Or­der would open the door for ex­pan­sion of short-term plans

The Buffalo News - - WASH­ING­TON NEWS -

so happy. They said the changes en­vi­sioned by Trump could raise costs for sick peo­ple, in­crease sales of bare-bones in­sur­ance and add un­cer­tainty to wob­bly health in­sur­ance mar­kets.

“To­day’s ex­ec­u­tive or­der could leave mil­lions of can­cer pa­tients and sur­vivors un­able to ac­cess mean­ing­ful cov­er­age,’’ said Chris Hansen, pres­i­dent of the lob­by­ing arm of the Amer­i­can Can­cer So­ci­ety.

In a state­ment from six physi­cian groups, in­clud­ing the Amer­i­can Acad­emy of Fam­ily Physi­cians, the doc­tors pre­dicted, “Al­low­ing in­sur­ers to sell nar­row, low-cost health plans likely will cause sig­nif­i­cant eco­nomic harm to women and older, sicker Amer­i­cans who stand to face high­er­cost and fewer in­sur­ance op­tions.”

While many health in­sur­ers re­mained silent about the ex­ec­u­tive or­der, some voiced con­cern that it could desta­bi­lize the mar­ket.

The Trump pro­posal “would draw younger and health­ier peo­ple away from the ex­changes and drive ad­di­tional plans out of the mar­ket,” warned Ceci Con­nolly, chief ex­ec­u­tive of the Al­liance of Com­mu­nity Health Plans. “In turn, premi­ums would con­tinue to in­crease, threat­en­ing the se­cu­rity of af­ford­able cov­er­age for mil­lions of work­ing fam­i­lies.”

The Af­ford­able Care Act has ex­panded pri­vate in­sur­ance to mil­lions of peo­ple through the cre­ation of mar­ket­places, also known as ex­changes, where peo­ple can pur­chase plans, in many cases us­ing gov­ern­ment sub­si­dies to off­set the cost. It also re­quired that plans of­fered on the ex­changes in­clude a spe­cific set of ben­e­fits, in­clud­ing hos­pi­tal care, ma­ter­nity care and men­tal health ser­vices, and it pro­hib­ited in­sur­ers from deny­ing cov­er­age to peo­ple with pre-ex­ist­ing med­i­cal con­di­tions.

The or­der’s quick­est im­pact on the mar­ket­places would be the po­ten­tial ex­pan­sion of short­term plans, which are ex­empt from Af­ford­able Care Act re­quire­ments. The Obama ad­min­is­tra­tion lim­ited the length of time peo­ple could en­roll in such plans be­cause com­pa­nies were mar­ket­ing them to healthy cus­tomers and lur­ing peo­ple away from Af­ford­able Care Act mar­ket­places, said Sab­rina Cor­lette, a re­search pro­fes­sor at Ge­orge­town Uni­ver­sity. She pre­dicted com­pa­nies would seize the op­por­tu­nity to re­sume sale of such poli­cies, which are much less ex­pen­sive than ACA plans. “There are com­pa­nies that are poised to ag­gres­sively mar­ket this stuff,” she said.

Many health pol­icy ex­perts worry that if large num­bers of healthy peo­ple move into such plans, it would drive up premi­ums for those left in Af­ford­able Care Act plans be­cause the risk pool would have sicker peo­ple.

“If the short-term plans are able to siphon off the health­i­est peo­ple, then the more highly reg­u­lated mar­ket­places may not be sus­tain­able,” said Larry Le­vitt, a se­nior vice pres­i­dent for the Kaiser Fam­ily Foun­da­tion. “These plans fol­low no rules.”

Short-term poli­cies could be use­ful to peo­ple in coun­ties where only one in­surer is of­fer­ing plans in the Af­ford­able Care Act mar­ket­place, ac­cord­ing to a White House doc­u­ment.

But short-term poli­cies can also limit ben­e­fits and charge higher premi­ums to peo­ple who have ex­pen­sive med­i­cal con­di­tions, a type of dis­crim­i­na­tion banned in poli­cies reg­u­lated un­der the Af­ford­able Care Act.

Trump’s or­der would also even­tu­ally make it eas­ier for small busi­nesses to band to­gether and buy in­sur­ance through en­ti­ties known as as­so­ci­a­tion health plans, which could be cre­ated by busi­ness and pro­fes­sional groups.

A White House of­fi­cial said these health plans “could po­ten­tially al­low Amer­i­can em­ploy­ers to form groups across state lines” – a goal cham­pi­oned by Trump and many other Repub­li­cans – al­low­ing more op­tions and the for­ma­tion of larger risk pools.

As­so­ci­a­tion plans have a trou­bled his­tory. Be­cause the plans were not sub­ject to state reg­u­la­tions that re­quired in­sur­ers to have ad­e­quate fi­nan­cial re­sources, some be­came in­sol­vent, leav­ing peo­ple with un­paid med­i­cal bills. Some in­sur­ers were ac­cused of fraud, telling cus­tomers that the plans were more com­pre­hen­sive than they were and leav­ing them un­cov­ered when con­sumers be­came se­ri­ously ill.

“This could turn back the clock three decades on small busi­ness in­sur­ance,” Le­vitt said. Without the over­sight by states, “this could cre­ate an un­reg­u­lated and risky mar­ket that we haven’t seen for decades,” he said.

The or­der won ap­plause from po­ten­tial spon­sors of as­so­ci­a­tion health plans, in­clud­ing the Na­tional Fed­er­a­tion of In­de­pen­dent Busi­ness, the Na­tional Res­tau­rant As­so­ci­a­tion, the U.S. Cham­ber of Com­merce and As­so­ci­ated Builders and Con­trac­tors, a trade group for the con­struc­tion in­dus­try.

The White House re­leased a doc­u­ment say­ing that some con­sumer pro­tec­tions would re­main in place for as­so­ci­a­tion plans. “Em­ploy­ers par­tic­i­pat­ing in an as­so­ci­a­tion health plan can­not ex­clude any em­ployee from join­ing the plan and can­not de­velop premi­ums based on health con­di­tions” of in­di­vid­ual em­ploy­ees, ac­cord­ing to the doc­u­ment.

But state of­fi­cials pointed out that an as­so­ci­a­tion health plan can set dif­fer­ent rates for dif­fer­ent em­ploy­ers, so that a com­pany with older, sicker work­ers might have to pay much more than one with young, healthy em­ploy­ees.

“Two em­ploy­ers in an as­so­ci­a­tion can be charged very dif­fer­ent rates, based on the med­i­cal claims filed by their em­ploy­ees,” said Mike Krei­dler, state in­sur­ance com­mis­sioner in Wash­ing­ton.

New York Times

Pres­i­dent Trump in­vited Vice Pres­i­dent Pence, left, Sen. Rand Paul, and small-busi­ness own­ers to the Thurs­day sign­ing of an ex­ec­u­tive or­der that clears the way for po­ten­tially sweep­ing changes in health in­sur­ance.

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