2024 Election: Impact on Insurance
By Michael Giusti
Many crucial topics are certain to dominate this year’s presidential election news cycle, but one potentially overlooked area voters would do well to consider is the weight their ballot might have when it comes to insurance.
From Medicare insolvency to Medicaid expansion, from the future of the Affordable Care Act to the impact of the Dobbs Decision, and even from homeowner’s insurance to flood insurance, many issues could reverberate depending on how voters mark their ballot.
None of these issues will be directly on the ballot, but the officeholders whom voters choose will be making decisions in these areas that could have implications for years, and even decades to come.
The marquee race is obviously at the top of the ticket, between incumbent president Joe Biden and former president Donald Trump. But looking down ballot makes a lot of sense in the area of insurance, because state legislators and governors will have major decisions to make, as will Congress, and in a few states, even the insurance commissioner is on the ballot.
This 2024 Election and Insurance Guide aims to lay out many of those issues and how the election might impact them.
Health Insurance
At first blush, the Affordable Care Act may not seem to be an obvious place to look in terms of how the election will impact insurance. It is established law, after all, and it is broadly popular. But there are issues coming up that lawmakers will have to decide in the next term.
Even if the Affordable Care Act isn’t on the ballot itself, health costs do seem to be a top priority for many voters. In a recent poll, 48% of voters told the healthcare nonprofit KFF that lowering out-of-pocket costs is among their top priorities for the country to address.
At the same time, 59% of Americans view the ACA favorably, compared with just 39% who view it unfavorably. That is reflected in enrollments. During 2024 open enrollment, a record 21 million people enrolled for an ACA Marketplace Plan.
Even as popular as the Affordable Care Act seems to be, Trump has said recently that he will come up with a “better healthcare” option than the ACA, but has not laid out an official policy statement detailing those plans. For their part, GOP policymakers don’t seem to be lining up behind him for that repeal and replace effort.
As president, Biden has upped spending on Affordable Care Act outreach programs to encourage people to sign up for Marketplace Plans, and he signed into law increased subsidies to bring premium costs down for many families. Biden also signed the Inflation Reduction Act, which capped insulin prices for Medicare recipients at $35 per month, and he began the process for Medicare negotiating prices of some prescription drugs with the manufacturers.
At the federal level, the biggest decision regarding the fate of the Affordable Care Act this election cycle will be those premium subsidies. When Biden introduced them, they had a sunset date of 2025, meaning whoever wins in November will be faced with the decision of whether to let them expire or to extend them.
At the state level, the biggest Affordable Care Act decision is in Medicaid expansion. To date, 40 states and DC have expanded Medicaid Coverage in line with the Affordable Care Act. On the other hand, 10 states have declined Medicaid expansion, including Florida, Georgia, Kansas, Mississippi, South Carolina, Wisconsin, and Wyoming.
Kansas’s Democrat governor has put expansion in the 2025 state budget for legislative consideration, though she has done this before only to face pushback from the Republican state legislature. Likewise, Wisconsin’s Democrat governor put expansion in a previous budget allocation but was thwarted by the state’s Republican-controlled legislature.
Some of the other states have been working on limited expansions of Medicaid and seeking waivers from CMS — some of which include work requirements, but none of those proposals would fully qualify as Medicaid expansions without a federal waiver.
Looking ahead, Florida is considering a 2025 ballot initiative to expand Medicaid, but no states to date have put an expansion initiative on a 2024 ballot.
Medicare Insolvency
If nothing is done in the area of Medicare funding or spending, current projections put the Medicare Hospital Insurance Trust Fund on track to insolvency in 2031.
Medicare has many funding sources. Medicare Part A – the hospital portion – is funded primarily by the FICA portion of payroll taxes paid by both the employee and the employer. In years where payroll tax revenues exceed expenses, the surplus is put into the Hospital Insurance Trust Fund to be drawn on in lean years.
Many factors weigh in on the health of that trust fund including economic expansion, the rate seniors retire, the number of new workers joining the economy, and health care costs overall.
The fact that current projections show the fund drying up in seven years doesn’t necessarily mean Medicare will cease to operate. But it does mean the next few years will be decision time to prevent the fund from running out of cash.
Some of the current fixes on the table being discussed range from increasing the payroll tax on high earners, raising the retirement age from 65 to 70, or even reducing benefits for some procedures and treatments. It is also conceivable that Congress does nothing, lets the fund run out of money, and then covers the shortfall out of general funds from the Federal budget.
Other parts of Medicare – Parts B and D – are supplemented by general funds from the federal budget. However, there are no mechanisms currently in place to have the general fund backstop the hospital trust fund, so even that inaction would require an act of Congress.
It is also conceivable that Congress could cut Medicare benefits so they are in line with payroll tax revenues.
Again, though, there is no current plan for how to move forward, but it is almost certain that the presidential and congressional winners in November will be confronted with these Medicare issues during their next terms.
Abortion and Birth Control
After the Supreme Court issued its Dobbs v. Jackson Women’s Health decision striking down a constitutional right to an abortion, many areas of previously settled healthcare law are now questions that might be settled at the ballot box.
So far, 27 states have passed some limitations on abortion access ranging from bans in almost all circumstances to limitations on how late into the pregnancy a woman may access abortion.
An Alabama State Supreme Court case following the Dobbs case put the future of invitro fertilization in question after the court extended personhood rights to fetuses. Many states have since scrambled to write in specific protections protecting parents and doctors and allowing for IVF.
Some advocates worry that the restrictions on abortion could extend into eventual restrictions on some methods of birth control, though no current proposals have gained traction. Some lawmakers have introduced federal protections on birth control, but those proposals didn’t move forward in the divided Congress either.
The insurance angle here is a question of what is and is not covered by insurance. Thanks to the federal Hyde Amendment, Medicaid has never covered abortions with federal dollars. Private employer-sponsored plans often do cover abortions. But in states where abortion is made illegal, those private plans would no longer be able to cover those procedures in-state.
The Affordable Care Act mandates that birth control be covered at no cost for women. If states were to outlaw certain types of birth control, however, that coverage could also likely dry up.
While abortion and birth control will not likely be ballot questions voters will need to decide directly in November, their votes will be sure to drive state, and in some cases federal policy in these areas.
Homeowner’s Insurance
Many states are facing a homeowner’s insurance crisis. This crisis looks different in different areas of the country, but in many states, the status quo is not sustainable.
The crisis is driven by hurricanes in Florida and Louisiana, while wildfires in California, Arizona, Colorado, and New Mexico are a top concern. Even in areas with fewer national headlines, hailstorms, derechos, and tornados in places like Iowa, Arkansas, and Ohio are driving homeowner’s insurance to the point it is barely affordable for many families.
Some states have been trying legislative fixes to stabilize their homeowner’s markets.
Florida tried reigning in the ability of contractors to file insurance claims – and lawsuits – on behalf of the homeowner. Louisiana backed off limitations keeping insurers from dropping long-time policyholders. And California is looking at its policy of only allowing insurers to price their policies based on historical data, rather than forward-looking projections.
It is too soon to see what impact these policy changes will have on premiums long-term, but it is certain state legislators, governors, and insurance commissioners will be facing these decisions in the coming years, meaning voters’ decisions in November could impact their homeowner’s policies.
When it comes to the state regulators, insurance commissioners are on the ballot in Delaware, North Dakota and Washington, as well as a particularly competitive race in North Carolina. In most states the commissioner is appointed by the governor, or in two cases, a commission.
Homeowner’s insurance is regulated at the state level, but flood insurance is a federal policy. In the realm of flood insurance, the Federal Emergency Management Agency developed a new pricing model in 2021 to bring premiums inline with risks and claims called Risk Rating 2.0.
That new pricing model hiked premiums for many communities — in some cases by 400% or more — leading to several lawsuits from communities feeling priced out. It has also lead to lawmakers calling for changes to the rating policy.
While again, flood policy isn’t directly on the ballot, the lawmakers who will decide its future will be.
Insurance and Beyond
With so many ways the November elections promise to influence the insurance industry, it shouldn’t come as a surprise that industry players are pouring millions of dollars into lawmakers’ campaign coffers.
So far, the industry seems to be backing Republican candidates and issues a bit more than Democrat candidates – contributing almost $20 million in 2024 to Republican candidates and causes, but Democrat candidates are getting their share of contributions too, netting nearly $15 million to date.
One area of insurance that is emerging is business cyber threat coverage. Cyber coverage has typically been seen as a sleepy add-on for many business policies, but that may soon change, especially following the high-profile ransomware attack of Change Healthcare in February.
While it isn’t directly aimed at cyber insurance coverage, Biden issued a cyber security proposal calling for legislation that would hold technology manufacturers accountable for hacks. How that plays out may have implications in business insurance policies if that legislation were to come to fruition after the election.
It is also plausible that issues, such as federal tariffs on imported autos and steel could further drive up costs for vehicles — having an impact on auto insurance rates.
Insurance may not be the most prominent issue in the November election conversation, but what happens at the ballot box sure could have lasting impact for the industry.
Michael Giusti, MBA, is senior writer and analyst for InsuranceQuotes.com
