Trump or­der to add health plan choices

Crit­ics call it ‘sab­o­tage’ and a move to pro­mote ‘junk in­sur­ance’ in U.S.

The Palm Beach Post - - FRONT PAGE - By Charles El­more Palm Beach Post Staff Writer

Pres­i­dent Don­ald Trump said an ex­ec­u­tive or­der he signed Thurs­day rep­re­sents the first step to give mil­lions of peo­ple ac­cess to cheaper health plans, but Florida Democrats called it “sab­o­tage” and a na­tional con­sumer group blasted it as a move to pro­mote “junk in­sur­ance” and desta­bi­lize mar­kets.

Trump said Thurs­day “we are mov­ing to­ward lower costs and more op­tions in the health­care mar­ket, and tak­ing cru­cial steps to­ward sav­ing the Amer­i­can peo­ple from the nightmare of Obamacare.”

The ex­ec­u­tive or­der by­passes Congress, which has re­peat­edly failed to agree on an Af­ford­able Care Act re­peal or over­haul, and rep­re­sents an at­tempt to guide health pol­icy from the White House.

But it drew im­me­di­ate crit­i­cism from ACA sup­port­ers.

“Pres­i­dent Trump’s ex­ec­u­tive or­der to­day, which the White House called ‘the be­gin­ning of the un­rav­el­ing of the ACA,’ is a brazen at­tempt to sab­o­tage the Af­ford­able Care Act,” said U.S. Rep. Ted Deutch, D-Boca Ra­ton. “Like Trump­Care, these changes

could desta­bi­lize the Health­Care.gov in­sur­ance mar­kets and make com­pre­hen­sive cov­er­age more ex­pen­sive for mil­lions of Amer­i­cans.”

The or­der in­structs fed­eral agen­cies to be­gin mak­ing rules to broaden op­tions for small busi­nesses and their em­ploy­ees to join as­so­ci­a­tions that pro­vide health cov­er­age across state lines. An­other part calls for rules al­low­ing cer­tain “short-term” health plans to stay in ef­fect longer, and be re­new­able. A key ques­tion in both cases: Whether this lets the plans make an end run around key Obamacare reg­u­la­tions.

The rule-mak­ing process could take months, well into 2018. De­pend­ing on how these plans are treated un­der new rules, they could be ex­empt from re­quire­ments to of­fer “es­sen­tial ben­e­fits” un­der the Af­ford­able Care Act, an­a­lysts say. Such es­sen­tial ben­e­fits in­clude cov­er­age for ex­pec­tant moth­ers, emer­gency-room care and pre­scrip­tion drugs, and sub­stance abuse and men­tal health treat­ment.

“If car­ried into ac­tion, the pro­vi­sions of the ex­ec­u­tive or­der would likely siphon healthy peo­ple from the Af­ford­able Care Act-com­pli­ant mar­ket, con­tin­u­ing a pat­tern of reg­u­la­tory ac­tions un­der the Trump ad­min­is­tra­tion that have un­der­mined the ACA,” blogged Ti­mothy Jost, emer­i­tus pro­fes­sor at Wash­ing­ton and Lee Univer­sity’s School of Law and a spe­cial­ist in health law.

“Short-term poli­cies in fact gen­er­ally of­fer skimpy cov­er­age,” Jost said. “They im­pose lim­its on cov­er­age, omit ben­e­fits like men­tal health or ma­ter­nity cov­er­age, ex­clude cov­er­age of pre-ex­ist­ing con­di­tions, and have higher out-of-pocket lim­its than ACA-com­pli­ant cov­er­age. They also are very profitable to in­sur­ers who of­fer them, hav­ing much lower med­i­cal loss ra­tios than ACA-com­pli­ant cov­er­age. Fi­nally, they are cheap for peo­ple who qual­ify for them.”

That raises the prospect of new op­tions and pos­si­ble sav­ings for healthy peo­ple who don’t have health cov­er­age from big em­ploy­ers or Medi­care. About 7 per­cent or so of more than 1 mil­lion Obamacare mar­ket­place cus­tomers in Florida get no gov­ern­ment sub­si­dies based on in­come to keep costs down. They take the brunt of premium in­creases av­er­ag­ing 45 per­cent in Florida for 2018 mar­ket­place plans — which Jost said is largely be­cause of the Trump ad­min­is­tra­tion’s own ac­tions such as re­duc­ing or threat­en­ing to with­hold key fund­ing — while 93 per­cent of cus­tomers see lit­tle change in what they pay out of pocket.

But the Amer­i­can Academy of Ac­tu­ar­ies, the group that helps in­sur­ers set rates, warned of “far-reach­ing and un­in­tended ef­fects,” in­clud­ing “tilt­ing the mar­ket in fa­vor of en­ti­ties with weaker ben­e­fits or sol­vency stan­dards and weak­en­ing the pro­tec­tions for con­sumers with pre-ex­ist­ing health con­di­tions.”

It’s bad news for the 3.1 mil­lion Florid­i­ans un­der age 65 with pre-ex­ist­ing health con­di­tions, said Joseph F. Pen­nisi, ex­ec­u­tive direc­tor of the Lake Mary-based Florida Pol­icy In­sti­tute, which calls it­self a “com­mon sense” think tank pro­mot­ing gen­eral pros­per­ity.

“Per­mit­ting the cre­ation of ‘non­com­pli­ant’ mar­kets would es­sen­tially re­sult in two risk pools, one for health­ier in­di­vid­u­als and one for sicker res­i­dents,” Pen­nisi said. “If the ex­ec­u­tive or­der is im­ple­mented, pre­mi­ums for ACA-com­pli­ant plans would rise sharply. This bodes poorly for those Florid­i­ans with pre-ex­ist­ing health con­di­tions and other com­plex med­i­cal needs, who would face high pre­mi­ums.”

Sev­eral ad­vo­cacy groups op­posed the plan.

“While this ex­ec­u­tive or­der claims to help im­prove con­sumers’ ac­cess to af­ford­able care, it would have the ex­act op­po­site ef­fect,” said Betsy Imholz, spe­cial projects direc­tor for Con­sumers Union. “Al­low­ing in­sur­ers to sell sub­stan­dard as­so­ci­a­tion health plans that aren’t re­quired to cover ba­sic ser­vices and ben­e­fits will fur­ther frag­ment and desta­bi­lize the in­sur­ance mar­kets as a whole.”

As The Palm Beach Post re­ported, sell­ing poli­cies across state lines al­ready is pos­si­ble in a lim­ited way un­der cur­rent law, but it faces cer­tain prac­ti­cal hur­dles. In­sur­ance com­pa­nies have in­creas­ingly nar­row net­works of health providers set up within each state. That of­ten means plans in one state are not nec­es­sar­ily con­ve­nient or at­trac­tive to con­sumers in an­other.

Sen. Rand Paul, R-Ky., said the or­der is a step in the right di­rec­tion dur­ing the sign­ing at the White House on Thurs­day.

“To­day’s a big day,” Paul said. “Pres­i­dent Trump is do­ing to­day what I be­lieve is the big­gest free-mar­ket re­form of health care in a gen­er­a­tion.”

It will al­low “mil­lions of peo­ple to get in­sur­ance across state lines at an in­ex­pen­sive price,” Paul said.

Trump made his in­ten­tions known late this past month.

“We be­lieve states are go­ing to have a far big­ger is­sue than in­sur­ance com­pa­nies when it comes to this con­cept of sell­ing across state lines, as each in­di­vid­ual state has its own in­sur­ance com­mis­sion that has a job to pro­tect its own con­sumers,” Gor­don F. Bai­ley III, vice pres­i­dent for Jack­sonville-based Florida Blue, the state’s largest health in­surer, said Sept. 28 in West Palm Beach.

A group rep­re­sent­ing Florida in­sur­ers sig­naled a will­ing­ness to ex­plore the mer­its of the plan Thurs­day.

“Al­low­ing health plans to of­fer in­no­va­tive prod­ucts and in­creas­ing lower cost op­tions for busi­nesses and in­di­vid­u­als is not a bad thing,” said Au­drey S. Brown, pres­i­dent of the Florida As­so­ci­a­tion of Health Plans.

Florida’s De­part­ment of Fi­nan­cial Ser­vices “will con­tinue to look deeper at the con­cept of in­ter­state in­sur­ance sales — and its pos­si­ble im­pacts on Florida’s pol­i­cy­hold­ers — as the specifics of Pres­i­dent Trump’s plan come to light,” spokes­woman Ash­ley Carr said in late Septem­ber. “Florida has fash­ioned it­self a leader in im­ple­ment­ing in­sur­ance con­sumer pro­tec­tions, and we’d look to see that those pro­tec­tions re­main in place.”

Trump’s move was ap­plauded by Obamacare crit­ics, in­clud­ing Amer­i­cans for Lim­ited Gov­ern­ment Pres­i­dent Rick Man­ning.

“Pres­i­dent Trump has wisely asked the De­part­ment of La­bor to ex­am­ine the law and body of reg­u­la­tion to de­ter­mine whether new reg­u­la­tions can be put into ef­fect al­low­ing for the sale of as­so­ci­a­tion health plans across state lines,” Man­ning said. “The great news is that this com­pe­ti­tion promises to al­low more Amer­i­cans more choices at an af­ford­able cost, truly pro­vid­ing af­ford­able health care op­tions, un­like Obamacare.”

Con­sumers Union’s Imholz sees it very dif­fer­ently: “Ex­pand­ing the sale of these as­so­ci­a­tion health plans means the growth of junk in­sur­ance — cov­er­age that may seem af­ford­able to con­sumers but ac­tu­ally cov­ers very lit­tle, po­ten­tially leav­ing them on the hook for huge out-of-pocket costs.”

She con­tin­ued, “This is yet an­other ac­tion that un­der­mines the good bi­par­ti­san ef­forts in the Se­nate to ac­tu­ally strengthen and sta­bi­lize the health in­sur­ance mar­kets. Con­sumers de­serve bet­ter.”

ALEX WONG / GETTY IMAGES

Pres­i­dent Don­ald Trump signs his ex­ec­u­tive or­der on health in­sur­ance as Sen. Rand Paul (above left), R-Ky., Vice Pres­i­dent Mike Pence and

Rep. Vir­ginia Foxx, R.-N.C., look on in the Roo­sevelt Room of the White House on Thurs­day.

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