Trump or­der to al­low lean, lower-cost health plans

New ex­ec­u­tive rule un­der­cuts Oba­macare in­sur­ance stan­dards, but key el­e­ments re­main un­clear.

Los Angeles Times - - FRONT PAGE - By Noam N. Levey

WASH­ING­TON — Pres­i­dent Trump moved Thurs­day to scale back rules on health in­sur­ance across the coun­try in the ad­min­is­tra­tion’s most am­bi­tious ef­fort to use its reg­u­la­tory pow­ers to un­der­mine the Af­ford­able Care Act.

The con­tro­ver­sial new ex­ec­u­tive or­der Trump is­sued aims to open the way for a greater num­ber of rel­a­tively cheap health plans that could of­fer skimpier cov­er­age than al­lowed un­der the health­care law, of­ten called Oba­macare.

The broadly worded or­der leaves many key el­e­ments of the new plans un­cer­tain, how­ever, sub­ject to a lengthy ad­min­is­tra­tive process, which means the or­der’s im­pact will re­main un­clear, and the new plans un­avail­able to con­sumers, for this year’s open en­roll­ment sea­son and many months to come.

Trump avoided that point as he for­mally re­leased the or­der at the White House, declar­ing that it would “pro­vide mil­lions of Amer­i­cans with Oba­macare re­lief” and would “in­crease com­pe­ti­tion, in­crease choice and in­crease ac­cess to lower-priced, high-qual­ity health­care op­tions.”

“Peo­ple will have great, great health­care,” Trump said, speak­ing to an au­di­ence made up of Cabi­net of­fi­cials, Vice Pres­i­dent Mike Pence, Sen. Rand Paul (RKy.) and own­ers of sev­eral small busi­nesses who the White House said would ben­e­fit from the new plans.

Though loos­en­ing con­sumer pro­tec­tions in the Af­ford­able Care Act might make in­sur­ance cheaper for those in good health, that would hap­pen at the ex­pense of mil­lions of sicker Amer­i­cans, who will have to

pay more, ac­cord­ing to pa­tient ad­vo­cates, state reg­u­la­tors and oth­ers across the health­care sec­tor.

“To­day’s ex­ec­u­tive or­der jeop­ar­dizes the abil­ity of mil­lions of cancer pa­tients, sur­vivors and those at risk for the dis­ease from be­ing able to ac­cess or af­ford mean­ing­ful health in­sur­ance,” said Chris Hansen, pres­i­dent of the Amer­i­can Cancer So­ci­ety’s ad­vo­cacy arm.

The pres­i­dent’s moves, which come af­ter con­gres­sional Repub­li­cans re­peat­edly failed to roll back the 2010 health­care law this year, also re­newed fears that Trump is de­ter­mined to de­lib­er­ately desta­bi­lize in­sur­ance mar­kets and weaken Pres­i­dent Obama’s sig­na­ture do­mes­tic pol­icy achieve­ment.

The ad­min­is­tra­tion al­ready has taken steps to un­der­mine those mar­kets, in­clud­ing sharply cut­ting fed­eral sup­port for ef­forts to en­roll peo­ple in mar­ket­place cov­er­age next year.

The Af­ford­able Care Act im­posed new re­quire­ments on in­sur­ers, pro­hibit­ing them from turn­ing away sick con­sumers or plac­ing an­nual and life­time lim­its on med­i­cal cov­er­age, some­thing that was once com­mon­place, and man­dat­ing a ba­sic set of ben­e­fits. Those in­clude cov­er­age of pre­scrip­tion drugs, ma­ter­nity care and men­tal health treat­ment.

Repub­li­cans have long com­plained that th­ese re­quire­ments drive up costs.

Trump’s or­der aims to change that, but the pres­i­dent can­not scrap the ex­ist­ing in­sur­ance pro­tec­tions al­to­gether. They are in law and there­fore can be changed only by an act of Con­gress.

In­stead, Trump’s ex­ec­u­tive or­der di­rects fed­eral agen­cies to de­velop new rules that would al­low in­sur­ers to by­pass some of th­ese re­quire­ments through al­ter­na­tive kinds of in­sur­ance plans.

How ef­fec­tive the new plans will be at low­er­ing costs for some — and how much of a threat they pose to the mar­ket­places — will de­pend on how ag­gres­sively the agen­cies act in writ­ing those new rules. They face con­straints from ex­ist­ing fed­eral laws, and their new rules could draw chal­lenges in court, just as Repub­li­cans chal­lenged Obama-era rules that they ar­gued over­stepped the pres­i­dent’s author­ity.

Trump’s new pro­pos­als in­clude ex­panded use of short-term plans, which don’t have to meet the in­sur­ance pro­tec­tions in the Af­ford­able Care Act.

The Obama ad­min­is­tra­tion is­sued rules that pro­hib­ited con­sumers from buy­ing th­ese plans for more than three months.

But the Trump ad­min­is­tra­tion is propos­ing to al­low peo­ple to re­main on th­ese plans longer and re­new them.

Trump’s or­der also in­structs fed­eral agen­cies to make it eas­ier for in­di­vid­ual Amer­i­cans or small busi­nesses to join to­gether to get health in­sur­ance through so-called as­so­ci­a­tion health plans.

It di­rects the Trea­sury Depart­ment to look at ways to ex­pand the use of tax-free ac­counts called Health Re­im­burse­ment Ar­range­ments that al­low em­ploy­ers to pro­vide their work­ers with ad­di­tional money for health­care ex­penses.

And the or­der calls on fed­eral agen­cies to look at how con­sol­i­da­tion among hospi­tals, doc­tors and other providers may be driv­ing up costs in some mar­kets around the coun­try.

Back­ers of as­so­ci­a­tion health plans ar­gue that they give small em­ploy­ers and in­di­vid­u­als the abil­ity to get cheaper cov­er­age.

On Thurs­day, the head of the Na­tional Res­tau­rant Assn. praised Trump’s or­der.

“By al­low­ing small busi­nesses and in­di­vid­u­als to join to­gether to ac­cess health in­sur­ance through their as­so­ci­a­tion mem­ber­ships, Pres­i­dent Trump’s ex­ec­u­tive or­der pro­vides more op­por­tu­nity for Amer­i­cans to pur­chase af­ford­able health­care cov­er­age,” Dawn Sweeney said.

Ad­min­is­tra­tion of­fi­cials said that new as­so­ci­a­tions would be sub­ject to some of the Af­ford­able Care Act’s health in­sur­ance re­quire­ments.

But as­so­ci­a­tion health plans his­tor­i­cally have also been a way to cir­cum­vent state in­sur­ance reg­u­la­tions. And they could avoid man­dates in the cur­rent law re­quir­ing plans to cover a ba­sic set of ben­e­fits.

If as­so­ci­a­tion health plans or short-term plans do not have to of­fer as many ben­e­fits as plans gov­erned by the 2010 health law, they may cost less. And a less com­pre­hen­sive health plan might be at­trac­tive to health­ier con­sumers, who might con­clude they don’t need cov­er­age for pre­scrip­tion drugs or men­tal health treat­ment be­cause they don’t use those ser­vices.

But a flood of health plans that of­fer more lim­ited ben­e­fits could also leave many more Amer­i­cans with in­ad­e­quate cov­er­age — one of the problems that ex­isted be­fore the Af­ford­able Care Act, which the health­care law aimed to fix.

“Peo­ple were un­for­tu­nately very sus­cep­ti­ble to junk in­sur­ance” in the past, said Karen Pol­litz, an in­sur­ance mar­ket ex­pert at the non­profit Kaiser Fam­ily Foun­da­tion.

Con­sumers of­ten did not un­der­stand the lim­its of the cov­er­age they bought, leav­ing them with­out pro­tec­tions if they un­ex­pect­edly got sick, pa­tient ad­vo­cates found.

Al­low­ing less com­pre­hen­sive health plans back into the mar­ket also tends to make health cov­er­age more ex­pen­sive for sick peo­ple.

The Af­ford­able Care Act aims to cre­ate large risk pools for peo­ple who don’t get in­sur­ance on the job or cov­er­age un­der a govern­ment plan, such as Medi­care.

Healthy peo­ple in the pool off­set the costs of sicker peo­ple, mak­ing in­sur­ance fea­si­ble for those with pre­ex­ist­ing health problems.

Cre­at­ing a two-tier sys­tem in which some con­sumers can buy skimpier plans could re­duce costs for the healthy but over time can desta­bi­lize an in­sur­ance mar­ket as in­sur­ers are forced to charge more and more for the sick­est pa­tients, ac­cord­ing to ex­perts such as the Amer­i­can Academy of Ac­tu­ar­ies.

“A key to sus­tain­abil­ity of health in­sur­ance mar­kets is that health plans com­pet­ing to en­roll the same par­tic­i­pants must op­er­ate un­der the same rules,” the ac­tu­ar­ies said in a brief this year on as­so­ci­a­tion health plans.

The group warned that “ul­ti­mately, higher-cost in­di­vid­u­als and small groups would find it more dif­fi­cult to ob­tain cov­er­age.”

On Thurs­day, Ted Nickel, the pres­i­dent of the bi­par­ti­san Na­tional Assn. of In­sur­ance Com­mis­sion­ers and the cur­rent Wis­con­sin in­sur­ance com­mis­sioner, warned that com­mis­sion­ers have “long ex­pressed con­cerns with ex­pand­ing as­so­ci­a­tion health plans in a man­ner that re­duces con­sumer pro­tec­tions or sol­vency re­quire­ments that pro­mote safe and sound mar­kets.

“We also have con­cerns about the im­pact of such a pro­posal on al­ready frag­ile mar­kets.”

‘Ul­ti­mately, higher-cost in­di­vid­u­als and small groups would find it more dif­fi­cult to ob­tain cov­er­age.’ — Amer­i­can Academy of Ac­tu­ar­ies, as­sess­ing as­so­ci­a­tion health plans, which will be boosted un­der Trump’s ex­ec­u­tive or­der

Alex Wong Getty Im­ages

GOP REP. Vir­ginia Foxx, third from right, and Sen. Rand Paul, sixth from right, join Pres­i­dent Trump as he signs a health­care or­der.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.