In championing the enactment of the Patient Protection and Affordable Care Act in 2010, the Obama administration held to a bedrock policy principle of preserving the employee benefit-based system that covers medical care costs for the vast majority of Americans under age 65. That would be the least disruptive to the current scheme and thus politically viable, the thinking went. The Affordable Care Act also reinforced the role of employer sponsored medical benefit plans by requiring employers of more than 50 to offer them to most of their employees and requiring small employer plans offer specified benefits.
Trump administration policy bolsters the role of employer group coverage even more, clearly favoring it over non-group. During the past year, it has reduced funding for outreach and enrollment for individual plans sold on state health benefit exchanges while promoting enrollment in the exchanges’ Small Business Health Options Program (SHOP). Additionally, the administration has refused continued funding of subsidies to assist low income households with out of pocket costs for silver level individual plans sold on the exchanges.
Then on October 12 of this year, the administration issued an Executive Order directing federal regulatory agencies study three possible areas where employer-based coverage could be expanded by administrative rulemaking or agency guidance.
- Expanding Association Health Plans to small employers and potentially based on industry or geographic regions. Some early analysis of this provision speculates that individuals who are self-employed with no staff could be included in the expansion, but it’s unclear whether sufficient statutory authority exists because such individuals are not employers. Initial analysis also warns that expanding these multi-employer plans could jeopardize the actuarial viability of non-group coverage.
- Liberalizing rules governing employer-sponsored Health Reimbursement Arrangements (HRAs) to help offset employee costs for medical care, including premiums for non-group coverage. While this provision of the order recognizes a role for non-group coverage, it puts employers in a major role in sharing a portion of its costs for employees, impliedly recognizing the primacy of the employee-benefit coverage model for those under age 65.
- Making short term medical insurance coverage for individuals available for longer than the current three months allowed under existing rules and on a renewable basis. Short term coverage tends to appeal to those between jobs and thus implicitly reinforces the dominant role of employment-based plans.
Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email