Executive Action on the ACA
Published on: October 17, 2017
After Congress repeatedly failed to pass legislation to
repeal and replace the Affordable Care Act (ACA), President Trump used the
power of the executive branch to make two significant changes to the law, both
of which could have a substantial impact on access to care.
First, President Trump signed an executive order that seeks
to increase competition by facilitating access to association health plans
(small businesses can join together to purchase insurance coverage through
associations), short-term limited duration insurance products (plans that last
less than a year), and health reimbursement arrangements (employers can give
employees money to purchase insurance rather than provide it directly).
Nothing is changing immediately; rather, President Trump has directed several
government agencies to draft regulations to implement these new policies over
the next 60 to 120 days. Experts disagree about whether and how these policies
can be implemented via regulation, so it is not clear what the effects will
be. Since association health plans and short-term insurance products do
not need to follow a number of ACA patient protections, including the
requirement for the essential health benefits, they could appeal to younger,
healthier people who seek skimpier, less expensive coverage. This would
raise costs for people who need comprehensive coverage.
Secondly, after months of threatening to do so, the Trump
Administration announced its decision to end the cost-sharing reduction (CSR)
payments to insurers. The CSR payments were set up as subsidies to insurance
companies to help pay out-of-pocket costs for low-income individuals, available
to people with incomes of 100 percent to 250 percent of the federal poverty
level. Currently, about seven million
people benefit from the CSR payments but the change could destabilize the
marketplace and force insurers to drastically increase premiums, impacting
millions of others not currently benefiting from these payments. In August, the
Congressional Budget Office estimated that if the CSR payments were stopped,
premiums would increase by 20 percent in the following year.
The move also put pressure on Congress to provide money for
the CSR payments. Senator Lamar Alexander and Senator Patty Murray, the ranking
Republican and Democrat on the Senate Health, Education, Labor, and Pensions
(HELP) Committee, revealed bipartisan legislation that would allow for the
subsidies to continue while allowing states more flexibility to waive some
requirements of the ACA. Specifically, the legislation funds the CSR payments
through 2019 and expands access to catastrophic plans, or copper plans.
Currently, these plans are only available to individuals under the age of 30 or
those who qualify for an economic hardship waiver but the new legislation would
allow anyone to buy these plans, regardless of age or income level. Copper plans have very high deductibles but
very low monthly premiums and those who purchase them are not eligible for tax
credit subsidies. While President Trump originally expressed support for the
legislation, he also indicated that he cannot support a federal bailout for
insurers. Due to the mixed signals, it is unclear where the Administration
stands on this bill.
All of this comes
less than three weeks before the start of the open enrollment season for the
ACA. ASH will continue to monitor this process and will send
updates as necessary.
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