New United Hospital Fund Report Assesses Insurance Market, and Impact of Recent Trump Administration Actions

Tuesday, October 31, 2017

New United Hospital Fund Report Assesses Insurance Market, and Impact of Recent Trump Administration Actions

New York’s individual market is vastly improved since the implementation of the Affordable Care Act (ACA), but trends suggest the need to consider options that would bolster the market, while recent actions by the Trump administration may make that task harder, according to a report issued by the United Hospital Fund (UHF).

As 2018 Open Enrollment Begins, Trump Administration Adds New Challenges for New York’s Individual Market uses recent enrollment figures and federal data on premiums and claims to assess the market as New York begins its fifth open enrollment period under the ACA on November 1. According to the report, New York’s average individual premium in 2016 ($475 per month) was well above the national average ($405) and higher than 43 other states. Based on claims data collected as part of the federal risk adjustment program, New York’s risk score (1.816) was also above the national average (1.644), and higher than 40 other states, indicating a “sicker” individual market risk pool than those states.

“New York’s individual market is still in a lot better shape than it was in 2013,” said Peter Newell, author of the report and director of UHF’s Health Insurance Project. “But these recent trends suggest the need to consider options to bolster the market, such as reinsurance, or finding ways to encourage younger, healthier individuals to sign up. Unfortunately, recent Trump Administration actions and mixed signals from Congress and federal agencies may make this task harder.”

The report discusses recent legislation and administrative decisions that have muddied the water for states, and provides a preliminary analysis of the impact of two recent actions taken by the Trump Administration: 1) the cutoff of roughly $7 billion in cost-sharing reduction payments owed to health plans nationally, which they receive in exchange for lowering out-of-pocket costs for eligible enrollees; and 2) an executive order directing federal agencies to issue regulations facilitating “the purchase of insurance across state lines,” by removing legal barriers to so-called “association health plans” (AHPs), under which groups of small employers or individuals are bundled together as a large group,  and “short-term limited duration insurance” (STLDI), which typically offers limited benefits and high cost sharing.

The suspension of cost-sharing reduction payments will have little impact on New York’s individual market for 2018, but could create more problems next year, when health plans will reevaluate their participation in the market, the report says. The cessation of these payments also clouds the future of New York’s Essential Plan for lower income enrollees, since the payments help fund this program.

While other provisions are difficult to evaluate without reviewing the regulations, the report says that the AHP proposal presents more of a risk to the stability of the small group market than the individual market. Since STLDI coverage is currently prohibited in New York, loosening national rules should also have a limited impact.

The full report can be downloaded at UHF’s website.

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