customers can complete the entire enrollment process on third-party, private websites.4

One of the most notable developments for health insurance in 2019 is the emergence of greater variability in insurance plans across state lines. The Trump administration’s efforts to loosen ACA restrictions have led to a divergence between blue and red states as the former pass laws to reinforce Obamacare policies, while the latter passively embrace the federal pullback. In Minnesota, for example, silver plans are expected to be 11% cheaper in 2019 compared to 2018, while in Maryland silver plans are expected to be 36% more expensive.5

While these changes to private health insurance aren’t expected to have a special impact on anesthesia care, anesthesia providers will have to cope with the increased uncertainty presented by the current policy environment. Rising premiums and the elimination of the individual mandate penalty may lead to a reduction in the number of insured patients, which could reduce demand for some anesthesia services. The increased state-to-state variability may also complicate operations for anesthesia practices serving populations across state lines. Anesthesia service professionals should remain engaged in policy discussions happening in 2019 in order to stay ahead of any further changes on the horizon.

References:

  1. Armour, Stephanie and Kristina Peterson. “Senate GOP Tax Plan to Include Repeal of Health Law Individual Mandate,” The Wall Street Journal (November 14, 2017). https://www.wsj.com/articles/senate-gop-tax-plan-to-include-repeal-of-health-law-individual-mandate-1510690807.
  2. Gaba, Charles. “The Chart That Shows the Price Tag for Trump’s Obamacare Sabotage,” The New York Times (December 27, 2018). https://www.nytimes.com/2018/12/27/opinion/trump-obamacare-sabotage-chart-cost.html.
  3. Keith, Katie. “Court Rules Individual Mandate, Entire ACA Unconstitutional,” Health Affairs 38, no. 2 (2019): 1-2. doi: 10.1377/hlthaff.2019.00024.
  4. “7 Big Health Insurance (Obamacare/Trumpcare) Changes for 2019.” eHealth. Last modified October 2, 2018. https://www.ehealthinsurance