Last week President Trump signed an executive order on health care, to cause momentum to change with the Affordable Care Act. Taking this action increases healthcare choices for millions of Americans. Having alternatives to Obamacare plans will help make things more affordable. How does that impact you? Let's review the changes.
- The order directs the Secretary of labor to consider to expand access to Association Health Plans (AHPs), which could allow employers to join forces across state lines.
- Expanding coverage through low-cost, short-term health insurance plan beyond the 91-day restriction they have now.
- Allow Health Reimbursement Arrangements (HRAs) to be used as a tax-free vehicle for healthcare expenses including deductibles and copayments. This will also include reimbursement for health insurance premiums for non-group coverage.
- The Trump administration will cut-off $ 7 billion in cost-sharing reduction payments to the insurance companies this year.
Note: The cost-sharing reduction is for out of pocket expenses, not the monthly premiums. Those who qualify for the monthly premium subsidy that will remain intact.
It is entirely possible that this could alter the direction of the Affordable Care Act. Many are seeing massive increases and more out-of-pocket. They are looking for alternatives, but they are drying up.
Many younger folks need lower cost health insurance for longer than 90 days, the current limit for the short-term medical plans. They cannot afford the premiums on the Exchange (or directly through a participating carrier). Many of them do not qualify for a tax credit due to the income being just high enough, even at $ 25,000 a year, to be eligible for any assistance from the government.
Others work for an employer willing to help but are not in a position to offer group health insurance for some reason. With some of the help from the employer, it will make it more affordable for their employees and create company loyalty. This is good as employers are competing for good talent.
The cost-sharing reduction subsidy is a political debate whether or not it was constitutional or not for President Obama to sign it in as an executive order after the Affordable Care Act was passed. Either way, you believe it, this subsidy was using taxpayer dollars that couldn't be tracked by the IRS. Even with an IRS audit. It was in place for three years, and no one has made any attempts to reconcile it if someone was off on their income for the cost-sharing credit.
In the end, we are all working to making access to health care coverage easier and making it more affordable. The Affordable Care Act started to address it but did not finish. One can hope that what follows after this executive order will help move closer to that goal.