How will Trump’s healthcare subsidy slash impact my insurance plan?
President Trump has jump-started a plan that is certain to change the Federal health insurance marketplace we all came to know under the Affordable Care Act (ACA). Under the ACA, an extended marketplace was created where millions of Americans could purchase health care plans and use government subsidies, if qualified, to offset premium costs. Trump announced he plans to end those cost-sharing subsidies as a start to dismantling Obamacare.
Insurance companies are already tied to contracts committing them provide plans in the 2018 marketplace. Insurers are obligated by law to offer reduced deductibles and co-pays for these plans and for individuals that qualify for tax credits. However, without the subsidies, they will no longer be paid by the government for the discounts they provide. With this uncertainty over subsidies, insurers are unwilling to wait and are looking for ways to make up for their loss now.
This is the main cause for plan premiums spiking in costs for 2018, some up to 20% more. So, who will feel this change the most? The most common plan purchased in the Federal marketplace is a Silver plan, which also happens to be the plan in which most of these price spikes are being applied. Individuals who make too much money to qualify for any tax credits or individuals who do not receive health care through an employer will be making the choice of paying for those higher premiums for the plan they need or paying a lower premium for less coverage.
Cutting subsidies could leave millions of Americans choosing to pay for their health or home. If someone chooses a lower premium for less coverage, because that’s what they can afford month to month, it could still land them in trouble. They will be paying a high out-of-pocket expense if they actually need to use their insurance (doctor visits, medication, emergencies, etc.). On the other hand, they could be paying that higher premium for more coverage that accommodates their medical needs but could end up struggling to pay month to month.
There are already predictions for the 2019 marketplace and the effects they will have on the consumer. Talk of some insurers leaving the public marketplace is buzzing around. This will leave limited choices for consumers and will give insurance companies less competition, allowing them to make even more changes to plans. Another forecast is that insurers will start denying more claims and will become more strict on what is “medically necessary” or what is considered a pre-existing condition and if it will be covered (ex: diabetes, obesity).
Enrollees for the marketplace who qualify for and use the subsidies and tax credits will least likely be affected by Trump’s decision to end the cost-sharing assistance. Everyone else looking for health insurance in the federal marketplace, keep an eye out.
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