New Study From The Commonwealth Fund Examines State Regulation Coverage Options Outside the Affordable Care Act
The Trump administration’s proposed regulations encouraging the sale of health insurance plans that do not comply with Affordable Care Act’s (ACA) benefit requirements or consumer protections could siphon healthy enrollees from the ACA marketplaces, leaving them with a smaller, sicker group of enrollees. The problem could be compounded when the penalty for not having health insurance is eliminated in 2019.
A new Commonwealth Fund report by Kevin Lucia and colleagues at Georgetown University’s Health Policy Institute examines these “alternative coverage arrangements” — including short-term health plans, association plans, and health care sharing ministries — and the actions states have taken to regulate them.
The researchers find:
- More consumers will be exposed to financial risk and fraud. Alternative coverage arrangements don’t have to meet many – or, sometimes, any – of the ACA’s federal consumer protections. These plans may appeal to healthy consumers because of their low upfront costs. But they often cover fewer services and expose people to high out-of-pocket costs when they get sick. Some of these coverage options also increase consumers’ risk of being defrauded or enrolling in a financially unstable plan.
- Alternative health plans could weaken the ACA marketplaces. The report finds that these cheaper, bare-bones plans would siphon off healthy individuals who would otherwise get coverage in the ACA marketplaces. In turn, risk pools would become smaller and sicker, resulting in higher premiums and fewer plan options for people remaining in the individual market.
- State oversight is weak. Although states have broad authority to regulate alternative-coverage options, most do not – leaving both consumers and their marketplaces at risk...