In a new report, the Urban Institute predicts 6.4 million more people will be uninsured in 2019 because of eliminating the individual mandate penalty and other policy changes, including the end to cost-sharing reduction (CSR) payments to insurers and cuts to the 2018 open enrollment period for Affordable Care Act plans.
The Urban Institute, a group that backs the law, predicts 12.5% of nonelderly Americans won’t have health insurance next year compared to 10.2% now.
The Trump administration's plan to expand short-term catastrophic plans will also increase the number of people without minimum essential coverage granted in the ACA. The report said 2.5 million more people will have a catastrophic plan next year compared to about 110,000 people starting 2017.
The Urban Institute predicts that a total of 32.6 million people won’t have health insurance in 2019 and another 4.2 million will rely on a short-term catastrophic plan, which offers limited benefits.
The report said cutting the individual mandate penalty and expanding catastrophic plans will result in fewer people in the ACA exchanges. That will mean fewer members to offset the sickest members, which will result in higher premiums. Urban Institute said ACA-compliant nongroup insurance premiums will increase by 18.2% on average in the 43 states that do not prohibit or limit short-term plans.
Also, the report suggests that federal government spending will increase 9.3% because of “the combined effect of expanding short-term limited-duration policies, eliminating the individual-mandate penalties and other recent policy changes. This increase in federal spending is lower than the overall increase in premiums because of cost reductions caused by decreases in enrollment,” the group said.
The Trump administration recently announced it will expand the length of short-term catastrophic plans to one year. The plans won't be required to comply with ACA regulations, so members won't be protected by annual and lifetime out-of-pocket cost limits and won't be guaranteed the ACA’s 10 essential health benefits, including maternity care, hospitalization and prescription drug coverage.
Catastrophic plans don’t meet the minimum essential coverage standards under the ACA and the Congressional Budget Office doesn't consider catastrophic plans private insurance. Currently, only people who meet certain requirements, such as not being able to afford health insurance or being under 30 years old, are eligible to have a catastrophic plan, and those are limited to three months.
However, by expanding the program to everyone, the Trump administration is viewing catastrophic plans as direct competitors with the ACA exchanges that will give low-cost options to Americans.
Catastrophic plans offer low premiums and provide limited coverage, but also mean high deductibles and members picking up more of the costs if they actually need to use the coverage. That’s not ideal for people already insured in other plans, but could be worthwhile for people who are young, healthy and not already covered.
“If you don’t have insurance today and you have a high-deductible plan, it’s better than nothing,” Chris Stenglein, CEO of Aquina Health, recently told Healthcare Dive.