President Trump’s executive order on the ACA enforcement solves nothing and introduces ambiguity into an already difficult system.
The President promised to repeal and replace the ACA. While he and the Republican leadership have struggled to develop an alternative plan, the American people were told that there would be an alternative before ACA was removed.
We now have something worse.
The ACA is still the law of the land.
It’s enforcement is now vauque.
The executive order directs the agencies not to enforce provisions they deem unduly burdensome on individuals, states or insurance companies.
What does “unduly burdensome” mean? This is subjective and left to the individuals at the agencies to decide. So, does the law still have effect or not?
Will the IRS impose penalties on individuals who don’t carry insurance?
Will insurance regulators go after insurance carriers who drop policies that become too costly?
If insurance is no longer mandated by the federal government, can self employed people still take deductions for premiums?
Can insurers cut 24 year old children from their parent’s plan?
Based on the directive, the law can be selectively applied, not uniformly enforced.
The Obligation of Expenses without the needed revenue
Under the ACA, insurance carriers must cover people regardless of preexisting conditions and impose no lifetime limits on coverage amounts. This increases the risk and expenses to carriers. Since the cost difference between younger and older people can only be 3x, insurance companies are a counting on the addition of younger, healthier people to offset the cost of older people.
Even with the existing law, and the influx of healthier people along with the higher risk pool, insurance premiums have skyrocketed.
What will happen when healthier people decide that they will not buy insurance?
If still held to the coverage requirements, insurance carriers must increase the rates for remaining customers even further.
If let out of their obligations because regulators deemed them to now be too burdensome, insurance carriers can drop customers, impose caps and still increase rates.
The executive order on the ACA was an unfortunate political stunt that can have unknowable and unmanageable implications. We have only touched on a few potential issues. The complexity of the law and tax regulations round it create a web of possibilities that will be far worse than the ACA itself. We don’t have time for stunts. We need solutions.