The Health 202: Trump Health Officials Rewrite Big Obamacare Rules

(c) 2018, The Washington Post.

WASHINGTON - The Trump administration is trying its darndest to rewrite Obamacare since Congress has largely failed to erase it. Officials Monday took their biggest steps yet to roll back the health-care law’s regulations, showing they’re intent on dampening the law’s effects wherever possible.

States will get much more wiggle room in determining whether plans are generous enough to meet Affordable Care Act standards. Some insurers could be allowed to spend more on overhead. And more Americans may duck the law’s individual mandate to buy coverage. That’s all according to a massive, final notice the Centers for Medicare and Medicaid Services issued late Monday afternoon.

“Ultimately the law needs congressional action to repeal, but until the law changes we won’t stand idly by as Americans suffer,” CMS Administrator Seema Verma told reporters on a phone call.

The latest move can be seen as part of the administration’s strategy of shrinking the ACA as much as possible while remaining within its legal boundaries. We’ve seen several efforts by President Donald Trump and Health and Human Services officials to ease what they view as egregious insurer regulations that are boosting premiums, including an expansion of alternative health plans not subject to the same ACA rules.

The CMS rule contains a final kick out the door to the law’s individual mandate. Congress repealed its penalty in December’s tax overhaul but it stays in effect through the end of this year. Now the new rule expands the list of reasons people may be excused from buying coverage.

Americans living in counties with only one or no insurers can apply for a “hardship exemption” from obtaining insurance. That could amount to a hefty crowd, since about one in four ACA enrollees in 2018 had access to just one marketplace insurer.

“The fact that the scramble to find issuers has become a yearly tradition is an example of the failure of the Affordable Care Act, and we don’t think Americans should be punished because they don’t have choices,” Verma said.

Consumers can also avoid the mandate if the only plans available to them cover abortion services, a nod to antiabortion conservatives who have long protested that federally subsidized marketplace plans are allowed to cover abortions on their own dime.

As for the sweeping new coverage rules, they’ll apply starting in 2019 to the individual insurance plans being sold on and state-run marketplaces, where about 10 million people buy coverage. CMS is seeking a whole bucket of wonky changes, but a few of the bigger ones could significantly affect the benefits consumers are guaranteed when they shop for a marketplace plan.

For example, consider the ACA’s “essential health benefits” - 10 categories of care that insurers must cover to ensure customers get access to a full range of benefits. The EHBs were a major flash point in the repeal-and-replace fights on Capitol Hill; Republicans said they hiked premiums while Democrats said EHBs protected consumers.

Under the old rules, states had to base the 10 categories on a single plan sold within their borders. Under the new rules, states won’t be constrained to such a limited, fixed menu. Instead, they can select a la carte from among various plans, including those sold in other states. For example, Ohio could choose the maternity care standards from one benchmark plan and the mental-health services from another. Wisconsin could choose the benchmark plan from North Dakota or New Jersey or Virginia.

There’s another big tweak in store for insurer regulations. While the health-care law requires most insurers to spend no more than 20 percent of premiums they collect on overhead, the new rule makes it easier for states to request a higher ratio for insurers if they can show the change would help stabilize premiums.

Watch for Trump and Republicans to sell these changes as consumer-friendly. They could help insurers tweak premiums downward by selling leaner plans that cover fewer benefits. “This will give states greater ability to ensure insurers can offer Americans more choices,” Verma said.

But these changes must be weighed against other revisions to the ACA - some initiated by Congress and some initiated by the administration - that could push premiums in the opposite direction.

Repealing the individual mandate will result in premiums about 10 percent more expensive, the Congressional Budget Office has projected. And Congress’ failure to fund extra Obamacare payments to insurers, through two channels known as cost-sharing reductions and reinsurance, would push “silver plan” premiums 25 percent higher by 2020, per the CBO.

So even if the administration is right, and easing Obamacare rules does put downward pressure on premiums, it probably won’t be enough to counteract the upward pressure on premiums resulting from other GOP-led actions and the very structure of the ACA, which President Barack Obama and Democrats passed in 2010.

“Congress funding a reinsurance program would likely have a much greater effect on the premiums than the changes in this particular rule,” said Elizabeth Carpenter, senior vice president at the consulting firm Avalere.


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