New guidelines would remove pillars of ACA

States would be free to redefine use of federal subsidies.

WASHINGTON — The Trump administration is urging states to remove pillars of the Affordable Care Act, ending a basic rule that federal insurance subsidies can be used only for people buying health plans in marketplaces created under the law.

According to statements issued Thursday by federal health officials, states would be free to redefine the use of those subsidies, which have since 2014 provided the first help the government ever has offered consumers to afford monthly insurance premiums.

States could allow the subsidies to be used for health plans the administration has been promoting outside the ACA marketplaces that are less expensive because they provide fewer benefits and fewer consumer protections.

Even more dramatically, states could let residents with employer-based coverage set up accounts in which they mingle the federal subsidies with health-care funds from their job or personal tax-deferred savings funds.

If some states take up the administration’s offer, it would undermine the ACA’s central changes to the insurance system, including the establishment of nationwide standards.

Another goal of the ACA, the sprawling 2010 law that was one of President Barack Obama’s domestic accomplishments, was to concentrate help on the so-called individual insurance market that serves people who do not have access to affordable health benefits through a job.

Prices were often out of

control and discrimination against unhealthy people was more prevalent before the ACA imposed required benefits, prohibited insurers from charging more to people with pre-existing conditions and created a federal health exchange and similar state-run marketplace in which private insurance companies compete for customers.

The ACA plans have been the only ones for which consumers can use the subsidies, designed to help customers with incomes up to the middle class afford the premiums.

The new advice, called “waiver concepts,” because they are ideas for how states could get federal permission to deviate from the law’s basic

rules, stray from those goals.

The day before they were released by Seema Verma, administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, an analysis by the Brookings Institution questioned the legality of the concepts.

The analysis by Christen Linke Young, a Brookings fellow and HHS alumni from the Obama administration, contends that “there are serious questions” about whether the changes are allowable under the law and that “at the very least, it is likely invalid” for CMS to issue the advice to states without going through the formal steps to change federal regulations.

KATE PATTERSON / WASHINGTON POST Seema Verma, administrator of Health and Human Services’ Centers for Medicare and Medicaid Services, released new ACA guidelines Thursday.