On Wednesday, the Trump administration proposed a new rule that has left health care experts seriously worried. Under the proposed rule, fewer people can sign up for the “special enrollment period” for the Affordable Care Act, insurers have more power in offering different levels of coverage, and the sign-up period is decreased from three months to just 45 days.
The rule is aimed to quash worries in the insurance industry that consumers were signing up for expensive health care treatments during the special enrollment period and dropping out later.
But in practice, that means Americans would have to prove they chose the special enrollment period due to major life changes. There would also be consequences to dropping out before the year is over. People would have to pay premiums they accrued for that year before enrolling next year. And insurers would have more wiggle room to design lower cost coverage for younger people, since they would be able to move away from some of the mandates for levels of coverage under the ACA.
The IRS also announced it will change its enforcement efforts on Wednesday. Although people are still required to have coverage, the IRS will stop its plans to reject tax returns if people did not say whether they had coverage. Now it will keep processing returns.
In a discussion with journalists on Thursday, former Obama administration officials rejected the claim that the new rule would do anything to provide stability, in the midst of uncertainty over the future of the health care industry.
Aviva Aron-Dine, senior adviser at the Center for Budget and Policy Priorities who previously worked as senior counselor to Health and Human Services Secretary Sylvia Burwell, said one provision in particular would harm middle class families.
“The rule allows for less generous silver plans, and since tax credits are based on silver plans, when you make plans less generous, premium tax credits buy less. That means moderate-income families — millions of them— are in the position of either having to pay more themselves in premiums or having to purchase worse coverage,” Aron-Dine said. “That is obviously bad for families, and it is a pretty striking choice for a first executive action on the ACA. But it is also extremely counterproductive in terms of market stability because the effect is to make marketplace coverage less affordable and less attractive, therefore reducing demand for that coverage and reducing enrollment.”
Andy Slavitt, a former acting administrator for the Centers for Medicare and Medicaid Services, called the rule a “net negative for consumers.”
Jennifer Sullivan, the Vice President of Programs at Enroll America, a nonprofit, nonpartisan organization with the mission of maximizing the number of Americans who enroll in the ACA, said in a statement that the new rule could create a lopsided risk pool and reduce the number of healthy Americans enrolled.
“The newly proposed policy may have unintended consequences. Those in greatest need of health care may be most willing to submit required documentation, while healthy people may be locked out of the system, further damaging the risk pool,” Sullivan said. “This regulation would increase complexity and shift costs to consumers at a time when consumers need reassurance that their coverage will be there when they need it.”
Insurers, hospital groups, and ordinary Americans alike have been expressing concern about a repeal of the ACA, and the uncertainty over whether there will be a replacement. In January, Congress voted to pass a budget resolution instructing committees to write legislation that would dismantle much of Obamacare. There is a split in the Republican Party over whether there should be a rapid repeal, or if Republicans should take a more cautious approach. The House Freedom Caucus endorsed legislation on a proposed replacement of the ACA on Wednesday, but there is still continued uncertainty.
In January, the chief executive of the insurance industry trade group America’s Health Insurance Plans, Marilyn Tavenner, said that if cost-sharing subsidies that benefit low-income Americans don’t continue, it would negatively affect insurance companies. The hospital industry warned that a repeal could result in “an unprecedented public health crisis.”
Large insurance companies are still making decisions about whether to stay in state marketplaces, where many of them are losing money. Large insurers have already pulled out of some of the ACA state marketplaces. The insurance company Humana announced it would pull out of the ACA markets next year, and was the first major insurer to do so. Anthem Inc. CEO Joseph Swedish told Wall Street analysts earlier this month that if the company doesn’t see stability into 2018, it will have to consider withdrawing as well.
As a result of uncertainty over the ACA, many Americans have stopped enrolling entirely. Enrollment in the ACA was down 4 percent this year compared to the beginning of last year.
The bill endorsed by the House Freedom Caucus, Sen. Rand Paul (R-KY)’s Obamacare Replacement Act, would likely leave millions of people covered by the ACA uninsured. Sen. Mike Rounds (R-SD), who met with Health and Human Services Secretary Tom Price, said the administration would work with Congress on legislation for a replacement, and that it may take two more months — continuing the uncertainty for even longer.