The Trump administration on Wednesday proposed changes to the Obamacare individual insurance market that insurers welcomed as a good start but that others pointed out could raise out-of-pocket cost for consumers.
President Donald Trump and congressional Republicans have promised to scrap the 2010 healthcare law that is a key legacy of Democrat Barack Obama’s presidency. But they are struggling to agree on a replacement for the law, which extended health insurance to 20 million Americans.
The proposed new rule, issued by a division of the U.S. Department of Health and Human Services, sets out changes that are meant to shore up the system developed by Obama. It is unclear which elements of this system could survive in the Republicans’ replacement.
The rule does not address changes that must be made by law, such as for Obamacare’s income-based subsidies.
The changes would tighten enrollment processes and allow insurers to collect unpaid premium payments, making it tougher for people to move in and out of insurance plans. Insurers say “gaming the system” has created an unprofitable mix of healthy and sick customers.
Separately, the administration backed off implementing tougher oversight of the individual mandate, the requirement for all Americans to have health insurance or pay a fine, that was due to go into effect for 2016 taxes.
The U.S. Internal Revenue Service said as a result of Trump’s executive order to reduce regulatory burden, it will not reject tax filings for the year 2016 that fail to indicate whether they had health coverage or paid the penalty set under Obamacare. This is a return to the policy for 2015 taxes, the IRS said.
The mandate was supposed to bring in healthy customers but Republicans have vowed to overturn it and insurers say it has not worked.
Aetna CEO Mark Bertolini on Wednesday said during a Wall Street Journal forum that the Obamacare exchanges had entered a “death spiral” in which rising premiums pushed out the healthiest customers, which in turn raises rates.
Aetna cut back offering new plans for 2017 and it and Anthem Inc. have said that without changes, they might not take part after this year. Humana Inc on Tuesday said it was pulling out of this market altogether for 2018.
Bertolini said in a statement that new Health Secretary Tom Price and the Trump administration have “taken some good initial steps with the proposed regulation.” The top two industry groups, America’s Health Insurance Plans and Blue Cross Blue Shield Association, echoed that view.
Shares of insurers were mixed in the early afternoon on Wednesday with Aetna gaining 1 percent to $127.01, Cigna off less than 1 percent at $146.07 and Humana off 0.3 percent to $205.34. Anthem fell less than 1 percent to $162.90.
TOUGHER TO ENROLL
The Centers for Medicare & Medicaid Services, which are part of the Department of Health and Human Services, on Wednesday proposed the new rule that includes verifying the status of enrollees outside of the usual enrollment period.
It also proposes insurers can collect unpaid premiums from members when they sign up with the same issuer again, an incentive for people to always have insurance.
In addition, it proposed lowering the amount of guaranteed coverage for some “silver” level plans in the program, which it said could raise out-of-pocket spending and cut premiums.
It would give the states oversight of doctor and hospital networks included in the plans, reflecting a Republican theme that healthcare oversight be reduced at the federal level.
The rule proposes shortening the open enrollment period for the individual market to Nov. 1 through Dec. 15, similar to employer-sponsored insurance market and Medicare.
The weakening of the mandate and the new CMS rule making it tougher for people to sign up would have contradictory effects on premium pricing, according to Jonathan Gruber, professor of economics at MIT and one of the architects of the Affordable Care Act.
“You’re basically saying on the one hand, we have to weaken the mandate for political reasons but we have to lower prices, so we have to kick people out of the exchanges,” Gruber said.
Patient advocate Families USA said the new rules would discourage younger, healthier people from enrolling, reduce financial assistance for families and make it harder for them to find networks that include their doctors.
Republican lawmakers, who are working on an Obamacare replacement, said the rule was a start.
“If we don’t take more steps like that, having an Obamacare subsidy will be like having a bus ticket in a town where no buses run, because there will be zero choices to buy,” Senator Lamar Alexander, chairman of the Senate health committee, told reporters outside the Senate.
Wall Street said the proposed changes could help insurer profitability but it was not clear by how much.
“As one would expect tightening special enrollment periods, shortening the open enrollment period to six weeks and mandating payment of premiums before coverage should lead to an improvement in the risk pool,” Leerink Partners analyst Ana Gupte said.
(Additional reporting by Susan Cornwell and Yasmeen Abutaleb in Washington D.C. and Michael Erman in New York; Editing by Bill Trott)
NYT columnist says one of Trump’s friends begged him to talk him out of launching war with Iran
On Monday, Thomas Friedman of The New York Times spoke to CNN's Anderson Cooper, following President Donald Trump's attacks on him for calling his behavior racist in a recent article. The president accused him of "kissing [his] a**" in an Oval Office phone call.
Speaking to Cooper, Friedman denied Trump's characterization of their discussion.
"The president tweeted about a private conversation we had and lobbed in a few insults," said Friedman. "Basically, my response, which I put out on Twitter is that I was encouraged by a friend of his to speak to him after the downing of the American drone, because I thought it was wise that we not retaliate, and I thought he was wise not to retaliate, and this friend of his wanted me to encourage him in that, because he was evidently agonizing a little over that not retaliating. And I did that. I began the conversation by saying that 'I disagree with you, Mr. President on many things, but I think you did the right thing on this.' We talked for about four minutes. We also talked about China and we left it at that."
Trump is a ‘human opioid’ who feeds racism to his ‘white identity cult’: author
Democrats will lose the 2020 campaign if they treat it like a typical election and instead need to make a moral issue against President Donald Trump, author Tim Wise explained on MSNBC on Monday.
Wise is the author of the 2004 book White Like Me: Reflections on Race from a Privileged Son.
"As Democrats work on their strategy to counter President Trump ahead of the 2020 election. Anti-racism activist Tim Wise -- who helped to defeat David Duke in two campaigns in the 1990s -- provided this advice for Democrats," anchor Chris Matthews said.
He read excerpts of tweets from Wise.
Trump asked right-wing conspiracy theorist congressman to help him pick his next Director of National Intelligence
On Monday, Politico reported that President Donald Trump is consulting with Rep. Devin Nunes (R-CA) about who he should consider to replace Director of National Intelligence Dan Coats.
Nunes has led the Republican side of the House Intelligence Committee since 2015 and chaired the committee for four years, despite having no professional qualifications of any kind for that role. Since 2017, he has been known for his stunts and conspiracy theories intended to discredit the Russia investigation and throw suspicion on anyone who looks into Trump's conduct.