Though Congress last year failed to repeal key Affordable Care Act requirements for non-group health insurance that people buy themselves, the Trump Administration and some states are promoting other types of plans through regulatory changes that would allow the sale of products that skirt many of the ACA’s requirements.
A new Kaiser Family Foundation brief examines four of those options and the tradeoffs involved if such loosely regulated markets take root as an alternative to the ACA-regulated market, particularly as the repeal of the individual mandate penalty takes effect next year. These four options are:
Each of the four plan options would create parallel insurance markets with different and more limited consumer protections, resulting in lower premiums but less coverage and financial protection for those who are able to enroll. In many cases, these plans also could bar or discourage people with pre-existing conditions from enrolling, leaving the ACA-regulated individual market with a pool of relatively sicker enrollees that would require further premium increases.
About half of people in the current ACA-regulated market (including the vast majority who sign up through the marketplace) receive tax credits that would shield them from such premiums increases, providing some stability in the ACA market. However, middle-income people who are not eligible for tax credits, and who have pre-existing conditions, will not have any meaningful new coverage options under any of these proposals and could find their ACA individual insurance that covers essential benefits and pre-existing conditions growing more expensive, potentially pricing them out of affordable coverage altogether.