The Trump Administration has underestimated the impact short-term limited duration insurance plans would have on the Affordable Care Act market, according to a study commissioned by the Association for Community Affiliated Plans.
While the White House projected that its short-term plans would decrease enrollment in Healthcare.gov by 100,000 to 200,000 ACA consumers in 2019, the ACAP research found that it would be The four times greater.
Wakely Consulting Group, which conducted the research for the ACAP not-for-profit that serves safety net health plans, estimates enrollment for 2019 would drop by between 396,000 and 791,000 consumers.
The study authors said the difference is due to the fact that the government failed to account for the five million people who purchase ACA-compliant plans off the exchange, such as directly from plans or brokers.
The Department of Health and Human Services proposed the rule to expand the availability of short-term, limited-duration health insurance, allowing consumers to buy plans providing coverage for just short of a year, rather than the current maximum period of less than three months.
Comments on the rule are being accepted through April 23.
The rule creates a class of plans that do not have to comply with ACA requirements for essential benefits and coverage of pre-existing conditions.
Earlier this week, the Centers for Medicare and Medicaid Services issued other rules giving states more flexibility in plan design.
Both are intended to drive down the price of premiums and to offer consumers in the individual market more choice than what is available through the ACA.
Opponents argue that federal efforts will further destabilize the ACA market. Insurers have already lost the cost-sharing reduction payments they passed on to qualifying consumers to help with deductibles and out-of-pocket expenses.
The recent GOP tax bill ended the individual mandate to buy insurance.
Decreases in ACA enrollment are driven by both the elimination of the individual mandate penalty in the December 2017 tax cut legislation and the recent HHS proposal to extend the time period for short-term limited duration plans, the study said.
As insurance companies market these short-term plans more broadly, Wakely predicts the regulation could ultimately lead up to 1.9 million relatively healthy people abandoning ACA-compliant coverage -- leaving only the sickest consumers paying high premiums to cover rising claim costs through plans offered on the exchange.
"You have a policy and a lower premium, but your coverage is far less meaningful," ACAP CEO Margaret Murray said.
Wakely estimates that the impact of short-term plans will increase premiums by as much as 12.8 percent and decrease enrollment by as much as 26.3 percent.