Trump administration tries to calm insurance companies

But changes could lead to higher annual deductibles

WASHINGTON — The Trump administration took steps Wednesday intended to calm jittery insurance companies and make tax compliance with former President Barack Obama’s health law less burdensome for some people.

But the changes could lead to policies with higher annual deductibles, according to the administration’s own proposal. That seems to undercut President Donald Trump’s assurance in a recent Washington Post interview that his plan would mean “lower numbers, much lower deductibles.”

The moves announced separately by the Health and Human Services Department and the IRS don’t amount to sweeping changes to the Affordable Care Act. That would fall to Congress.

But the administration actions do signal a change in direction. HHS Secretary Tom Price called them “initial steps in advance of a broader effort to reverse the harmful effects of Obamacare.”

For consumers, the proposed HHS rules mean tighter scrutiny of anyone trying to sign up for coverage outside of open enrollment by claiming a “special enrollment period” due to a change in life circumstances such as the birth of a child, marriage, or the loss of job-based insurance. Also, sign-up season will be 45 days, shortened from three months currently.

For insurers, the curbs on special enrollments are a big item. The industry said some consumers were gaming the system by signing up when they needed expensive treatments, only to drop out later.

Insurers would also gain more flexibility to design low-premium plans tailored to younger people. But that flexibility could lead to higher deductibles, according to HHS.

“The proposed change could reduce the value of coverage for consumers,” the administration proposal said. “However, in the longer run, providing (insurers) with additional flexibility could help stabilize premiums.”

Larry Levitt of the nonpartisan Kaiser Family Foundation said “this would allow insurers to offer plans with higher deductibles, which seems counter to President Trump’s promise to lower deductibles.”

Democrats said the HHS changes would undermine consumer protections and make more people uninsured. Some called the move “sabotage.”

Separately, the IRS said it’s backing off from a tighter approach to enforcement that was in the works for this tax-filing season.

Under the law, people are required to have health coverage or risk fines from the IRS — an unpopular provision. That underlying requirement remains on the books, and taxpayers are still legally obligated to comply, the IRS said.

But the agency is changing its approach to enforcement. Originally, the IRS had planned to start rejecting returns this year if a taxpayer failed to indicate whether he or she had coverage. Now the IRS says it will keep processing such returns, as it has in the past.

CAROLYN KASTER/AP HHS Secretary Tom Price says the moves are “initial steps” to alter Obamacare.