Although the administration has been unable to rescind the Affordable Care Act (ACA), better known as ObamaCare, the tax reform legislation repealed the individual mandate portion of the ACA. Individuals will no longer be taxed if they fail to participate in healthcare programs. The effect of the repeal of the individual mandate is that, in theory, greater numbers of persons will fail to participate in healthcare programs, thus limiting the expansion of healthcare coverage in the U.S. Proponents of the ACA contend that it resulted in an additional 20 million Americans being covered, but half of the additional coverage was not attributable to the ACA itself, but to the expansion of the Medicaid program, a program available similar to Medicare for low-income individuals.
Major developments are occurring concerning the use of so-called "skinny" health plans. Such plans were allowed even during the Obama Administration, but were limited to short-term plans primarily covering persons temporarily out of work. Such skinny plans did not require compliance with the ACA and could limit coverage of those with pre-existing conditions or not cover all the range of essential health benefits required by the ACA. As a result, the skinny plans were much cheaper for participants than other types of coverage.
Currently, there is a proposed rule which would allow sales of skinny plans for up to a year in duration, including a request for comments on allowing health insurers to continue sales of the plans for 12 months or even longer. These type plans are very inexpensive and thus very attractive for healthy people who might otherwise have to be covered by the exchanges under the ACA. The possible increase in availability of short-term plans and the repeal of the individual mandate penalty means that the pool of those participating in the ACA program is less likely to improve. Studies suggest that expanding such short-term policies as proposed would increase the number of people without minimum essential coverage by 2.5 million in 2019, but it also found that if the rules on short-term plans are loosened, 1.7 million of the people buying short term policies would otherwise have been uninsured.
Another proposed rule would let small employers and some individuals combine together with associations to get non-ACA-compliant "skinny" plans. The Obama Administration had allowed certain states to get "waivers" of ADA requirements, but the new proposals would expand those waivers.
The result in these developments is that there will be more variation in healthcare policy based on the particular state. For example, a state like California may have a healthcare policy resulting in more affordable premiums for costly medical conditions. In contrast, in a state like Texas, a sicker individual may do less well with premiums for costly medical conditions, but younger, healthier persons have the option of seeking less-comprehensive coverage that may cost far less.
Another development is the expansion of states that will accept the new and higher coverage under Medicaid for low-income individuals. In general, during the Obama Administration the federal government agreed to pick up most of these additional costs, but with the prospect of states absorbing the additional cost at some point in the future. Some 18 states never accepted the expansion of coverage, but there is a trend for more states to accept the expanded Medicaid coverage, together with some states seeking to add work requirements to be covered. The expansion of Medicaid is more expensive to the government, and results in fewer individuals selecting the private coverage offered by the employer or the state exchanges.
