The big rating agencies helped determine how much Donald Trump had to pay to borrow money when he developed real estate projects, and now they may play a role in shaping his efforts to kill and replace the Affordable Care Act.
Analysts at the agencies say some approaches to changing or replacing the ACA could be much easier on health insurers than others.
Sudden, complete repeal could slam the health insurers that have been selling large amounts of individual major medical coverage through the ACA exchange system, but a slower, carefully planned replacement effort could help lure the issuers hurt by the ACA in recent years back into the market, the analysts say.
Deep Banerjee and colleagues at New York City-based Standard & Poor’s Financial Services say they think full, sudden ACA repeal would have a much bigger effect on commercial individual health operations than on commercial group health operations.
If, for example, Republicans succeeded at eliminating the ACA exchange plan tax credit subsidy system without replacing it, that “will reduce the affordability of health care plans and result in a significant decline in the number of individually insured [people],” the S&P analysts say.
If Republicans required health insurers to continue to sell health coverage without medical underwriting, but they eliminated the ACA provision that imposes a tax penalty on many people lack what the government classifies as adequate health coverage, that could increase individual health claims and individual health premiums, by encouraging healthier people to drop their individual major medical coverage, the analysts say.
“The mandate in its current form wasn’t as effective as it needed to be, both in terms of the actual penalty and enforcement,” the analysts say.
But having even the current, weak mandate in place is better for premiums than having no mandate at all, the analysts say.
The S&P analysts say any major ACA changes that do occur are much more likely to take effect in 2018 than in 2017.
Easing the pain
Mark Rouck, an analyst in the New York office of Fitch Ratings, says Republicans could still shape any ACA replacement package in a way that would ease the pain for individual health issuers.