The ACA individual market for the next four years

I recently was on a panel to discuss the future of the individual market over the next four years of the Trump Administration.  I want to write up my notes and some of my thoughts from my portion of the talk.

I think that the changes of the Trump Administration from the Biden Administration are in the realm of normal, thermostatic politics where one party comes in and pushes in one direction and then the other party pushes back once they have the ability to do so.  The proposed program integrity rule that is out for comments (due early April) is an attempt to make the ACA a much smaller market.  But I don’t think this is an existential threat (that is Medicaid)

The ACA under the Biden Administration was primarily focused on taking care of the needs of the subsidized population.  The Trump Administration has made it clear that their priority is the non-subsidized population.  I think that there is a chance of a limited subsidy extension for individuals over 400% FPL so instead of going from 8.5% of income for a benchmark plan to unlimited exposure on 1/1/26, there might be an extension for either 10% or 12% or something like that cap.

In order to drive down gross premiums, lower value plans will be offered.  The de minimas variation will be increased so a Gold plan now will have an allowable minimal value of 76% AV instead of 78% AV, and so on.  The calculation that drives maximum allowable out of pocket limits will be tweaked to inflate that total cap.  Essential Health Benefits will be squeezed.  I will be surprised if there is not a proposal for a Copper Plan. 

I anticipate a lot more state autonomy and action.  I anticipate a few Section 1332 reinsurance waivers as the math unlikely maths well, or at least I’ll be writing those comments letters on the goddamn regular.  I anticipate a lot more Section 1332s that go along the Georgia Access Model proposal from 2020 where federal subsidy funds were designated to pay premiums for underwritten coverage that can take health history/pre-existing conditions into account to set premiums and exclude people.    I think there will be a lot more Premium Alignment policies like what Texas, Virginia, New Mexico and Pennsylvania are doing [my manuscript on this is going out the door on Friday at the latest… it improves affordability for a lot of subsidized and non-subsidized buyers].  I think a lot of Blue States will take a look at their current reinsurance programs and redirect them to more cost-effective targeted subsidies.

I think Individual Contribution Health Reimbursement Accounts (ICHRA) (ie defined contribution employer health insurance) will become more important and act as a political and policy stabilizer as these concepts don’t work without a viable guaranteed issue individual market.

I have several under-developped thoughts on Section 1331 (Basic Health Programs) and Section 1333 (interstate compacts).  I think BHPs are intriguing and have something on them just accepted this week, and 1333 won’t do much.  I think there are options for states to adjust to large Medicaid cuts through chunks of the ACA.

These are my rough thoughts as I presented them earlier this week.