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7 Obamacare Repeal Changes and How to Prepare for Next Year’s Insurance Market

Last week (February 13-17) was a busy week on the Obamacare repeal front.  Three notable things happened on the insurance front:

  • House Republicans were presented with a repeal plan;
  • One insurer dropped out of the Exchange (with another wavering); and
  • CMS issued a proposed rule to calm the insurance market to prevent a collapse.

Here are the highlights and what it means to you:

House Republicans Getting their Act Together.  The outline of a proposal to repeal Obamacare was presented to the House Republicans by the leadership.  While the devil is in the details and we’re waiting to hear about them, the proposal featured the following:

  1. Goodbye to Penalties:  Immediate repeal of penalties for violating the requirement to buy health insurance.
  2. Tax Credits:  Will be used to help people by health insurance. These credits would be based on age, not income.
  3. Increased Focus on Health Savings Accounts.
  4. Restructuring Medicaid:  Major reductions in the amount of money states receive to run their Medicaid programs.  
  5. Creation of High Risk Pools:  To pay for sicker patients.
  6. Easier to Buy Insurance Across State Lines.
  7. Pre-existing Conditions:  Acknowledgement that this problem needs to be addressed but unclear how it will be accomplished.

The proposal calls for the repealing of all taxes currently assessed to pay for Obamacare.  How this proposal would be funded remains to be seen.

Insurance Company Dropouts:  Humana announced that it will be completely withdrawing from the exchanges in 2018, dropping its current coverage of roughly 150,000 consumers. Molina Healthcare also expressed reservations about continuing with its participation in the exchange.

What this Means to Me:  This news is consistent with the message that many of the insurance companies have been delivering over the past few weeks. The CEO of Aetna described the exchange in a death spiral.  It is not helpful to the stability of the Obamacare Exchanges for insurance companies to drop out. It means fewer insurance companies to provide insurance and fewer companies to keep prices down. Nothing good for consumers about this development.

So What to do About the Nervous Insurance Company Market?

Answer:  Have CMS (The Centers for Medicare & Medicaid Services) try and stop the bleeding by issuing rules to stabilize the individual and small group insurance markets. Late last week, a proposed rule was issued which is designed to calm the nerves of the insurance companies. The key changes are:

  1. Special Enrollment Periods.  Tighten the rules on individuals who enroll during the special enrollment period by requiring them to submit paperwork that verifies that they qualify for enrollment.
  2. Collect Unpaid Premiums.  Allowing insurance companies to collect premiums for unpaid coverage before enrolling a patient in next year’s plan with the same insurer.
  3. Shorten Time Period for Open Enrollment.  The proposed rule would shorten the time for open enrollment in the individual market from November 1, 2017 - January 31, 2018 to November 1, 2017 - December 15, 2017.

What Does This Mean to Me?  While these are just proposals at the moment, it should give you a good idea about what’s on the horizon.  

What Do I Need to Do?

  1. Be prepared to enroll on November 1, 2017;
  2. Don’t rely on the special enrollment periods to get insurance; and
  3. Be sure your premiums are paid and up to date.