The House GOP may have abandoned its attempt to replace the Affordable Care Act (for now), but the market for individuals and small employers to purchase health insurance remains deeply dysfunctional and in urgent need of reform. By rolling back a recently-issued insurance regulation and waiving some of the ACA’s penalties, the Trump administration can shift the bulk of the insurance market onto a well-functioning track while better-targeting subsidies at those in the greatest need.
Insurers have struggled to finance their obligations under the ACA. As a result, networks have narrowed, premiums have soared an average of 75 percent, and annual deductibles above $12,000 are now common for family plans. Four of the five largest insurers have sharply cut back on their exchange participation, and there are currently only 12 million enrollees — 11 million fewer than were initially estimated for 2017.
President Trump has promised to reverse the increase in healthcare premiums and reduce the number of Americans uninsured without adding to the deficit. In order to do this, it is necessary to increase the efficiency of health insurance markets and to better target the ACA’s subsidies at individuals who are unable to afford their expected costs of care.
Although the congressional GOP was prevented by budget reconciliation rules from improving insurance regulations....
Christopher Pope is a senior fellow at the Manhattan Institute.
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