WHAT MIGHT TRUMPCARE DO TO INSURANCE MARKETS?

It started as ObamaCare.

Now TrumpCare is being threatened, though no one seems to have much idea what it will look like. And with all the relative volatility calming down of late, would any adjustments to the Affordable Care Act send the insurance market into more chaotic turmoil?

In the aftermath of the Republican-controlled Congress failing on its best chance to repeal ObamaCare – which the GOP had campaigned on in each of the last three congressional election cycles since the CA was signed into law in 2010 – the Trump Administration has been working on moving on from ObamaCare repeal and was instead working on making ObamaCare more palatable while all the evidence shows it was collapsing in its current form.

Where legal, Health and Human Services Secretary Tom Price is working to ease some of the regulatory burden on consumers and insurers to make the ACA truly more affordable. However, just as that happens, President Trump has been threatening to take away the federal subsidies that insurance companies receive to help mitigate the huge premium increases that have happened every year since the law went into full effect.

Insurance companies have been pulling out of the various state and federal exchanges in order to mitigate losses, and that meant several counties nationwide having either zero or one insurance company in the exchanges, severely limiting options for consumers. And now with the threat of subsidies being removed, that may send the entire insurance industry into an accelerated death spiral, as premiums would likely increase more exponentially to cover the lost subsidy money.

Would that move collapse the insurance market, or open up more competition and perhaps lower prices for insurance? And what about the insurance mandate, which Trump has said would get repealed? If insurance companies don’t get subsidies, and people aren’t going to be penalized for not buying insurance, could the insurance market survive with this stretching out of the universe of consumers?

The latest about health-care has Trump looking to move away from his campaign promise of repealing and replacing the ACA, to now talking with a bipartisan group of congressional members about a “fix” of ObamaCare – though there are no details about what that fix may entail. And of course it leads to the question of whether the law will actually be “fixed” in a way that will favor consumers, or “fixed” in favoring a certain agenda toward either more free-market insurance markets or a lurch into single-payer, socialized healthcare.

Now that Trump’s promise of repeal seems to be off the table, TrumpCare now looks like it might be a “fixed” version of ObamaCare. The real question is whether that fix will be for the benefit of consumers  or for the government. There is no middle ground.

The insurance marketplace was just starting to stabliize after six years, but then the uncertainty of repeal now being replaced by “fix” options. With some insurance companies actually doing a little better now than before (more because of pulling out of individual exchanges to shed costs, rather than gaining more customers), more uncertainty is sure to keep the market on its toes and in continual chaos for the foreseeable future. Chaos is not good for consumers, nor for the economy.