by Kaiser Health News | Updated on 11.30.18
On his first day in office, as part of his mission to dismantle the Affordable Care Act, President Donald Trump signed an order promising to give states flexibility “to create a more free and open healthcare market.”
The administration on Thursday released an official set of examples to help states flex these powers.
It is intended to roll back key elements of Obama-era requirements, which were designed to promote enrollment in ACA plans that cover a broad range of medical needs and meet uniform national standards.
Seema Verma, the Centers for Medicare & Medicaid Services administrator, said those strict rules were seen by many as burdensome, and “virtually impossible” for states to meet.
Instead, the Trump administration wants states to innovate in ways that could produce more lower-cost options, even if those alternatives do not provide the same level of financial or medical coverage as an ACA plan.
“I’m confident states will come up with ideas that will work better,” said Verma.
Still, coupled with other ongoing efforts by the Trump administration to gut Obamacare, policy experts predict the ideas would further foster a parallel market of cheaper, less robust coverage that could draw younger or healthier consumers, but drive up premiums for those who remain in ACA market plans.
“Invariably, the coverage is going to be more expensive for people who really need comprehensive coverage,” said Timothy Jost, a retired Washington and Lee University law professor who follows the ACA closely.
One of the biggest changes signaled by the administration involves allowing states to revamp how federal subsidies are used. Currently, they are strictly targeted to lower-income Americans and are seen as key to bolstering enrollment in marketplace plans.
The Trump guidance would give states wider latitude to expand or narrow the income range eligible for subsidies, target them toward younger people or allow them to be used for less costly but skimpier types of insurance.
This would “potentially upend the subsidy structure,” said Sabrina Corlette, research professor at Georgetown University’s Health Policy Institute.
Another example would, for the first time, make federal subsidy money available to people who get job-based insurance, countering Obama-era rules that generally prohibited that. It would let states use federal dollars to fund accounts consumers could use to buy insurance or pay other health costs, such as deductibles or copayments. Employers or consumers could also add additional funds to these accounts.
Still, managing those accounts would be a large administrative expense for a state to oversee, said Corlette. “I don’t understand why a state would want to set it up,” she added.
Supporters say the examples unveiled Thursday would give consumers more control over how they choose to spend their health care dollars and the types of coverage they want to buy. They say it might also improve the markets, which are seeing declining enrollment as premiums rise.
“If states can provide larger subsidies to younger individuals to attract them to enroll, that will improve the market overall,” said Christopher Condeluci, a Washington, D.C., attorney who specializes in employee benefits and has served as the tax and benefits counsel to the U.S. Senate Finance Committee.
However, if many states follow the administration’s lead, critics say, it would bring back the days when insurance rules varied widely state by state. Consumers could end up buying skimpier plans that leave them vulnerable to high, unexpected medical bills.
While not prescriptive, the examples are designed to encourage states to innovate and apply for permission to offer more choices for consumers, so long as the proposals don’t cost taxpayers more and don’t reduce access to ACA plans, said Verma.
State proposals would still have to be affordable, comprehensive and not raise the federal deficit, she said. And CMS would pay particular attention to potential effects on low-income Americans, she added.
The administration’s examples focus on states’ health marketplaces, where insurance plans are designed for individuals who don’t get job-based coverage and small businesses. An estimated 14 million people buy their own coverage through those markets or through brokers.
Premiums in those markets have risen substantially since the law took effect in 2014, for a variety of reasons, including lower-than-expected enrollment by healthy people and actions taken by Congress and the Trump administration that removed the tax penalty for failing to have coverage, eliminated some payments to insurers and loosened restrictions on alternative types of insurance plans.
The administration’s examples add a new twist to a provision of the ACA, which gave states the option of seeking a federal waiver to develop alternative marketplace proposals.
To get one under Obamacare rules, however, states have to meet four “guardrails” established in 2015. These require states to ensure their proposals would provide equally comprehensive and affordable coverage, not result in fewer people enrolling or increased costs for taxpayers.
The examples, tapped by the administration as “waiver concepts,” build on the Trump administration guidance issued in late October to loosen those guardrails. That guidance, effective in 2020, says states have to provide access to affordable and comprehensive coverage, but will not be held to a strict tally of how many people actually enroll. So long as a state could show that equal numbers of people were buying some kind of coverage — either comprehensive ACA plans or less expensive but skimpier plans — it could pass the test.
That October announcement, and Thursday’s concepts, drew immediate criticism from ACA supporters, who said it encourages the use of subsidies to buy short-term plans, which aren’t as comprehensive as ACA coverage and can bar people with preexisting conditions.
Congressional Democrats sent a letter to top administration officials saying the process by which the changes are being made — meaning they are not following a formal rule-making process — are illegal.
“We believe this sub-regulatory guidance exceeds the Secretaries’ statutory authority,” wrote Ways & Means ranking member Richard Neal (D-Mass.) and Energy and Commerce ranking member Frank Pallone Jr. (D-N.J.). “It appears to be part of the Administration’s ideologically motivated efforts to sabotage the ACA.”
The Brookings Institution and other experts have raised similar questions and predicted a legal challenge.
“As soon as any state proceeds to go somewhere with this, there will be legal challenges,” said Jost, the law professor.
Verma pushed back against this warning, noting that the Obama administration also issued its guardrails as guidance, not a formal rule.
And, just as when the administration released its earlier guidance in October, Verma anticipated that critics would say the ideas would adversely affect people with preexisting medical conditions.
Those critics argue that anything that draws younger and healthier people out of the market will drive up costs for those who remain in ACA plans, including those with medical conditions who might be barred from buying an alternative policy, such as a short-term plan.
But Verma said that “nothing in this guidance would take away protections from people with preexisting conditions.”
Written by Kaiser Health News
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UNIVERSAL SINGLE PAYER HEALTHCARE SYSTEM NOW!
Kill Obamacare before it pushes us over a cliff.
if the ACA had been put forth by a white president the whole country would be celebrating its successes. We have more people insured, minimum standards for coverage, subsidies for those who need it, pleased Hospitals because they are left 'holding the bag' less, and healtcare costs dropping. Now we being urged to trash it. No Way! The benefits of the ACA go way further than pre-existing conditions. Support and improve the ACA, and stop trying to destroy something that is really helping us!
He’s pushing an agenda to dismantle the ACA. The ACA was an attempt to provide more uniform health care coverage but was a compromise from the start. It’s funding structure and reliance on private insurance made it rather fragile and easy to topple by “free market” types who think health care is something you can “sell” like cars or big screen TV’s at a profit. Americans I’m afraid will have to return to competing for insurance or going bare, with consequences for both them and the system. Then the problem will be addressed but it will take years and much turmoil.
The useless and dysfunctional Dims gave us this unaffordable health care. They ought to take full responsibility for their failure and try and fix it with Republicans but I don’t think they’re capable of proper legislating. Resisting isn’t working. Failures.
Repeal the ACA completely and get the government out of healthcare. Take a look at how awful the VA is and that is how well the government runs healthcare. No thanks I will take care of mine you do yours
The only way health care is to affordable is for everyone to share the cost. EVERYONE.
They’ve said they’ve had a plan to replace but let’s be honest they never did. Follow the money of donations and you’ll see why
Trump hates the ACA
This is right out the playbook of the right-wing: gut a program, create a problem, let it flounder, point to the program as a "failure", provide less than adequate privatized "solution." Corporations take another mile and regular citizens suffer.
45 is trying to kill the ACA. Universal single payer healthcare, cradle to grave.
This is not a states’ issue, this is a national issue. Trump just wants to kill everything Obama created as a personal grudge.
States have had years to plan and implement insurance plans to help citizens get insurance but they didn’t do it. The ACA put this in federal hands so that common citizens can get insurance to take care of their health that they couldn’t previously take care of...the only problem with this is that Obama is the one that pushes this and got it passed. What’s the issue? We, as citizens, pay our taxes which pay for the subsidies to allow this to happen so what really is the issue...healthcare should be a right for all US citizens that pay taxes and give back to the system!!! Quit trying to make it hard for us to get and keep insurance and make it easier!!! 🤬😡
It's not important that you want to destroy your Former President Barack Obama, and you should have apologized to him.
Trump is and always been trying to dismantle the ACA. Neither he or the GOP has offered any viable replacement that would not be injurious to millions of Americans with pre-existing conditions. While the ACA is not perfect it at least brought insurability to many people.
You need to fix the problems with ACA not do away with it do the hard work.... fix it! That's your job!
Needing medical help shouldn’t cost someone thousands of dollars. It’s being used by insurance companies, pharmaceutical corporations to make money from those in need. America is much younger than European countries... countries that offer FREE MEDICAL TO EVERYONE. It works. Americans are just crying about this because we are so over taxed & nothing is fixed. Our tax money should not be abused & if the president wants to use BILLIONS of dollars, US THE PEOPLE should approve first. I for one, cannot believe that he spent BILLIONS to send troops to the wall. That money needs to be used to fix our roads, clean up our cities, & much more! There are more important things to have done.
Keep coverage for preexisting illnesses and offer appropriate benefits for premiums paid in. As it is now, premiums are high and benefits have declined severely all thanks to the implementation of the Affordable Care Act which is anything but affordable. I will no longer take my high cholesterol medication as of the beginning of next year because my insurance company has been trying to force me into taking a less effective medication that causes me headaches. Trying to get my medication approved each year is a major ordeal and for the mental trouble it isn’t worth it. Also certain doctors have become more expensive so not going back there either. I sure hope President Trump can do a better.
SUPPORT THE UNADULTERATED FORM OF FREE HEATH CARE FOR ALL SINGLE PAYER HEALTH CARE CAUCUS PUSHED BY THE FORTY EIGHT NEW CONGRESS PEOPLE !! IT IS THE MOST FINANCIALLY STABLE AND COST EFFECTIVE VERSION !! CEASE AND DESIST FROM ATTEMPTING TO INCORPORATE EXISTING INSURANCE AND PHARMACEUTICAL AGENCIES INTO A BASTARDIZED VERSION OF THE INADEQUATE HEATH CARE THAT WE HAVE NOW !! FIGHT FOR SINGLE PAYER HEATH CARE MEDICARE FOR ALL NOW !!! OR PACK UP AND LEAVE OFFICE NOW ! YOUR CHOICE !!!
How can anyone oppose a plan that hasn’t been published or explained. No plan covers 100% of every conceivable illness. It’s disappointing to state what is the obvious. Obama care was never thoroughly evaluated, before a bunch of Democratic idiots signed a bill without reading. Thanks Pelosi. My other concern is having a professor instead of a Group of medical & business professionals to evaluate many formulas against level of care, time, medical professionals and cost. I think caping medical related lawsuits would be a big benefit. Of course attorneys in Congress would never do anything to harm the income of brethren lawyers. Of course they don’t care how laws impact Doctors. I’ll take a doctor over an attorney everyday.
A more free and open healthcare market will present a more wide array of options at a cheaper cost. Government interference is what made healthcare expensive in the first place.