The following article by Emily Gee and Aditya Krishnaswamy was posted on the Center for American Progress website July 24, 2018:
This column contains a correction.
Over the past two years, the Trump administration has worked tirelessly to sabotage the Affordable Care Act (ACA). The U.S. Congress’ repeal of the individual mandate penalty and the Trump administration’s actions to expand the availability of skimpy short-term plans are raising premiums for middle-class families. In its latest attack on the individual market for health insurance, the Trump administration also slashed funding for enrollment assistance by 72 percent and halted payments for risk adjustment, the federal program that discourages plans from avoiding sicker enrollees.
Last year, President Donald Trump’s decision to end cost-sharing assistance payments resulted in staggering increases in 2018 marketplace premiums, and these more recent attempts to destabilize the individual market will result in even higher rates for 2019. Although tax credits rise with premiums and therefore insulate lower-income individuals from higher costs, many middle-income families who buy insurance on their own will see 2019 premiums thousands of dollars higher than they would be if the Trump administration allowed the ACA to work as intended. Based on rate information to date, the Center for American Progress estimates that an unsubsidized 40-year-old will pay an extra $970 in marketplace premiums on average in 2019 because of the end of the mandate and the expansion of short-term plans.
Mandate repeal and short-term plans are driving up premiums
The individual mandate was one of the ACA’s mechanisms for keeping premiums low by stabilizing the insurance risk pool. Congressional Republicans’ tax bill—backed by the Trump administration—effectively eliminated the individual mandate starting in 2019. As a result, experts predict that young, healthy enrollees will tend to forgo health insurance, which leads to a sicker individual market risk pool and higher premiums for remaining enrollees. The nonpartisan Congressional Budget Office (CBO) has projected that mandate repeal will drive insurers to raise rates an additional 10 percent. What’s more, the Trump administration has made regulatory changes to widen the availability of short-term plans that offer substandard coverage, harming the ACA risk pool and raising rates for comprehensive coverage.