The Centers for Medicare and Medicaid Services issued a final rule Thursday aimed at stabilizing the health insurance exchanges created under Obamacare.
The rule, which addresses some concerns from health insurers, demonstrates some willingness by the Trump administration to repair the exchanges before looking at ways to repeal portions of Obamacare.
It cuts the period for which people can sign up for health insurance, known as open enrollment, by half, giving them six weeks to sign up instead of three months. That aligns closer to the plans that are sold to people who qualify for Medicare. It also allows insurers more flexibility regarding the plans they sell and gives more authority to states to determine whether the plans they sell offer an adequate array of medical providers.
The rule targets specific loopholes that health insurance companies raised concerns about, including implementing stronger vetting practices for consumers, who will have to demonstrate when they enroll outside of open enrollment that they did so for a qualifying event, which include a job change, move or divorce.
People who stop paying premiums before the year is over will have to pay insurance companies what they owed over the missed period before being allowed to enroll again. Since the exchanges went into effect, customers who didn’t pay their premiums would continue to receive care for 90 days, without penalty and with insurers responsible for the first 30 days of payments and providers responsible for the last 60.
“The Centers for Medicare and Medicaid Services is committed to ensuring access to high-quality affordable healthcare for all Americans, and these actions are necessary to increase patient choices and to lower premiums,” said Seema Verma, the agency’s administrator. “While these steps will help stabilize the individual and small group markets, they are not a long-term cure for the problems that the Affordable Care Act has created in our healthcare system.”
The agency detailed some problems with the exchanges, including that a third of U.S. counties can select plans from only one insurer and that some states have faced double-digit premium increases.Republicans have used these examples as evidence that the law is failing, while supporters of Obamacare have countered that they are partly attributable to deliberate sabotage, including through a decision by congressional Republicans to withhold funding to help insurers recoup losses. The exchanges, created under Obamacare, allow most people who do not have insurance coverage through the government or through an employer to buy plans that are subsidized by the government.
When the draft of the rule was introduced last month, several groups raised concerns that it would reduce consumer protections in Obamacare, formally known as the Affordable Care Act.
Following the release of the final rule, Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, tweeted: “The new ACA rule will make it harder for some people to get insurance, but contains a lot of items on the insurance industry’s wish list.”
Indeed, the final rule was welcomed by the industry, though insurers also pointed to unanswered questions for the future of the exchanges. Insures have until June to decide how they will price plans, but they also are facing potential repeal of portions of Obamacare by Republicans in Congress. Though GOP lawmakers have been unable to agree on details of a bill to repeal Obamacare, delaying a decision has added to the uncertainty that insurers face.
The group has raised particular urgency about getting a final answer from the Trump administration about whether it will block payments that help low-income people pay for out-of-pocket medical expenses. The payments, expected to total $9 billion in 2017, are being distributed currently but their future is in limbo because of a lawsuit House Republicans initiated when Barack Obama was president.
In an interview Wednesday, President Trump suggested that he might hold back the payments, called cost-sharing subsidies, as a way to bring Democrats to the negotiating table on healthcare.
American’s Health Insurance Plans, or AHIP, raised those factors in its public statement on the final rule. “This final rule adopts some important changes that have been needed for some time in order to improve the functioning of the individual market, and we appreciate those changes,” AHIP president and CEO Marilyn Tavenner said.
“However, there is still too much instability and uncertainty in this market. Most urgently, health plans and the consumers they serve need to know that funding for cost-sharing reduction subsidies will continue uninterrupted. Without funding, millions of Americans who buy their own plan will be harmed. Many plans will likely drop out of the market. Premiums will go up sharply – nearly 20 percent – across the market. Costs will go up for taxpayers. And doctors and hospitals will see even greater strains on their ability to care for people.
“We urge Congress and the administration to act now to guarantee funding for cost-sharing reduction subsidies.”
Rep. Frank Pallone, D-N.J., issued a statement saying that the latest rule wouldn’t produce “any meaningful improvements” to the stability of the Obamacare exchanges and also brought attention to the cost-sharing subsidies.
“By repeatedly refusing to commit to providing cost-sharing assistance, and even suggesting that he will hold this assistance hostage for political gain, President Trump is creating uncertainty and purposefully sabotaging the marketplaces,” he said. “It’s time for the threats and the sabotage to end, and for President Trump to undo the damage he’s done to the Marketplaces. It’s time to work to improve the law.”
