Will Trump’s Executive Order on Obamacare be bad for health insurance?

Oct 27, 2017 (0) comment

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On October 12th, 2017 President Donald Trump signed an executive order that may have dealt a death blow to

Obamacare.  Trump’s executive order on Obamacare ended scheduled payments to insurance companies that help lower deductibles for low-income customers. 

How will Trump’s executive order on Obamacare affect health insurance for 2018?

Right now, there is no way to know.  New rates do not come out for 2018 plans until November 1st.  There is still a lot of speculation regards what will happen.  In order to help you understand the possible outcomes, we wanted to provide you with the current state of health insurance and how trump’s executive order on Obamacare could change health insurance.

How will health insurers adapt to the loss of subsidy payments?

The federal government provides subsidies to health insurers in order to help reimburse  them for the low-income clients they are forced to sign.  However, according to the Congressional Budget Office, the $7 billion-a-year cost-sharing payments could end up costing the federal government $200 billion dollars over the next 10 years.  How is that possible? Regardless of if the subsidies are paid, the Affordable Care Act (ACA) requires that premiums do not exceed a set percentage of a person’s income.  If premiums were to rise over time, the government will be forced to provide more tax credits so consumers can continue to pay the same amount for premiums.  How will insurers adapt to Trump’s executive order on Obamacare?  Two options are very real.  The first is, in order to recoup their loses, insurers may increase premiums to those who get health insurance outside of the ACA exchanges.  Mostly middle-class America will feel the rise of their premiums.  The second is that more insurers, like Anthem here in California, could end up not offering health insurance to entire markets in order to cut losses. 

Who will not be affected by Trump’s executive order on Obamacare?

Those least affected will be those who already receive a subsidy through the ACA, or employees who receive insurance from their employers.  Fortunately, the executive order also exhorts government agencies to make new rules that allow American’s to sign up for cheaper, less-regulated health plans.  There may be a way for those most affected by the subsidy non-payments, Middle-Class, to get cheaper, less expensive plans.  However, we do not know at this time if Trump’s executive order on Obamacare will truly provide better, less expensive, plans.  At this point, it is pure speculation.

What to expect with your health insurance plan premiums on November 1st?

Unfortunately, higher premiums.  Trump’s executive order on Obamacare has added an additional stress to our already fragile health insurance markets.  Even ACA exchange plans are expecting a 12.5% premium increase for 2018Trump’s executive order may cause even higher premium increases for ACA exchange plans here in California.

Will there be a bipartisan effort to fix parts of the ACA and stabilize health insurance market?

Maybe.  Currently,  a plan to do just that is being backed by 14 Republicans and 48 Democratic senators.  However, the plan would include reinstating the payments to insurance companies while providing some states flexibility on offering cheaper, less glorious plans. 

Will Trump support this plan?

As of now, we are not certain.  We will make sure to update this blog as events continue. 

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