The chaotic regulatory environment of the past year was top of mind for insurance and healthcare officials and experts who follow the space at a major industry group's policy conference in early March.
"I feel dizzy," one conference-goer said with a sigh. "I just feel like we've just been hammered with uncertainty."
One theme emerged from the three-day conference: that the three-pronged health insurance executive order President Donald Trump released in October 2017 may lead to a "parallel market" alongside the Affordable Care Act.
Stakeholders at the National Health Policy Conference, hosted in Washington, D.C., by America's Health Insurance Plans, or AHIP, debated how to repair or improve the market for individual insurance, which has seen premiums skyrocket and insurers abandon state marketplaces. AHIP's members include most of the publicly traded managed care insurers, in addition to other companies in the healthcare space.
A so-called parallel market could develop if the universal protections of the ACA were weakened and plans that do not fully adhere to the law's rules were approved by regulators, panelists and others at the conference said.
In February, the Department of Health and Human Services proposed a rule expanding the amount of time short-term health plans could last, from a three-month period to up to 12 months. Short-term plans, which do not offer the same level of benefits as ACA-compliant plans but are cheaper, were limited in duration to discourage consumers from jumping from ACA markets to short-term plans.
AHIP Chief Medical Officer Richard Bankowitz said the uncertainty caused by the executive orders as well as other actions the White House has taken have "splintered" the individual market.
"I think that's the risk," Bankowitz said in an interview. "What the ACA succeeded in doing was creating one risk pool and supplying essential benefits to everyone who participated."
Bankowitz said a dual market could siphon off healthy, low-risk consumers that do not file claims often into its nseparate risk pool, leaving the ACA market with higher-risk consumers that need and use the full range of benefits the health law requires. The health law brought together patients who file more claims with healthier, less-costly patients into a single risk pool.
Matthew Fiedler, a health policy-focused fellow at the Brookings Institution made similar statements at a separate event the same week.
While the ACA's individual market will "survive and find [a] new equilibrium," with consumers still interested in the comprehensive set of benefits ACA-compliant plans offer, those cheaper, alternative options the White House and others tout may create a divided health insurance market, Fiedler said.
"At a high level, I think it means fewer people covered, particularly adjusted for quality. We're likely to have less pooling of risk between healthier and sicker people," he explained.
But James Capretta, a resident fellow at the conservative American Enterprise Institute, supported the president's executive order as a way to give back to the states the power to regulate health insurance.
"Maybe it's not the worst thing in the world to allow states to try what they want to do here. That also includes changes to the individual mandate: If states want to re-impose it, they can do so," Capretta said. "But ACA plans-or-nothing is probably not the best thing here either."
The same week as the conference, Centers for Medicare and Medicaid Services Administrator Seema Verma rejected Idaho's proposal to offer its so-called state-based plans but suggested that the plans be reworked into short-term plans to be sold in the market.
HHS Secretary Alex Azar told reporters he would support legislation that allows short-term plans to be annually renewed. Currently, a consumer cannot annually renew a short-term plan on the same policy.
Azar said his department would accept any form of renewability the law allows, either through new legislation or a re-examining of existing statutes. "If Congress decides as part of their consideration of reforms in this space to make it clear we have that ability, we would welcome that also," he said.
