Since the Trump administration signed off on rules to ease the regulation of short-term and so-called association health plans, states have launched legislative and legal fights against them.
Both types of health plan were restricted under the Obama administration. They are controversial because while they offer consumers a lower-cost option for health care, they aren’t required to fully comply with the Affordable Care Act (ACA). They can reject people with preexisting conditions and refuse to cover benefits like maternity care, mental health and hospitalization. Critics of short-term plans refer to them as "junk insurance."
Twelve state attorneys general have sued the Trump administration over association health plans, citing concern over past abuses from their insurers.
"Health insurance markets for individuals and small businesses were much more prone to abuse, including discrimination in pricing and benefits ... prior to the ACA’s enactment,” the AGs wrote in their suit, noting that the American Cancer Association and the American Heart Association have raised concerns about the rule.
Meanwhile, some states are seeking to prevent or limit short-term plans.
The Connecticut Department of Insurance determined last week that its state laws prohibit short-term plans. Hawaii and Maryland recently passed laws that severely limit their use, and Washington state's insurance commissioner is reportedly in the process of rewriting rules to do the same. California's legislature is considering an outright ban.
Association health plans are sold through trade organizations or industry groups that aren’t subject to the same regulations as health insurance companies, while short-term health plans are expected to be sold on the ACA marketplace this fall.
This all comes at a time when ACA premiums have been on the rise, in part because of moves by the Trump administration. But critics of short-term and association plans worry that if too many people sign up for them, ACA premiums could rise further.
"The more healthy people drop out and go to skimpier coverage, the more [other ACA] plans become unaffordable," says Dania Palanker, assistant research professor for the Center on Health Insurance Reforms at Georgetown University.
Health policy experts seem to agree that both short-term plans and association health plans will add a bit of instability to the ACA marketplace -- but the question is how much.
"Will they draw significant numbers of healthy people out of the [ACA] pool? We'll see," says Trish Riley, executive director of the National Academy for State Health Policy.
But while advocates of these controversial plans tout their lower premiums, some reports indicate that ACA premiums are already starting to stabilize in more than a dozen states.
The Wall Street Journal reported earlier this month that six states -- Arizona, North Carolina, Texas, Illinois, Iowa and Wyoming -- will likely see a decline in premiums. And the Kaiser Family Foundation found that insurers in eight other states -- Connecticut, Colorado, Georgia, Indiana, Minnesota, Pennsylvania, Tennessee and Virginia -- are also planning on decreasing premiums in at least one of their plans this fall. Premiums are expected to be finalized in the next couple of months.
"The federal government is a bit unpredictable, but for what we’ve seen with preliminary filings, there looks like we’ll see some stability for 2019," says Riley.
Blue Cross and Blue Shield of North Carolina, for example, announced that rates throughout the state would decrease by 4 percent this year. If the Trump administration had made fewer changes to the marketplace last year, premiums would have likely decreased by 15 percent or more, according to North Carolina Health News.
In addition to introducing the idea of loosening short-term and association health plan regulations, the Trump administration last year also briefly ended some payments to insurers that were meant to help offset the costs of subsidies, drastically cut outreach funding for the ACA and shortened the ACA enrollment period. Congress, meanwhile, repealed the individual mandate, which required every American to have health insurance.
Experts say the marketplace may see more stabilization this year because insurance companies already accounted for a lot of those changes in their 2018 rates.
"There were probably a lot of inaccuracies with how they priced silver plans versus bronze plans, and some may have raised rates more than they needed to because of the uncertainty," says Palanker. "We also already saw the price effect of the loss of the individual mandate, with insurers already expecting it to get rolled back or just not enforced last year."
But even in states where premiums could plateau or decrease, they will still be expensive for the people who don't qualify for ACA subsidies, which is about 15 percent of marketplace users. For example, in Pennsylvania, the cost of the most popular silver plans are expected to drop 20 percent -- from $636 to $484 a month.
The Trump administration is, however, helping a handful of states at least temporarily lower ACA premiums through the use of reinsurance programs.
But Palanker warns that the short-term and association health plans could have a domino effect in the years to come: "Looking at 2020 and beyond," she says, "there could be more instability."