The Trump administration has taken a first step to reshape Obamacare through its own administrative powers, even as Republicans on Capitol Hill remain stymied over how to repeal and replace the healthcare law.
A rule proposed on Wednesday, which would tighten up enrollment and allow plans across all tiers to cover fewer medical expenses, is likely to please health insurers facing deep marketplace uncertainty, and comes on the heels of an announcement Tuesday by major insurer Humana that it’s exiting next year due to heavy losses.
The changes are a key way for Trump and Republicans to tweak the Affordable Care Act more quickly than changing it through the legislative process, which is taking longer than they’d originally promised and may be gummed up by growing GOP divisions for how to approach it all.
It also allows Republicans to tell constituents they’re taking immediate steps to improve the healthcare law they’ve blasted for years. And it’s a way for the administration to appease health insurers, who were already struggling with sicker, more expensive marketplace patients than expected and are now unsure about what the marketplaces will look like next year if Congress upends the law.
“This proposal will take steps to stabilize the marketplace, provide more flexibility to states and insurers, and give patients access to more coverage options,” said Patrick Conway, acting administrator of the Centers for Medicare and Medicaid Services,
The 71-page rule proposed Wednesday morning contains a number of measures aimed at discouraging patients from enrolling in coverage only when they need care, and providing some more flexibility for insurers in the plans they can sell.
Under the changes, the regular enrollment season would be halved, running from Nov. 1 to Dec. 15, instead of through the end of January as originally planned. For those seeking to sign up during special enrollment periods, like if they’ve lost a job or had a baby, there would be a new process where CMS would verify their eligiblity before starting their coverage.
Insurers would also have more ability to collect past due premiums and cancel coverage for the following year when customers don’t make their payments. If customer paid their premium only in the months when they need care, the insurer could apply that premium to past debt.
The proposed rule would also lower the minimum threshold of medical expenses insurers would have to cover, across all the metal tier plans. For example, insurers must now cover at least 68 percent of medical expenses for a “silver” level plan, but could pay as little as 66 percent under the new rule.
The administration won tentative but immediate applause from the health insurance industry. Marilyn Tavenner, president of America’s Health Insurance Plans, said “we commend the administration for proposing these regulatory actions” even as her group continues reviewing the rule.
The rule notably doesn’t include changes to a ratio governing how much insurers can charge young people relative to older people. Advocates for the elderly had pushed back against the idea, as it would increase premiums for older Americans but lower them for younger ones.
The rule earned immediate praise from Republicans on Capitol Hill, who say they are working on an Obamcare replacement but haven’t yet reached consensus on how to handle some of its biggest provisions.
“Patients and families understand best the need for urgent action to repeal Obamacare,” said Energy and Commerce Chairman Greg Walden. “Today’s action represents a clear signal from the Trump administration that patient voices have finally been heard, and that health care markets will get immediate relief.”
Sen. John Barrasso, R-Wy., said Humana’s exit announcement makes the new rule even more important for assisting the marketplaces.
“Stabilization is our priority,” Barrasso said. “This rule is a first step of many as we work with the new administration to bring relief to millions of Americans.”
There’s widespread, bipartisan agreement that marketplace improvements would need to be made regardless of which party holds the White House, as insurers argued that they didn’t attract a sustainable mix of healthy and sick enrollees in order to sufficiently balance risk.
Yet while the administration said it’s working to stabilize things, some advocates for the law interpreted the move as an effort to instead undermine the Affordable Care Act, as President Trump has promised to sign legislation repealing it.
Ron Pollack, president of Families USA, a major backer of the healthcare law, said it would make it harder for healthy people to sign up and would also allow insurers to boost deductibles even higher by allowing them to shift more medical costs onto patients.
“The Trump Administration is deliberately trying to sabotage the Affordable Care Act, especially by making it much more difficult for people to enroll in coverage,” Pollack said. “By making it harder to enroll, they are creating their own death spiral that would deter young adults from gaining coverage, thereby driving up costs for everyone.”
