HHS bid to fix exchanges may not lift cloud of ‘repeal and replace’
The Trump administration is trying to pull off an odd trick: satisfying the concerns of health insurers to stop them from fleeing the Affordable Care Act exchanges while also working to discredit and unravel the law.
Days after Congress confirmed Dr. Tom Price as HHS secretary, the CMS issued a proposed rule intended to stabilize the marketplaces and appease insurers, particularly their concern that it’s too easy for people to sign up for coverage only when they need healthcare services.
“Given the emergency caused by Obamacare’s damage to our healthcare system, it is essential that action be taken as soon as possible to provide some immediate relief to the American people,” Price said in a statement about the proposed changes. “These are initial steps in advance of a broader effort to reverse the harmful effects of Obamacare, promote positive solutions to improve access to quality, affordable care, and ensure we have a healthcare system that best serves the needs of all Americans.”
The White House appears to be trying to buy time while Congress attempts to coalesce around a plan to replace the Affordable Care Act. To get the changes finalized as quickly as possible, the rule has a shorter-than-usual comment period. Insurers and other industry stakeholders have until March 7 to seek changes in the regulations.
The draft failed to address the insurance industry’s most pressing concerns. “Right now, plans are missing key pieces of information to make smart business decisions for 2018,” said Ceci Connolly, CEO of the
“By making it harder to enroll, the Trump administration is creating their own death spiral that would deter young adults from gaining coverage, thereby driving up costs for everyone.”
RON POLLACK Executive director Families USA
Alliance of Community Health Plans. Most need to decide by March whether they’ll stay on the exchanges.
One key issue that’s not addressed is the individual mandate, the ACA’s primary mechanism for creating a balanced risk pool. The mandate is considered imperative as long as the law continues to prevent insurers from rejecting consumers with pre-existing conditions. Insurers also say they need a commitment from the administration that they will continue to receive payments for costsharing reductions that exchange plans are required to extend to lower-income enrollees.
None of that was addressed in the pro-
posed rule. The Internal Revenue Service, meanwhile, announced it would not reject tax returns that fail to respond to questions about healthcare coverage. The IRS was following an executive order that President Donald Trump signed on Inauguration Day. It directs federal agencies to “exercise all authority and discretion ... to waive, defer, grant exemptions from, or delay the implementation of any provision” of the ACA that would impose a cost or regulatory burden on Americans.
One major concern of insurers that the rule does address is the ability of consumers to get coverage outside of the annual open-enrollment window. Anyone who signs up in a special enrollment period will be subject to strict requirements for documentation and verification. The CMS previously planned to have 50% of applicants during special enrollment periods submit documents before their coverage begins. The agency now proposes to expand that to 100%, resulting in an additional 650,000 consumers having their coverage delayed while the documentation is verified annually.
The rule also would allow insurers to refuse to cover people who haven’t paid their premiums, and it would shorten the open-enrollment period by half.
Those provisions may please insur-
ers, but they drew criticism from consumer advocates. “The Trump administration is deliberately trying to sabotage the Affordable Care Act, especially by making it much more difficult for people to enroll in coverage,” Ron Pollack, executive director of Families USA, said in a statement. “By making it harder to enroll, they are creating their own death spiral that would deter young adults from gaining coverage, thereby driving up costs for everyone.”
The rule also would grant insurers more variation in the actuarial values required for the different metal tiers of individual and small-group plans. The left-leaning Center for Budget and Policy Priorities calculated that the additional wiggle room would mean lower premium tax credits or higher out-ofpocket costs for many enrollees.
Responsibility for network adequacy (making sure plans offer enough providers and a good variety of them) would shift from the CMS to the states, eliminating the administrative of burden on insurers to comply with federal and state standards.
The agency also proposes rolling back a CMS requirement for providing access to “essential community providers,” which serve predominantly poor and medically underserved neighborhoods. Plans sold through the federal exchange have been required to include at least 30% of such providers in the territory covered. The Trump administration wants to lower that threshold to 20%.
It’s unclear how much any regulatory changes can do to mitigate insurers’ reluctance to gamble on the exchanges as Republicans in Congress attempt to repeal and replace the ACA.
A day before the CMS issued the proposed rule, Humana announced it would drop out next year. Aetna CEO Mark Bertolini, meanwhile, made headlines by saying during a Wall Street Journal event that the ACA marketplaces are in a “death spiral”— though he also said in a statement that the Trump administration had “taken some good initial steps” with the proposed regulation.