A Repeal of the Affordable Care Act Could Hurt Thousands

Posted February 22, 2017 by Eric Tiffany in Health Insurance

Even within the insurance industry, no one is quite certain what the future holds for the Affordable Care Act (ACA) nor the consequences of a potential repeal. In December of 2016, many individuals took the time to acquire health insurance through the state and federal health insurance exchanges. Nevertheless, a repeal of the Affordable Care Act could leave people without coverage or could drastically increase premiums.

Individual Health Insurance in 2017

According to the Kaiser Family Foundation’s report, advanced premium credits alone were issued to support 9.4 million individuals who purchased insurance through the health insurance exchanges, leading to over $32 billion in tax credits. Essentially, their insurance premium was subsidized by these tax credits, making healthcare more affordable overall. The fear for most individuals is that these tax credits are now going to go away. About 47,266 people in Minnesota alone took advantage of tax credits and will receive about $115.1 million.

Minnesota Independent Insurance Agents and Brokers

With the fear of the ACA being repealed, the MIIAB has made a decision to support the individual health insurance premium relief that started on January 1, 2017. This would provide individuals with a 25% premium rebate regardless if it was bought through MNsure or privately. The MIIA have recently reached out to legislative representatives to encourage them to help with issues regarding health insurance and are currently trying to find a permanent fix during the broken marketplace.

The Consequences of an ACA Repeal

It’s believed that the number of uninsured individuals in the country could go up by nearly 30 million if the ACA is repealed. Not only will this have consequences for individual households, but it will certainly affect the insurance industry, medical industry and the economy. The loss of coverage will be primarily due to the loss of the tax credits but also the loss of the Medicaid expansion.

In addition to tax credits, the Affordable Care Act made it necessary for insurance companies to insure those with pre-existing conditions. It is not yet known if those with pre-existing conditions will still be grandfathered into their insurance policies (provided they pay for the cost in full) or if they will be dropped from existing coverage. If dropped from existing coverage, the consequences could be dire for many households, as they may not be able to acquire coverage again. In Minnesota, it’s believed that there could be nearly 700,000 uninsured individuals by 2019, doubled from the 309,000 presently, according to Urban Institute estimates.

On the other hand, the ACA may not be repealed but could simply be changed. Health insurance rates are already varying substantially by region, so it’s unknown what these further changes could be.

The Medical Industry and the ACA

Hospital groups will be expected to lose revenue if the ACA is repealed, which could cause some hospitals and clinics to shut down or suffer cutbacks otherwise. These cutbacks would adversly impact the local economy and lead to many job losses. A lack of insurance will discourage many Americans from pursuing regular healthcare — especially preventative healthcare. Medical institutes may also see an increase in collections activity if individuals are not prepared to pay for the healthcare costs that they nevertheless need. On the other hand, the industry was already projecting a shortfall due to plans that the ACA intended to initiate in 2017 and 2018, so it may not be as substantial as it would be otherwise.

For an individual or a household, the Affordable Care Act repeal could have significant consequences on budgeting, especially for those who have substantial medical costs or existing conditions. Unfortunately, there is no way yet of knowing what will occur. At Hal Tiffany Agency Inc., we are dedicated to serving our clients regardless of the current insurance issues. Follow us for more information as the situation unfolds.