Changing the rules - Obamacare

Changing the rules - Obamacare

Mon, 12/03/2018 - 20:27

The Trump administration could not repeal the Affordable Care Act. They are left with rule changes as a means to whittle away at the ACA.

Change rules of the game

New guidelines to hurt the ACA

The Trump administration is now encouraging states to take the lead in attacking the Affordable Care Act. To assist in this effort Ms. Seema Verma, administrator of the Health and Human Services Centers for Medicare and Medicaid Services, just released new ACA guidelines.

Until now, the administration has focused on bending the ACA’s rules for health plans. They have rewritten regulations to make it easier to buy skimpy health plans that are relatively inexpensive because they do not contain all the benefits and consumer protections that the ACA typically requires.

The new rules go further by undercutting the basic ACA structure of the individual insurance marketplaces created for those who cannot get affordable health benefits through a job.

According to advice issued Thursday by federal health officials, states would be free to decide how subsidies can be used. States could allow the subsidies to be used for skimpy health plans that do not meet minimum standard set by the ACA.

♦ The final rule is scheduled for publication in the Federal Register on April 17, 2019.

Earlier the administration eased restrictions on short-term, limited-duration insurance and association health plans, which are exempt from some of the ACA’s requirements. These plans along with skimpy plans are not attractive for someone that qualifies for a premium subsidy.

People receiving a subsidy would stay with a marketplace plan because of lower cost and better benefits. This runs counter to the administration’s goal of undermining the marketplaces.

These new rules would allow someone with a subsidy to use the money outside of the marketplaces, allowing a person to purchase less robust health plans at lower cost while at the same time weakening the exchanges.

The guidelines may not be legal and are in the least not likely to be valid since they are an attempt to go around the formal steps required to change federal regulations. Still, the administration is proceeding in telling states to have at it.

Two top House Democrats, Reps. Richard E. Neal (Mass.) and Frank Pallone Jr. (N.J.) contend that the guidelines are illegal. They wrote that the suggestions that Ms. Verma made “exceed the secretary’s statutory authority” and are “contrary to the plain language” of the ACA.

Larry Levitt, of the nonprofit Kaiser Family Foundation, commented that the administration is using executive powers to let states “move in the direction that efforts to repeal and replace the law laid out last year.”

Some of the administration’s changes are even more profound than the failed efforts on Capitol Hill. For instance, an amendment sponsored by Sen. Ted Cruz (R-Tex.) would have let insurers offer health plans that fall short of ACA rules. But it would not have let ACA subsidies be used for such plans, as CMS is now encouraging.

♦ Of course many legal challenges will be filed once a state actually takes Ms. Verma up on her offer.

A foundation of the Affordable Care Act is federal subsidies to use to purchase health insurance. And the basic requirement that federal subsidies can only be used to buy health plans in marketplaces created under the law, such as the federal marketplace or state run marketplaces.

Under the new rule, states could also set up schemes to allow people with employer sponsored coverage to use federal subsidies along with funds from their employer or even in combination with tax-deferred savings accounts.

The Trump administration is clearly hoping some states will bite on this offer in the belief that it will undermine the Affordable Care Act. And it will, since it will pull funds away from the marketplaces thereby driving up costs. But will it break the ACA?

♦ The goal of the Affordable Care Act is to help people using the individual insurance market because they do not have access to affordable health benefits through a job.

Before the ACA, insurance companies commonly discriminated against unhealthy people or sold plans that did not cover much of anything. The ACA changed that by imposed requirements on benefits, prohibiting insurers from charging more to people with preexisting conditions and created a federal health exchange and similar state-run marketplaces in which private insurance companies compete for customers.

Ms. Verma said that plans that states come up with would still need to continue to protect people with preexisting medical conditions from higher prices or being denied coverage.

It is hard to rationalize Ms. Verma’s comment given that the Trump administration is working with a Texas lawsuit to do just that – do away with preexisting conditions protection.

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