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Life Health > Health Insurance > Health Insurance

3 Ways the Health Policy Dice Could Roll Next

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Health policy watchers who appeared at a conference in New York on Wednesday seemed to be even more uncertain about the future than they were back in January, when the Trump administration was starting to sketch out its plans for replacing the Affordable Care Act.

But panelists did make some cautious guesses about what could, possibly happen in Washington in the next few months at the event, which was organized by Standard & Poor’s Global Ratings.

(Related: Big Health Insurers Still Look Solid: S&P Analysts)

The S&P panelists’ views could have some extra importance, because S&P ratings affect companies’ and government agencies’ access to capital, and S&P aimed the conference at representatives from mutual funds, reinsurers and other organizations involved with supplying capital for U.S. insurers, U.S. hospitals, and other organizations involved in the U.S. health care system.

Here’s a look at three ideas about the near future in health policymaking that came out of the conference.

1. Congress will, somehow, keep the Children’s Health Insurance Program alive.

Congress let CHIP authorization expire Saturday.

Ipsita Smolinski, managing director at Capitol Street, said it seems likely that Congress will find some way to renew CHIP authorization.

“Members of Congress would get quite a bit of flak for not extending health insurance for kids,” Smolinski said.

Smolinski also said she expects to see Congress move away, at least temporarily, from debating ambitious “repeal and replace” strategies for dealing with the Affordable Care Act.

“I think we have this pivot toward stabilization” of existing ACA programs, Smolinski said.

2. If the Affordable Care Act stays in place, states will continue to try to modify their versions of it.

Deep Banerjee, S&P’s director for health insurance, managed care and financial services ratings, said the provision in the Affordable Care Act that lets states waive some ACA rules and implement the ACA in their own way is a central part of the ACA.

Capitol (Photo: Thinkstock)

(Photo: Thinkstock)

If Congress lets the ACA stay in place, “the future would be more waivers,” Banerjee predicted.

3. Trump administration efforts to administer the ACA in an unenthusiastic way may have smaller-than-expected effects.

Two of the possible “ACA crippler’ strategies discussed at the S&P conference are a provision that would all health insurers sell health coverage across state lines, and a decision to refrain from enforcing the ACA provision that requires many individuals to own health coverage or else pay a penalty.

Suspending enforcement of the ACA individual “mandate” may have a relatively modest impact, because the mandate is already so weak that it’s not clear how much effect it really has today, Banerjee and Smolinski said.

In theory, allowing interstate health insurance sales could help people in high-red-tape states get cheaper coverage from insurers in low-red-tape states, but, in the real world, an insurer trying to sell coverage outside its home state needs to have network contracts with doctors and hospitals in the out-of-state customers’ markets, and it needs to adjust the premiums to reflect the actual cost of care in the out-of-state customers’ markets, Banerjee said.

The problems with developing multi-state provider networks and premium structures make multi-state coverage sales more difficult than many supporters of allowing interstate coverage sales realize, Banerjee said. 

— Read S&P Sees ACA Risk Corridors Program Funding Gap on ThinkAdvisor.

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