In a video message and one-page fact sheet, President Trump announced a health care framework aimed at lowering costs and “holding big insurance companies accountable.”
Some provisions look very similar to ones that are already in the Affordable Care Act (ACA). For example, the ACA as implemented, includes public data on claims denials and insurer overhead, and “plain-English” insurance coverage summaries. Additionally, the first Trump administration used ACA authority to require hospitals and insurers to reveal prices.
Additionally, the Obama administration had made payments to insurers for cost-sharing reductions, but in Trump’s first administration, those payments were halted. The “Great Healthcare Plan” appears to be a 180, proposing to reinstate the payments to insurers. (Another post explains how this could leave many ACA enrollees paying more, not less.)
Other provisions of the president’s health care framework, though, sound like a radical departure from the Affordable Care Act. It’s not entirely clear from the summary exactly what is meant by the proposal to “send the money directly to the American people.” The fact sheet says it would allow Americans to use the “extra” taxpayer-funded subsidies to “buy the health insurance of their choice.” In recent months, Congressional Republicans have proposed a few policies that would expand or fund Health Savings Accounts (HSAs), but those proposals vary significantly from each other.
For example, a proposal by Senator Scott would allow states to seek a waiver that would allow all the ACA’s tax credit dollars to be used for non-ACA compliant coverage that sets higher premiums for people with pre-existing conditions. If, as expected, healthier people choose medically underwritten plans, those left in the Marketplaces would be sicker. That would likely lead to a “death spiral” in the ACA markets in states that took up that waiver, potentially leaving many people with pre-existing conditions without any option for health coverage. A very different HSA proposal by Senator Cassidy would have directed only the “enhanced” portion of the ACA’s premium tax credits to HSAs, which would have only been available to ACA Marketplace enrollees. The Cassidy plan likely would not pose the same risks of ACA market instability as the Scott plan.
The president’s plan is vague and, without knowing more, it is impossible to say what the implications would be for people with pre-existing conditions who rely on the ACA markets. The framework does not explicitly say people with pre-existing conditions are protected. The short description leaves open key questions, including:
- Is it only the enhanced premium tax credit dollars that would be converted to a savings account, or are other taxpayer subsidies included in the “extra”?
- Who is eligible for this financial help and how would it be calculated and dispersed? Who will end up paying more and who will pay less?
- Would the funds be limited to out-of-pocket costs only or be used for premiums?
- Would any savings account money be in addition to or in lieu of premium tax credits, and would enrollees have a choice?
- Would this new financial support be available only on the ACA Marketplaces or could it be used to purchase health insurance that discriminates against people with pre-existing conditions, potentially leading to instability in the ACA Marketplace?
Until the “Great Healthcare Plan” takes shape and details are filled in, it leaves open questions about out-of-pocket costs, premiums, federal spending, and health coverage for people with pre-existing conditions.