While Congress struggles to replace Obamacare, the Trump administration is moving to reshape health insurance on its own
With congressional Republicans struggling to develop an Obamacare alternative, the Trump administration is taking steps on its own to loosen government regulation of the nation’s health insurance markets, a longtime conservative goal.
Administration officials said the moves — which were detailed in proposed regulations released Wednesday — are necessary to stabilize Obamacare marketplaces that have been shaken over the last year by rising premiums and insurer exits.
But the Trump administration’s moves to relax rules on insurers appear likely to shift additional medical costs onto patients by promoting higher-deductible health plans.
The proposed regulations also set the stage for potential reductions in government aid to low- and moderate-income consumers, another policy favored by GOP leaders, including Trump’s new Health and Human Services secretary, Tom Price, a fierce advocate for reduced federal healthcare spending.
The moves drew criticism from many consumer and patient advocates worried that the Trump administration is undermining key protections established by the Affordable Care Act.
Chris Hansen, president of the American Cancer Society’s advocacy arm, warned that the new rules could make essential medical care harder to find for many needy patients.
“While American Cancer Society Cancer Action Network appreciates efforts to strengthen the marketplace, those efforts need not weaken access to meaningful health insurance for cancer patients and survivors,” he said.
The Trump administration has proposed, among other things, to loosen rules that set minimum standards for the size of health plans’ provider networks and for how much of patients’ medical bills must be covered.
Price, who took over the Health and Human Services Department last week, called the new regulations “initial steps in advance of a broader effort to better serve the American people.”
Insurance industry groups cautiously praised the proposal, which the Blue Cross Blue Shield Assn. said “would help stabilize the current individual market and are a good start toward improving the functioning of the marketplace.”
The Trump administration began working on the new regulations soon after the inauguration amid rising anxiety about the future of insurance marketplaces established by the 2010 healthcare law.
The state-based marketplaces, a centerpiece of the law, allow Americans who don’t get coverage through an employer to shop for plans that must meet basic standards.
Insurers cannot turn away patients who are sick. And low- and moderate-income consumers can qualify for government subsidies to offset the cost of their premiums.
About 11 million people current rely on the marketplaces. And surveys suggest that most consumers are happy with their coverage, even though some face very high premiums.
But the high number of costly, sick customers who enrolled in coverage surprised many insurers, prompting some to dramatically raise premiums this year or exit the marketplaces altogether.
That has prompted calls from industry officials for new rules to stabilize the marketplaces.
The Obama administration was considering some, and Democratic nominee Hillary Clinton indicated that she too wanted to take steps to get more young, healthy people to enroll in the marketplaces.
Some of the Trump administration’s proposals — outlined in a highly technical, 71-page proposed regulation — reflect ideas that have been under discussion since before the November election.
These include tightening the rules for when people can sign up for coverage. Insurers have complained for years that too many consumers have been gaming the system and signing up for coverage only after they get sick.
Under the proposed new rules, people will be allowed to sign up outside the annual enrollment period only if they can prove they qualify because of a life-changing event, such as a move or the loss of a job. Similar standards exist in most employer-provided health plans.
The administration is also proposing to cut next year’s open-enrollment period from three months to six weeks.
The Trump administration is pushing other proposals, many favored by the insurance industry, that loosen key standards that health plans must now meet.
For example, under current regulations, insurers must offer plans that cover a minimum share of patients’ medical expenses.
A silver plan — one of four categories of plans available on marketplaces — must currently cover between 68% and 72% of patients’ anticipated medical costs.
But the Trump administration is proposing that these plans could cover as little as 66% of patients’ expenses.
The administration said this change would allow insurers to design more affordable health plans. “We anticipate that this flexibility could encourage healthier consumers to enroll,” the proposed regulation states.
But this change, though seemingly small, could allow larger deductibles that leave patients with a bigger share of their medical bills.
The Trump administration acknowledged the looser rules could make patients pay more. “The proposed change … could reduce the value of coverage for consumers, which could lead to more consumers facing increases in out-of-pocket expenses,” the rule notes.
Loosening regulations has been a key goal of Price and other Republicans, who have argued that doing so will lead to lower premiums and more choices for consumers.
Lower-cost health plans that cover less also could affect the value of government aid that is available to low- and moderate-income shoppers.
That is because subsidies are pegged to the cost of less expensive plans available on the marketplaces. If those plans drop even further, the subsidies would be reduced as well.
That prompted analysts at the Center on Budget and Policy Priorities, a left-leaning Washington think tank, to warn Tuesday that many consumers could soon face a difficult dilemma.
“The rule would force millions of families to choose between higher premiums and worse coverage,” analysts concluded.
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