Open a can of worms…an expression that means an attempt to solve one problem, or take action to address a complicated situation, that creates a whole litany of other problems that were not there in the first place. In other words, Trump’s Executive Order on Healthcare Choice and Competition.
The Executive Order was signed October 12, 2017 with a Presidential promise that millions of Americans “…will get such low prices for such great care…great, great health care”. Since that time, healthcare policy (and politics) has remained front page news. Will there be a bipartisan agreement on stabilizing the Affordable Care Act (ACA)? What else will the Administration do to undermine Obamacare? Why can’t/won’t Congress reauthorize the Children’s Health Insurance Program to restore health coverage to 9 million American children?
For 155+ million people covered by employer-based group insurance, the market remains stable. Most at risk is the small group market with the introduction of Association Group plans having a long history of inadequate benefits, insolvency, fraud and abuse. Additionally, the concept of selling health insurance across state lines to lower premiums is not the silver bullet America is being peddled. Barriers to entry, while in part regulatory, are truly financial, actuarial, and provider network or contract related…because the key driver of health insurance premiums are local costs of health care.
Short-term, for approximately 60 million Medicare beneficiaries expect a growth market. As 3.5+ million Americans turn age 65 every year, popularity of Medicare Advantage, Part D Prescription Drug and Medigap policies will continue. Expect new market entrants and geographic expansion among the existing competitive set. And, while traditionally Washington is afraid to touch off a Boomer revolution by tampering with Medicare, current budget and tax proposals include $473 billion in Medicare cuts over next 10-years. Time will tell.
The individual medical insurance market (estimated at 16 million) and Medicaid (70 million recipients) are both at risk. The 2018 proposed federal budget includes $1 trillion in Medicaid cuts over 10-years along with pushing financial obligations to States under a block grant gambit. Of course, the Administration’s blatant sabotaging of the ACA will also take its toll. With the uninsured rate already climbing after years of record lows, it’s estimated that at least 1 million fewer people will sign-up for coverage during this years Open Enrollment Period, in part due to slashing ACA advertising by 90% compared to last year.
With much of Trump’s Executive Order implementation left to HHS and other government agencies, go-forward rules and guidance can only be categorized as ‘known unknowns’ at this juncture. Many insurers are either in decision paralysis, exiting markets, or aggressively reengineering risk management and pricing models. Providers of care are huddled in Board rooms anticipating an uptick in uncompensated care and strategizing around compressed payment rates and narrowing networks.
What about health insurance consumers? The prevalence of high deductible health plans (HDHPs) has created an out-of-pocket healthcare ecosystem. HDHPs now represent over 40% of employer coverage and almost all of individual health plans – 43% insured adults report difficulty paying their plan deductible. This, combined with the increasing number of alternative sites of care, from hospital-owned physician groups to retail outlets to telemedicine tools, means navigating complexities of our health care system is more onerous than ever. Consumers are confused and uncertain about the future of their healthcare. However this means there’s a big opportunity for payers and providers to step-up and emerge as trusted resources helping their members and patients take ownership of their health by making smart, value-based financial and clinical choices.
This can change overnight as new strategies emerge, political winds shift, or ‘art of the deal’ negotiations change…
Add fuel to the fire...an expression used when one does or says something to worsen an already bad situation by further incensing an already angry or threatened person or group of people. In other words, Trump’s next Executive Order…or Tweet.