Trump ad­min­is­tra­tion ush­ers in changes to Obama health law

The Trentonian (Trenton, NJ) - - NEWS - By Ri­cardo Alon­soZal­divar and Tom Mur­phy

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, where Repub­li­cans are strug­gling to reach con­sen­sus over how to de­liver on their prom­ise to re­peal and re­place the health law. House Speaker Paul Ryan, R-Wis., is ex­pected to present el­e­ments of a plan to GOP law­mak­ers Thurs­day morn­ing.

But the ad­min­is­tra­tion ac­tions do sig­nal a change in di­rec­tion. Re­cently con­firmed HHS Sec­re­tary Tom Price called them “ini­tial steps in ad­vance of a broader ef­fort to reverse the harm­ful ef­fects of Oba­macare.” Pre­mi­ums are up sharply this year, while many com­mu­ni­ties were left with just one in­surer.

For con­sumers, the pro­posed HHS rules mean tighter scru­tiny of any­one try­ing to signup 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 claimed that 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 low­premium 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’s Trump prom­ise to lower de­ductibles.” A de­ductible is the an­nual amount con­sumers pay for med­i­cal care be­fore their in­sur­ance kicks in.

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. The IRS said that’s in line with Trump’s ex­ec­u­tive or­der di­rect­ing agen­cies to ease re­quire­ments of the health law.

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.

Ad­min­is­tra­tion of­fi­cials said the HHS rules will help to sta­bi­lize the in­di­vid­ual health in­sur­ance mar­ket for next year. That could buy time for Congress to make big­ger changes.

The in­dus­try group Amer­ica’s Health In­sur­ance Plans com­mended the ad­min­is­tra­tion, but said more is needed. In par­tic­u­lar, in­sur­ers want Trump and Congress to re­move a le­gal cloud over bil­lions of dol­lars in sub­si­dies that the com­pa­nies are ob­li­gated to pay to cover de­ductibles and co­pay­ments for low-in­come peo­ple.

It re­mained un­clear if in­sur­ers would be swayed. Only Tues­day, Hu­mana an­nounced it will not par­tic­i­pate in next year in the gov­ern­ment-run mar­ket­places, where in­surer ex­its have al­ready di­min­ished con­sumer choice.

“I don’t nec­es­sar­ily think these changes are enough to al­ter in­sur­ers’ de­ci­sion­mak­ing about stay­ing in the mar­kets,” said Caro­line Pear­son of the con­sult­ing firm Avalere Health.

Pear­son said con­sumer reviews may also be mixed. Healthy peo­ple may ap­pre­ci­ate more af­ford­able pre­mi­ums. But peo­ple with health prob­lems could see an ero­sion in cov­er­age.

Sep­a­rately, a gov­ern­ment re­port Wed­nes­day said the na­tion’s prob­lem with ris­ing health care spend­ing is back and here to stay, re­gard­less of what hap­pens to the Obama health law.

Non­par­ti­san ex­perts at HHS said health care spend­ing will claim a grow­ing share of na­tional re­sources for the fore­see­able fu­ture.

Health care will grow at an an­nual av­er­age of 5.6 per­cent from 2016-2025, out­pac­ing ex­pected eco­nomic growth. Now $3.5 tril­lion, the na­tion’s health care tab will in­crease to nearly $5.5 tril­lion in 2025, ac­count­ing for about one­fifth of the econ­omy.

AP PHOTO/CAROLYN KASTER FILE

Tom Price, now Health and Hu­man Ser­vices Sec­re­tary, tes­ti­fies on Capi­tol Hill in Wash­ing­ton Jan. 18. The Trump ad­min­is­tra­tion took steps Wed­nes­day in­tended to help calm jit­tery in­sur­ance com­pa­nies and make tax com­pli­ance with for­mer Pres­i­dent Barack Obama’s health law less bur­den­some for some peo­ple.

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