Don’t bet big on health law changes just yet
Why worry about buying health insurance when President-elect Donald Trump plans to dump the requirement that most Americans get coverage?
For the same reason you should always worry about health insurance: Little health problems easily can turn into big bills without it.
“The real risk is something will happen to you, and you won’t be able to get care or (you) go broke trying to pay for it,” said Karen Pollitz, a senior fellow at the nonprofit Kaiser Family Foundation. Pollitz recalls the time she saw the bill for surgery her son needed after breaking his wrist skateboarding: It would have cost $21,000 if insurance hadn’t covered most of it.
The threat of financial disaster, not the Affordable Care Act’s hazy future, should shape any decision to buy coverage for next year, health experts say.
Here’s what we know about the ACA’s future as the annual open enrollment window for individual insurance winds down. Shoppers have until Dec. 15 to buy coverage that starts Jan. 1. Anyone who misses that deadline can still enroll by Jan. 31 to have coverage for the rest of the year and avoid a penalty for remaining uninsured.
No changes are expected next year for the more than 10 million people covered through HealthCare.gov and state markets that offer subsidized private insurance. A similar number of low-income people covered by Medicaid in states that expanded the program also are safe, for now.
Trump has said he’d like to sign legislation repealing the law soon after his Jan. 20 inauguration, but that’s unlikely. It probably will take months for Congress to act. Republicans, who will control Congress, also have discussed giving the law’s beneficiaries a transition period of a year or more as they phase out the law and introduce what they say will be a replacement.
No. The 2017 prices were set months ago, they have been approved by regulators, and they are being used in the market.
Customers can hunt for cheaper coverage on or off the ACA’s public exchanges before the end of open enrollment.
There are other cheaper alternatives, but they come with a catch. Raleigh, N.C., broker Liz Gallops has been talking to some clients about short-term coverage that generally costs less — and covers less — than plans sold on the ACA’s exchanges. These plans leave customers exposed to a fine for remaining uninsured, but they offer some protection from the hit of a big medical expense, which is the big worry.
People who remain uninsured next year could face a penalty of $695 per adult or more, depending on household income. But they wouldn’t have to pay that fine until after filing income taxes in early 2018. Trump has said he wants to dump this unpopular element of the law, so it may not exist by then. Still, there’s no guarantee. Gallops doesn’t bother with speculation. She thinks the safest bet for customers is to simply “play by the rules that we have today.”
At the dawn of 2016, the dwindling of China’s massive hoard of foreign reserves sparked turmoil on global financial markets. Now, signs of accelerating capital outflows inspire little more than a yawn.
Figures published Wednesday showed the value of the People’s Bank of China’s foreign exchange reserves fell by $69.1 billion to $3.05 trillion in November, the largest drop since January. S&P 500 futures, however, showed no immediate reaction and benchmark U.S. indexes then rallied to alltime highs, a stark contrast to 10 months prior, when a similar drawdown was cited as the proximate cause of carnage in global equities.
One difference now is that China’s capital account hadn’t been as leaky ahead of November’s large decline; market participants had seen far rainier days from mid 2015 until early this year. Outflows averaged about $60 billion from February through October, roughly half of the amount from the prior six months, observed George Pearkes, Bespoke Investment Group’s macro strategist.
“Tweleve months forward prices have included lots of risk premium to make up for spot declines, softening the blow for the market,” he writes. “Implied volatility also trades at a huge premium to realized volatility for CNH, and when (volume) ramps up, option sellers are already compensated against more violent price action.”
In other words, as traders have priced in a more volatile and weaker yuan relative to the U.S. dollar via the forward and derivatives markets, this also raises the bar for roiling the market through any surprise uptick in outflows.
David Woo, global head of rates and currencies research at Bank of America Merrill Lynch, said that the biggest difference is that China has shown its willingness to use tools to control any fallout.
Policymakers now are more willing to use levers at their disposal in an attempt to crack down on capital outflows, such as making it more difficult for residents to buy insurance policies in Hong Kong. There’s some proof they’ve been successful: the sale of actress Cate Blanchett’s Sydney home fell through when the Chinese buyer was unable to get enough money out of the country to settle the deal.