Trump Undercuts ACA with New Plan Options

David Posnett — Thu, 19 Oct 2017 18:12:36 +0000

Author Shannon Muchmore @stmuchmore

Published Oct. 12, 2017

Dive Brief:

President Donald Trump signed an executive order Thursday that rolls back a number of Affordable Care Act (ACA) provisions that set minimum requirements for health plans.
The order will allow small businesses and groups of people to band together and buy insurance as an association. The association health plans (AHP) available to them do not have to meet the requirements of the ACA, such as protection for people with pre-existing conditions and essential health benefits.
In addition, the order expands the use of short-term plans that also have looser requirements and allows plans to be sold across state lines.

Dive Insight:

Broadly, the executive order loosens the requirements health plans must meet and shifts regulation away from federal levels. This could lower out-of-pocket costs for people who don’t use much care, but would likely result in major cost increases for people with pre-existing conditions.

The biggest concern with offering these plans is that it would lead payers to cherry pick young, healthy people who are less expensive for payers. But separating them from people who will need services creates an unbalanced risk pool. That can quickly lead to prohibitive out-of-pocket costs for people who have a pre-existing condition or who unexpectedly need high-cost care.

There are still several steps to be taken before the order could have a real impact. HHS and the Department of Labor have been instructed to write new regulations which will go through the regular notice and comment process. The specifics of those regulations will be important to how the order ultimately plays out. Also, the order will almost certainly see a legal challenge. Still, it signals that Trump’s White House is ready to find ways of undercutting the ACA despite the high-profile legislative failures earlier this year.

It’s far from the first sign, though. HHS has drastically cut back efforts to promote this year’s open enrollment period, which begins Nov. 1. The ACA’s overall advertising budget was slashed by 90%, community groups that receive federal funding to help people enroll have been devastated by cuts and HHS recently barred regional directors from participating in enrollment events.

Short-term plans are inexpensive for people who are healthy, but they can exclude people with pre-existing conditions. They have previously been allowed for a limited stretch, such as three months, but extending that time and allowing these plans to count toward the individual mandate will mean an unstable risk pool.

Allowing plans to be sold across state lines is a staple of conservative health policy, but there is little reason to believe it would actually lower costs. There are also many unanswered questions about how these plans would be relegated.

Short Hospital Stocks!

David Posnett — Tue, 10 Oct 2017 16:36:14 +0000

I have been waiting for this: Wall street is jittery about Hospital stocks. Here is why:

(1) Investors are approaching hospital stocks cautiously

As Les Masterson has said:

“Some unfavorable financial trends and an air of uncertainty for healthcare’s future has led to an environment not particularly friendly for major investment…as hospitals continue to struggle with fewer inpatient admissions, lower reimbursements and potential increases in uncompensated care, investors are growing wary”

“The current environment caused disappointing second quarters and lower earnings projections for major for-profit systems like HCA, Community Health Systems (CHS) and Tenet Healthcare…. The results led stock prices to tumble.”

(2) Hospital Sector Slides:

The Financial Times notes that US hospital operators‘ stock prices are sliding down following a report that President Donald Trump will sign an executive order this week to withdraw some insurance requirements laid out under Obamacare. Tenet Healthcare, Community Health Systems, Surgery Partners, HCA Healthcare, DaVita shares tumbled losing up to 10% in stock prices.

(3) some are suggesting “Checking in on the Canadian Healthcare Stocks“ Ha!