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Can Trump’s Health Care Policies Increase Premium Prices For You?

The affordable care act has been weakened by the numerous steps undertaken by Pres. Trump without being replaced or repealed. The Trump administration proposed plans to slacken controls on short-term insurance on February 20, 2018. Trump had stated in his executive order in October 2017 that he intends to allow short-term insurance policies to last for up to a year. This was in sharp contrast to the previous administration under Pres. Obama which had capped short-term policies for 90 days. The argument put forward by the Trump administration states that more Americans will be able to find coverage that meets their requirements because of the Executive Order. Short-term plans are available at an affordable cost but don’t offer many benefits on the policies. This has led many people to ask whether this was the change that was being spoken about during the election campaign in 2016?

Short Term Plans Only Attractive For the Young

As the plans proposed are attractive to just young and healthy people, the changes proposed are likely to increase the premiums for comprehensive plans. On January 11, 2018, the Trump administration had allowed states to force work requirements on recipients of Medicaid and at least 10 states had requested the permission. It will cut off benefits for healthy recipients unless they are employed, studying in school or working as caregivers.

Approximately 95% of Medicaid recipients will not be affected by this requirement because nearly 60% are younger than 18 years or older than 65. 25% have already joined the workforce and the remaining 10% are either students, disabled or caregivers. The requirement is forcing the minor percentage of single adults without children for whom the affordable care act was providing benefits.

Withdrawal Of the Mandate

President Trump had signed the tax cuts and jobs act on December 22, 2017, and had repealed the Obama care tax for people who are not eligible to get health insurance. This had, in turn, removed the incentive for the healthy to purchase insurance.

Estimates were provided by the CBO that nearly 13 million people were susceptible not to be insured because of the act. The costs of healthcare will increase because fewer healthy people will be paying premiums leaving insurance companies dealing with people who are just sick.

Withdrawal of the mandate will also ensure that fewer people will have access to preventive care or the treatment needed for chronic conditions. The conditions of the few without access to preventive care is likely to create a health crisis. They will be required to utilize unaffordable emergency rooms as a relief for primary care which could spiral the costs of treatment for everyone. The brunt of the price hikes will be borne by some parts of the South as well as the Midwest. Premiums are expected to rise between 35% to 94% over the next three years.

The Executive Order From President Trump Has Weakened Obama Care

The executive order signed by Pres. Trump on October 12, 2017, modified Obama care in multiple ways and the changes became effective in January 2018. The order fulfilled his campaign promise to permit health insurance companies to sell insurance policies across state lines even as every state has specific regulations. In any case, national insurance companies were finding it expensive to operate in multiple states at the same time. The result of the order ensured that five insurance companies serviced nearly 50% of the population that had purchased insurance. The higher competition should have reduced the monopoly of insurance companies and lowered the costs. In the current scenario, it is likely that the Executive Order will be giving the large insurance companies that are powerful to operate across different states by making it easier for them to do so. That the policies will not be closely regulated as before is even more frightening. The administration is exempting them from the rules framed under the affordable care act from state licenses.

The 10 essential benefits of the affordable care act will no longer be offered in the plans which could also reimpose annual and lifetime limits. The plans may begin to look like they did during the early 90s when 398,000 people were left with $123 million worth of unpaid claims. The effect of the Executive Order would drive people away from the insurance plans offered by exchanges.

The order will also affect people covered under company-sponsored plans. The affordable care act allowed employers to select coverage offered by any state because it mandated that every plan should have similar benefits. Currently, employers may begin to hunt for new plans with fewer benefits because they are more affordable.

The healthcare policies of Pres. Trump has certainly brought down the prices of health insurance but has also curtailed some of the benefits that were earlier offered. Under the circumstances, insurance companies will be forced to increase premiums by around 20% which is likely to affect everyone. Whether further changes will be made, are too early to contemplate but for the moment the odds are in favor of higher premiums for health insurance policies.

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