While much is still uncertain about what President-elect Donald Trump and congressional Republicans have in store for the Affordable Care Act, it's clear that health insurers will have to adapt.
Trump campaigned on the promise of a full repeal of the ACA, yet also has said he wants to keep two of the more popular—and costly—provisions of the law. In addition, the president-elect’s recently updated healthcare plan promises to “modernize” Medicare and give more states flexibility to administer Medicaid in innovative ways.
For health insurers, all these changes will mean disruption and volatility, but there are also opportunities. Here’s an idea of what payers can expect and what they can do to prepare, according to consulting firm Oliver Wyman Health:
No more exchanges. If the individual mandate is repealed, individual underwriting will return and state high-risk pools are likely to emerge. To adjust, all insurers must re-evaluate the investments they made to survive in the ACA environment and instead “dust off pre-ACA levers to increase profitability,” according to Oliver Wyman. For payers that did well on the exchanges, the firm suggests they scale back their operations in that segment.
New and old market forces. The report predicts that there may be a resurgence of limited-benefit plans if the exchanges collapse. But it also notes that the push for value is alive and well given the Medicare Access and Chip Reauthorization Act and employers’ affinity for tiered and narrow networks. For those payers that choose to sell insurance across state lines, they must prepare for the challenge of creating provider networks and building a large enough risk pool.
Medicare and Medicaid changes. If Republicans move Medicare to a premium-support model, Medicare Advantage plans will have to get more efficient and cost-effective, the report says. Planned Medicaid changes—including shifting funding to block grants—will reverberate more slowly in the industry, but could eventually lead to a reduction in benefits tied to budget concerns.