Will Trump Era Mean Disaster For Health Insurers?

Wednesday, December 7, 2016

One of the biggest campaign promises made by President-elect Donald Trump was the dismantling and replacing of Obamacare (officially known as the Affordable Care Act, or ACA), the signature legislation passed through Congress and enacted during President Obama’s two terms in office. Health insurance companies provided a major overhaul of their business plans to comply, and now they look to be put on a new road forward.

So yesterday, in lieu of an actual replacement policy being made public as of yet, healthcare insurance companies have put forward a list of ACA benefits they do not want to see removed, if/when Obamacare is officially taken apart. First is a commitment to offset some healthcare costs for low-income Americans. They also consider young people signing up for health insurance is crucial to keeping costs low for the companies.

Already tough sledding for insurers to provide appropriate care for its customers, without these provisions made by the incoming administration — and Trump and his team have been mum on this issue to this point — insurers will be abandoning the system en masse, and complete failure of the ACA would eventually amount to more than 22 million Americans currently insured for healthcare thrown out into the cold.

Healthcare insurers — including the Zacks Rank #2 (Buy) Humana (NYSE:HUM) , The Joint Corp (NASDAQ:JYNT) and WellCare (NYSE:WCG) — do not want this to happen. But America’s Health Insurance Plans, a leading industry trade group, and presumably the Blue Cross Blue Shield Association, which has not yet issued a public statement on this matter, are concerned about dire consequences in the industry should the ACA be removed without a suitable replacement. At very least, the organizations would like three years to re-set the table for their businesses and their shareholders.

With tens of millions of new customers on the rolls, health insurers are in no mood to go back to the way things were. Yet what course the new law — assuming there is one — takes going forward will have major consequences on the $4.2 trillion Health Care industry.

Mark Vickery
Senior Editor

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