Search

The Affordable Care Act changed the regulations governing small firms' health insurance premiums. However, small businesses can avoid many of the new regulations by self-insuring or maintaining grandfathered plans. If small firms with healthy and lower-cost enrollees avoid the regulations, premiums for coverage sold through insurance exchanges could be unaffordable. In this analysis we used the RAND Comprehensive Assessment of Reform Efforts microsimulation model to predict the effects of self-insurance and grandfathering exemptions on coverage and premiums available through the exchanges. We estimate that Affordable Care Act regulations restricting employers' ability to offer grandfathered plans will result in lower premiums on plans available through the exchanges and will have small negative effects on enrollment in the exchanges. Our results suggest that these regulations are essential to keeping premiums on the Small Business Health Options Program (SHOP) exchanges affordable. Our analysis also found that Affordable Care Act regulations limiting self-insurance will reduce enrollment in the exchanges somewhat, without substantially affecting exchange premiums. [ABSTRACT FROM AUTHOR]

As implementation of the Affordable Care Act reshapes the US health insurance market, state policy makers should be prepared to revisit regulation of stop-loss coverage--a form of reinsurance--for small businesses. Aspects of the reform law could motivate small businesses to self-insure, rather than participate in state-regulated markets either inside or outside the new health insurance exchanges. If younger or healthier groups self-insure, premiums for insured plans might rise to an extent that could seriously impair the regulated market. States can influence small businesses to participate in the regulated market by making it more difficult or costly to obtain stop-loss coverage, which self-funded employers rely on to protect their businesses from catastrophic medical costs incurred by one or more insured workers. States can limit the comprehensiveness of stop-loss coverage, ban stop-loss coverage outright, or regulate it as they do primary coverage. But states need federal guidance about how to exercise this authority if they are to promote, or prevent the undermining of, important aspects of federal health care reform. [ABSTRACT FROM AUTHOR]

The article provides an update on the ruling from the Fifth Circuit Court of Appeals on the status of the Affordable Care Act as of October 2019. Topics covered include reports issued by the U.S. Department of Health and Human Services on the risk adjustment program, a decline in individual-market enrollment among unsubsidized consumers since 2016, and the estimated number of people in 50 states and the District of Columbia that affectuated their 2019 Marketplace coverage as of February 2019.