New ACA Rules Would Reduce Coverage, Raise Consumer Costs

The Trump administration issues new rules for families and children who receive insurance through the Affordable Care Act exchanges that will make it harder to enroll, increase out-of-pocket costs and reduce federal subsidies, experts said.

The rules, issued by the Centers for Medicare & Medicaid Services (CMS), would become effective for the 2018 calendar year and would not impact the way health care is delivered this year.

The rule is sweeping. It would raise consumers’ deductibles and other out-of-pocket costs, reduce premium tax credits that help millions of people buy insurance, and make it harder to enroll in coverage, according to a Center on Budget and Policy Priorities analysis. While the administration claims the changes are needed to stabilize the insurance market, many of them would weaken market stability by shrinking enrollment and making the pool of people with coverage sicker, on average, the analysis said.

The proposed rule, which is open to public comment for an unusually brief 20 days rather than the typical 60, would:

  • Raise premiums, out-of-pocket costs, or both, for millions of people. The rule would allow insurers to raise cost-sharing charges, including deductibles, in their plans while still meeting the standards used to define the different coverage levels for marketplace plans (bronze, silver, gold, and platinum).
    • The result: higher deductibles and other out-of-pocket costs for many people. These changes also would shrink premium tax credits for moderate-income people, as our new paper explains, forcing millions of families to choose between higher premiums and worse coverage.
  • Cut the time for open enrollment for 2018 coverage in half. The rule would slash the time people have to sign up for 2018 plans, ending it on De. 15, 2017, instead of Jan. 31, 2018. This would likely cause more people to miss the deadline — especially younger people, who tend to sign up later.
  • Delay coverage and limit plan choices for people using a special enrollment period (SEP). SEPs allow people to enroll in or change marketplace plans outside of open enrollment if they experience a major life change, such as losing job-based health coverage or having a baby.
  • In addition, it proposes a number of new SEP restrictions. For example, it would delay coverage for hundreds of thousands of SEP enrollees while they provide documentation of their eligibility or otherwise have it verified. (The current process allows coverage to begin while verification is taking place.) That would make it harder for consumers to get coverage when they need it, and the additional hassle would most likely deter younger and healthier consumers. In addition, most marketplace enrollees could no longer change to a different coverage tier when they experience a SEP-triggering life change during the year.

Finally, the rule would allow insurers to block consumers’ enrollment until they pay past premium debt. The rule would allow an insurer to avoid enrolling a person whose coverage was terminated in the past year unless they pay all of what they owe that insurer, rather than making sure the person has coverage while the insurer collects the money owed.

To enroll in coverage, a person might have to come up with large sum of money — a tall order for consumers with limited incomes — or be shut out of coverage until the following year’s enrollment period. And healthy people would be likelier than sick ones to forgo enrolling due to the new rule, which would weaken the overall health of the coverage pool.

Interestingly, the rule does not address the individual mandate, which has been a focus of anger towards the ACA since it was enacted in 2010. The mandate was determined as necessary to help insurers build pools of enrollees that were large enough to cover without taking a financial bath. The mandate has not worked and many insurers are exiting the ACA exchanges over issues of unprofitability.

Outlook

Although a central hot topic on Capitol Hill, there seems no blueprint on what will replace the ACA once it is repealed, probably later this year. House Republican leaders just released a set of talking points they are attempting to position as their substitute ACA. But the document reveals that House Republicans still seek to repeal the ACA without putting forward a real replacement plan.  They also intend to fast track a proposal to radically overhaul Medicaid, putting coverage for children and the poor at risk, in addition to ending the ACA’s Medicaid expansion.

Info:  https://goo.gl/E5IzRg (report).

About Frank Klimko

Frank Klimko is a nationally known journalist, grants expert and speech writer/speaker. He has years of experience helping nonprofits devise lists of the right funding opportunities and secure funding from these foundations and corporate entities. Clients have focused on an array of areas including child care, homeless, hunger and K-12 education. Additionally, he is a Freedom of Information Act expert, who has helped numerous clients with securing proprietary information from the federal government. Currently, Frank Klimko writes the Children & Youth Funding Report and Private Grants Alert, which are Washington DC-based publications. CYF is a daily publication covering Congress, the Education Dept. and the various federal regulatory agencies. PGA, another daily publication, covers the world of private philanthropy.
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