Anyone paying attention to current events is understandably concerned about the future of healthcare and health insurance. When the Affordable Care Act (ACA), more commonly known as Obamacare, went into effect several years ago, there was a lot of concern and confusion about what would happen.
Would patients really be able to keep their preferred doctors? How much would new plans through the health insurance marketplace cost? And what the heck were death panels? Despite the upheaval natural to any type of sweeping reform at the federal level, Obamacare did have a lot of positive impact.
Not only did millions of uninsured Americans gain access to affordable health coverage, but denial of coverage for preexisting conditions was banned, discriminatory pricing was eliminated, lifetime limits were done away with, and mandatory minimum coverage rules ensured access to preventive medicine for every citizen. It wasn’t an easy transition, but the ACA gained its footing and was beginning to fulfill the promise of reducing long-term costs through coverage and preventive care, not to mention improvements to aftercare standards.
Now Americans once again face an uncertain future where healthcare is concerned. The new president, the administration, and the republican Congress have vowed to shake things up once again by repealing and replacing Obamacare, and perhaps most unsettling is the lack of a solid replacement plan.
What does all of this mean for the average American? What are health insurance costs in 2017 going to look like? Here are a few things you should know.
Prices are Rising
Even without the threat of repeal, Obamacare is having some issues with cost control. This was due in large part to miscalculations on the part of many insurers. The bigger companies seemed to be relying on the sale of higher-premium gold and platinum plans to balance out the lower premiums (and potentially higher claims) of bronze and silver plans offered through state exchanges, and this has not materialized.
As a result, many of the biggest health insurance providers have lost money, and some have even pulled out of the marketplace in several states, or altogether. In 2016, the number of providers by state varied widely, ranging from 16 providers offering plans through the exchange in Texas to just one in Wyoming, and 2017 has opened with just one provider in several more states, including Alabama, Alaska, and Oklahoma, among others.
The flip side is that smaller insurance providers who put their money on catering to the bronze and silver sector have made a killing, so to speak, by offering a slew of affordable plans. However, smaller providers tend to be limited in scope, and many are only able to offer plans in a handful of states, if that. With larger providers pulling out of exchanges or increasing rates to cover costs, this leaves consumers with fewer options and rising premiums.
In fact, prices are slated to increase even more in 2017 than they have in years past. This is due not only to insurance providers losing money, but also to the fact that the reinsurance program initially offered through the ACA is being phased out.
On the upside, eligible enrollees in ACA plans will still receive tax credits designed to reduce the expense associated with premiums. However, prices are going up by different percentages in different states, so how much you end up paying could depend on where you live.
Exemptions May Apply
The Congress is responsible for repealing and replacing the ACA, but that doesn’t mean President Trump has been content to rest on his laurels. During his campaign, he promised that he would start to dismantle Obamacare on day one, and he was more or less true to his word.
Trump’s first executive order aimed to cut the legs out from under one of the most controversial aspects of Obamacare: the individual mandate. The order directed federal agencies to “waive, defer, grant exemptions from, or delay” portions of Obamacare that place financial burden on individuals or states.
What this could mean for individuals having trouble affording their ACA plans is the ability to forego mandatory health insurance coverage without the fear of penalty. In truth, nothing has really changed. The Department of Health and Human Services (HHS) already had the authority to grant exemptions, and they have done so for Americans living below 138% of the federal poverty level, particularly in states that didn’t expand Medicaid coverage, and for other circumstances of hardship.
Of course, even more Americans could now apply for and receive hardship exemptions, but there’s no guarantee of this. Still, if you’re looking to reduce costs for health insurance coverage and your state exchange offers few options, seeking exemptions or waivers might be worth a try.
President Trump has promised to reduce the cost of health care with whatever healthcare reform ultimately replaces Obamacare, but there will be a price tag attached. Critics of Obamacare loudly decried the costs of implementation, even though the plan was slated to recoup initial expense through cutting healthcare costs (thanks to providing preventive care to millions of previously uninsured Americans) and increasing taxes.
Unfortunately, Obamacare will never get that chance to pay for itself, and the act of repealing and replacing it is going to be expensive. According to the nonpartisan Committee for a Responsible Budget, repealing Obamacare could cost as much as an estimated $350 billion, and that’s just the price tag for the federal government – it doesn’t include the costs of transitioning to a new plan for insurers, healthcare providers, drug companies, and consumers, among others.
Of course, this is only speculation at this point. Costs could be much higher depending on the replacement plan Congress ultimately implements. These costs could be offset, too, provided a future administration gives this pass at healthcare reform time to mature.
This is all moot for 2017, though. Even if Obamacare is repealed and replaced this year, as anticipated, the transition will take time and existing health insurance plans will go through a potentially lengthy grandfathering phase, as we saw when Obamacare was enacted, so prices are likely to remain steady throughout the year, at least.
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