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Health insurance changes under new Administration

As promised, Donald Trump wasted no time working towards dismantling the Affordable Care Act (ACA). In his first few hours as President, Trump signed an executive order, "Minimizing the economic burden of the Patient Protection and Affordable Care Act." Per the order, it charges departments and agencies associated with the enforcement of the ACA to ease the burden of the ACA as we transition to repeal and replace. While attempting to summarize expected changes is clearly premature, the following is a summary of the early ideas being floated in Washington.

First, the main concept of ACA is (was) viable: if you get everyone covered, the rate is less for everyone. While I understand a 25-year-old not wanting to buy a "required" health insurance plan, I also know that that same person would complain at age 60 about not being able to get a plan once diagnosed with a half million-dollar illness. Requiring the insurers to cover the sick people, while not having "fines" adequate to get the healthy people in the system is the biggest driver of these massive rate increases. You cannot buy auto insurance after you've had an accident. (My next article will include MY ideas on reform).

What we know now:

Nothing has really changed.

The executive order:

• Plans to "afford the States more flexibility to create a more free and open healthcare market";

• Agencies involved "shall exercise all authority and discretion available to them" to implement the Affordable Care Act, including potential penalties and fees.

• Opinion: This also means that such agencies could use their discretion to enforce the penalties and requirements of ACA, so I recommend continuing to comply.

What we anticipate:

• It appears that kids will still be able to stay on their parents plan until age 26.

• It also sounds like individuals with pre-existing conditions will still be able to get a plan. They may have to pay a higher premium than healthy individuals, but that remains to be seen.

• Have not heard anything on premium subsidies, but immediate cancellation of these subsidies would result in a large number of people dropping coverage, not a desired outcome of reform

• Currently, a business buying a group health plan for their employees gets to deduct the premiums on their taxes, and not tax the employees on the benefit. It has been proposed in Sen. Rand Paul's proposal that individuals get the same pre-tax treatment of their premium dollars.

• Health Savings Accounts also sound like they will be a big part of the future of healthcare. This would allow you to save money in a pretax account to pay for future claims. It has also been proposed that this become a tax credit.

• It also sounds like the future plans will not have all of the requirements that are part of ACA, such as maternity, birth control, and other high cost items that many individuals do not want or need. Choosing your health plan will be more like a buffet, selecting the benefits you really need.

Buying Coverage Across State Lines:

One idea President Trump has promoted is being able to buy coverage across state lines. I'm not really sure what he means by that, or what the benefit would be. If people in a high cost market such as LA buy their coverage in Fargo, N.D., then doesn't that eventually drive those rates up, thus ending with the same rates nationwide?

If, however he means that the laws will be consistent across the nation, then I am a fan. One of the problems I see in healthcare is that it is regulated at both the state and federal level. Before ACA, Colorado had great insurance laws. "Groups of one" (self-employed) was considered a group, and guaranteed issue. Those individuals that were uninsurable had a high-risk plan in Colorado that was within 10 percent of standard rates.

Alabama, on the other hand, had only one insurer. A company with 30 employees could be declined for a group plan if one employee was pregnant. If we make the regulations identical across state lines, that would be an improvement.

Opinion: If states with previously poor insurance laws would now have the "flexibility and control" to re-enact poor legislation, then this would be a step backwards.

We will keep you informed as changes become closer to reality. The bottom line for now is that nothing has changed.

Gary Glass and Leah Denzel own Rocky Mountain Benefits, LLC. You can content them at leah@rmben.com, 303-674-4773.