A consumer examines a chart comparing health-insurance benefits. Companies face new uncertainty as they are deciding plans and pricing for next year.
Consumers and insurers face new uncertainty with the Justice Department’s assertion this week that key provisions of the Affordable Care Act are invalid.
In a brief filed Thursday, the department asked a federal court to unwind the health law’s protections for individuals with existing medical conditions, such as diabetes or asthma. The law, known as Obamacare, prohibits insurers from refusing to sell coverage to people with pre-existing conditions or from charging them more than healthy consumers.
The brief was filed in a lawsuit brought by attorneys general that may take months to wind through the courts, and it isn’t clear what the outcome will be. Changes would create winners as well as losers. Meantime, insurers face new variables as they are deciding where to sell coverage and at what rates in 2019.
Health insurers warned of disruption to the market. “Removing those provisions will result in renewed uncertainty in the individual market, create a patchwork of requirements in the states, cause rates to go even higher for older Americans and sicker patients, and make it challenging to introduce products and rates for 2019,” America’s Health Insurance Plans, a trade group, said in a statement.
Here are four ways the case could affect health-insurance markets:
Options next year: In the short term, some health-insurance markets could see fewer options if companies react to renewed uncertainty by leaving the marketplace, said Sabrina Corlette, a research professor at the Georgetown University Health Policy Institute. “Are some insurers going to cry uncle?” she asked. “Maybe there are some companies that say, ‘Enough already.’”
The marketplace experienced similar tumult about a year ago, as insurers were setting rates for the coming year amid questions about whether the White House would end some ACA subsidies—a step the administration in October announced it was taking.
In some cases, state insurance regulators scrambled last year to ensure markets would be viable. Roughly one-quarter of consumers in the individual insurance markets have only one company selling coverage, according to data from the Henry J. Kaiser Family Foundation. Company exits could leave consumers with no options, though last year new entrants emerged to sell coverage.
Rates next year: Many insurers are already seeking double-digit increases in premiums for 2019. ACA premiums are expected to rise 15% next year, on average, largely because Republicans in their tax law last year got rid of the health law’s penalty for the uninsured, according to the federal Congressional Budget Office. The ACA’s backers argue that lets healthier people opt out of coverage.
Ms. Corlette said insurers could seek further increases as a way to buffer their operations against the latest uncertainty over the health law.
Consumers eligible for ACA subsidies will see that financial assistance rise with premiums, but not all shoppers in the marketplace qualify for subsidies, Ms. Corlette said.
Lower premiums for some people: Should the courts invalidate the requirements on covering people with pre-existing conditions, healthy consumers likely would see cheaper insurance, said Larry Levitt, senior vice president at the Kaiser Family Foundation. Their premiums would no longer be an average market rate that ensures those with pre-existing conditions pay the same premiums, he said, but could reflect the likelihood that healthy consumers would require less-expensive care.
Young, healthy buyers have already seen their options increased by other moves taken by the Trump administration to allow plans that offer limited coverage for a lower price.
Expensive or hard-to-get coverage for some people: People with pre-existing conditions could find they are no longer able to get coverage, should insurers return to practices followed before the health law of charging more to such consumers or refusing to insure them, Mr. Levitt said.
That would vary by state, as some states have their own laws seeking to protect consumers with pre-existing conditions. The Kaiser Family Foundation estimates about 27% of non-elderly adults have pre-existing conditions.