As I predicted President Trump started is attempt to dismantle the Affordable Care Act. In a front-page story, the New York Times reported that on Thursday, President Trump signed an executive order which “clears the way for potentially sweeping changes in health insurance, including sales of cheaper policies with fewer benefits and fewer protections for consumers than those mandated under the Affordable Care Act.”
When it comes to health care, President Trump says he’s doing “the right thing” for Americans. He’s willing to work with Democrats on a bipartisan plan, he says, after at least three failed attempts by the Republican-controlled Congress to repeal and replace the Affordable Care Act.
At the same time, he’s using the power of the presidential pen to unravel the ACA piece by piece — which could affect health care coverage for more than 11 million Americans.
It’s the government’s responsibility to enforce the law, just as it is for it to enforce laws that pay for the military, education or law enforcement. If the administration doesn’t follow through on the parts of the law that make it work, the program could fail.
Yet Trump has consistently denied his administration is playing any role, instead blaming his predecessor, former president Barack Obama, for all of the health care law’s problems. While Trump has called for the government to “let Obamacare fail” to pressure lawmakers to come to the bargaining table, his latest moves suggest he’s actually serious about following through.
Trump took his most concrete step to dismantle the ACA on Thursday, as he signed an executive order that would allow insurers to sell short-term plans that don’t meet the ACA. “Since I became President of the United States, I just keep hearing ‘repeal and replace, repeal and replace.’ Well, we’re starting that process,” Trump said, promising the order would be the first of many steps. But he didn’t stop there.
Late last Thursday, the White House announced its plans to “immediately” halt payments to insurers under the Obama-era health care, saying the government cannot legally continue to pay because they lack a formal authorization by Congress.
Current law allows people to purchase short-term plans for three months, but these would cover people for up to a year. Under the order, consumers could also purchase their health plans as part of associations of small businesses or individuals and across state lines, going around Congress.
All of these devices would make Obamacare alternatives more available and attractive, which is why the law’s supporters are concerned that they’ll lead to the kind of bare-bones catastrophic policies the Affordable Care Act outlawed. If young, healthy consumers helping to subsidize older, sicker patients pull out of state exchanges, which will result in even higher premiums for the Obamacare plans.
Also at the heart of the problem is the administration’s refusal to commit to paying insurance companies subsidies to reduce the cost of buying insurance for Americans who don’t make much money, and creating uncertainty about whether the government will continue to require people to buy insurance or pay a penalty on their taxes.
The failure to do those two things sucks money out of the insurance market, meaning insurance companies have to find the money to stay in business other ways – such as raising the cost of insurance for those who can pay. And if the companies can’t find the money to break even on their expenses, they could stop selling insurance in parts of the country.
Trump has also halved the time in which people can buy health insurance starting Nov. 1, cut the national advertising budget and grants for “navigators,” who help show people how to buy insurance. And the federal website used to buy insurance for 39 states will be closed for maintenance for up to 12 hours every Sunday, a peak shopping day.
“It’s hard to look at that series of decisions, which is entirely in the hands of the administration, and say they want anything other than this to be a miserable failure,” Kathleen Sebelius, Obama’s first Health and Human Services secretary, said.
“It reminds me of the Wizard of Oz when the witch kept throwing out these things like flying monkeys,” said Katherine Hempstead, senior adviser at the nonpartisan Robert Wood Johnson Foundation. “It’s like what other thing things can we think of, what grenades can we launch at this market?”
Trump says his Executive order will make cheaper health insurance available to more consumers. For self-employed people who earn more than 400% of the federal poverty limit – about $65,000 for a family of two – it will also give them a chance to buy insurance that doesn’t cover things they don’t want.
Many women past childbearing age, for instance, have complained about having to buy plans that cover childbirth, says health economist Gail Wilensky, who headed the Centers for Medicare and Medicaid Services under President George H.W. Bush.
But it will also cut the market in pieces, said Eliot Fishman, senior director of health policy at Families USA, which supports the law. People who need more expensive coverage will be forced into one market, while those who don’t want to buy it will go into another market. That would undermine the entire system, which depends on young, healthy people paying to offset the costs of insuring those with various medical conditions.
What’s more, critics say that allowing people to purchase short-term plans skirts mandates for “essential health benefits” coverage such as maternity care, and discriminates against people with preexisting conditions.
What about the subsidies? Before the White House’s announcement late Thursday, Trump could have helped stabilize the market and lower expected premium increases by guaranteeing to pay the subsidies that insurers use to cut out-of-pocket costs for customers. He could have also emphasized that the Internal Revenue Service is enforcing the law requiring those who don’t buy insurance to pay the tax penalty.
Now, however, the administration decides each month whether it will keep paying the subsidies. A report on insurance rates in 20 states by the nonpartisan Kaiser Family Foundation found that uncertainty about the individual mandate and subsidies is the biggest reason for companies deciding to raise prices.
The administration’s refusal to make longer-term commitments to subsidies and the mandate is meant to cut the number of people buying insurance in the federal market, said Hempstead.
The congressional spending plan passed earlier this year doesn’t include a set amount of money for the subsidies, but the money could be included in bills passed by the end of the year to pay for community health centers or the Medicaid plan for children, Wilensky said.
The White House has not participated in discussions in the Senate to fix the subsidies and reduce premiums, said an aide close to the negotiations between Sen. Lamar Alexander, R-Tenn., and Sen. Patty Murray, D-Wash., who spoke under condition of anonymity because they weren’t authorized to speak publicly about the meetings.
Insurance companies will raise the cost of buying insurance for customers if they do not know for sure that they will get money from the government to make up for their overall expenses, said Sebelius. That’s the main reason for higher rates, she said.
However, healthcare economist Wilensky noted that problems with higher rates and insurance companies dropping out of the system were happening before Trump was elected.
In September, the Trump administration cut by as much as 90% the amount of money it spends on navigators, the people who help customers buy insurance. That was considered by experts as another form of sabotage.
Trump has said he wanted to make it easier to buy insurance without navigators.
That can be done by relying on “trained agents and brokers” to sell insurance and making it easier to use Healthcare.gov to buy insurance, says Christopher Condeluci, who helped write part of the law as a Republican counsel for the Senate Finance Committee. Money once spent on navigators will go to information technology and people to help with the new version of the site, although Condeluci says it will not be ready for the next fall’s open enrollment.
That strategy has the problem of insurance companies cutting or even eliminating brokers’ commissions as a way to discourage selling ACA plans. Reduced commissions, Health Agents of America CEO Ronnell Nolan says, means brokers spend too much time helping customers use the glitchy Healthcare.gov for little or no money.
Many agents now will not know until a week before the open enrollment period starts if they will receive commissions or how much they will be.
Uncertainty, says Fishman of the pro-ACA group Families USA, is the only constant. “We have never experienced an open enrollment in which the administration is trying to sabotage the system,” he said. “We are in uncharted territory.”
Shannon Firth correspondent for MedPage reported that President Trump’s executive order Thursday will allow small businesses and trade groups to form associations and buy health policies sold outside their own states.
“This would open up additional options for employers to purchase the health plans their workers want … The competition will be staggering. Insurance companies will be fighting to get every single person signed up and you will be hopefully negotiating, negotiating, negotiating and you’ll get such low prices for such great care,” said Trump during a press conference in the Oval Office.
The new order calls on the Secretary of Labor to consider ways to expand access to “association health plans” (AHPs), which enable individuals such as those with a common profession or interest to be counted as a large group and to buy plans across state lines.
With the Employment Retirement Income Security Act (ERISA) interpreted more broadly, employers in the same general business anywhere in the nation could team up to offer healthcare coverage to employees, by forming AHPs through “existing organizations” or newly created groups “for the express purpose of offering group insurance,” a White House press release noted. AHPs also wouldn’t be required to meet the Affordable Care Act’s essential health benefit requirements.
“Expanding access to AHPs would provide more affordable health insurance options to many Americans, including hourly wage earners, farmers, and the employees of small businesses and entrepreneurs that fuel economic growth,” noted the executive order.
Trump also directed the departments of Treasury, Labor, and Health and Human Services to look for ways to increase coverage through “short-term limited duration insurance” that sidesteps Obamacare mandates and regulations.
People who would benefit the most from such an option are those in counties with only one insurer on the exchange, the release said.
In addition, the order calls for changes in health reimbursement arrangements — pre-tax, employer-paid dollars that employees can use to pay health expenses such as co-payments and deductibles.
Trump’s action comes just weeks after Republicans in Congress failed to repeal the Affordable Care Act or even bring the most recent Graham-Cassidy repeal-and-replace bill to the floor for a vote.
Critics of the president’s actions, including state insurance commissioners, say it will gut consumer protections and bifurcate the individual market. Most view the measure as another attempt to undermine the Affordable Care Act exchanges and fulfill a campaign pledge.
Proponents, however, say it will increase competition and help those who don’t receive subsidies on the exchanges access more affordable insurance.
On Thursday, Sen. Rand Paul, MD (R-Ky.), a vocal proponent of association health plans, penned an op-ed in Breitbart explaining in greater detail how these new plans would work.
AHPs could benefit millions of people including low-income restaurant workers, he wrote. As an example, he suggested the National Restaurant Association could form a national AHP and use its size to squeeze insurers, thus reducing premiums.
Paul wrote that the action gives these individuals an “escape route to group insurance” which provide a similar type of “large group, cross-state ERISA” plan that “most employees love.”
“Association Health Plans will be among the biggest free-market reforms of healthcare in a generation, and it will do more to counter the impact of Obamacare than most of the repeal bills did because it will actually go after regulations that the legislation didn’t touch due to Senate rules,” he wrote.
Paul estimated that the plan would take six months to a year to implement.
“Long on propaganda. Short on details. Plenty of sabotage,” tweeted Andy Slavitt, former acting administrator for the Centers for Medicare and Medicaid Services under President Obama, in response to the order.
Other policy experts were also critical. “Association health plan ideas are about nothing more than rearranging the deck chairs on the Titanic because they only create a new risk pool designed to attract the youngest and healthiest out of the current state-run insurance pools … Overall, there is no reduction in costs, only a shifting of costs from the healthiest to the sickest,” said Robert Laszewski, of Health Policy and Strategy Associates in Alexandria, Virginia, in an email.
What Now? “The executive order is the facilitating, signaling part of the process,” said Tom Miller, JD, of the American Enterprise Institute. Even without the order, theoretically, some of the proposed ideas could have been implemented through rulemaking, he noted.
“The next steps are the hard part,” he said. Agencies must still put out rules and regulations, explained Kavita Patel, MD, a practicing primary care internist at Johns Hopkins Medicine and a Brookings Institution nonresident fellow.
“We may see additional proposed regulations this year, but they have at least a 60-90 day rule process,” Patel, who served in the Obama administration as director of policy for the Office of Intergovernmental Affairs and Public Engagement at the White House, told MedPage Today.
Jeffrey Young of the HuffPost noted that the GOP still hasn’t come up with their health care program that can Repeal and Replace the Affordable Care Act. Now, what’s up for the healthcare system? Well, as I stated, good ol’ President Trump has some ideas of his own as to how to make it fail.
And the Trump administration is pulling back on the Department of Health and Human Services’ efforts to promote health insurance enrollment on the Affordable Care Act’s exchanges via HealthCare.gov. This is the latest move the administration has taken to reduce federal support for public education and sign-up assistance for the open enrollment season that begins Nov. 1 and ends Dec. 15.
These things fit into a broader pattern, dating to before Trump’s inauguration, of sabotaging the Affordable Care Act’s health insurance marketplaces through action and inaction. Trump has repeatedly declared he wants to see the Obamacare exchanges fail as a means of extracting concessions from congressional Democrats.
Executive action on association health plans could help Trump realize his goal, although at this point it’s difficult to know exactly what his administration is planning to do ― or even what the law would allow them to do.
Association health plans have been around for a long time, offering coverage to small businesses and individuals through trade organizations. Prior to the ACA’s enactment, they were subject only to state regulation, which meant their benefits and availability varied enormously.
The 2010 health care law lays down new rules for insurance companies selling to individuals and to small businesses ― like charging all consumers the same premiums, regardless of pre-existing conditions, and requiring that all plans include a set of essential benefits. President Barack Obama’s administration, through official “guidance,” made clear that all the new rules apply to the association health plans as well. But the statute itself doesn’t state that explicitly, and the Department of Health and Human Services could attempt to reverse the Obama-era guidance, legal scholars told
If that happens, association health plans, also known as AHPs, might have more freedom to sell skimpier plans that, for healthier beneficiaries, would be cheaper than plans they are buying today ― either through HealthCare.gov or state-based exchanges or directly from insurers. But the more healthy people flocked to those plans, as individuals or part of small businesses, the more carriers selling to everybody else would have to increase their premiums to reflect their new, sicker pool of enrollees.
The plans would still be subject to state regulation and some other federal guidelines, too, so analysts were scrambling on Wednesday to figure out just how far-reaching the effects could be.
“We don’t know exactly what the Trump administration is going to do on this front,” said Kevin Lucia, a research professor at Georgetown University’s Center on Health Insurance Reforms. “But if they allow AHPs to bypass the ACA’s consumer protections, like not covering maternity and other essential health benefits, it sets up an uneven playing field, destabilizes the state individual and small group markets, and ultimately puts consumers at risk.”
More immediately, the Trump administration’s push to ensure the health insurance exchanges are worse and more expensive for consumers continues apace. Trump instead could be working on ways to make signing up easier, and even making the insurance less expensive, but he and his administration have chosen otherwise. What’s more, the Department of Health and Human Services has spent money from its promotional budget for health insurance enrollment on a campaign to criticize the Affordable Care Act.
And now, the department won’t assist local enrollment groups with their outreach, education and sign-up campaigns this year ― a radical shift from the norm established by the Obama administration. According to reports from BuzzFeed News and Vox, the department notified local organizations Monday that regional Health and Human Services officials won’t be helping prepare for or carry out enrollment and promotion efforts.
This comes not long after the administration announced it was cutting funding to enrollment assistance organizations by 40 percent, a move almost sure to result in fewer consumers having access to enrollment help, and thus fewer people signing up. The administration has slashed the advertising and promotions budget for open enrollment by 90 percent, despite evidence that advertising is a big driver of awareness and sign-ups.
The administration previewed this approach shortly after Trump’s inauguration, which took place in the waning weeks of the open enrollment period for this year’s health insurance policies. The administration canceled advertisements planned and paid for by the Obama administration, which almost certainly contributed to a decline in the number of people who signed up compared with 2016.
Earlier this year, the administration published a regulation featuring a slew of changes to health insurance exchange rules, the most consequential of which is a shorter enrollment period. People in the 39 states that use the federal exchanges via HealthCare.gov will have just six weeks to enroll for 2018 insurance policies, half as long as a year ago. And the Department of Health and Human Services will take HealthCare.gov offline for as long as 12 hours every Sunday during open enrollment.
Possibly more damaging than all of that, however, have been Trump’s threats to withhold billions of dollars the federal government owes health insurance companies serving the poorest Obamacare enrollees ― and Congress’ unwillingness to do anything about it. The Affordable Care Act includes cost-sharing reductions for low-income families that shrink their out-of-pocket costs like deductibles and copayments, and the federal government is supposed to reimburse insurers for the lost money. This is in spite of the fact that halting these payments would wind up costing the federal government more than continuing them.
But although Trump has continued to make cost-sharing reduction payments to insurers on a month-by-month basis, he has refused to commit to repaying these companies in the future. This has proved a major factor in health insurance companies pulling out of the exchanges or instituting even higher premium increases next year to protect themselves against financial losses if Trump should ever follow through on his threats.
Insurers are also worried the Trump administration won’t enforce the Affordable Care Act’s individual mandate that most people obtain health coverage or face financial penalties. Weaker mandate enforcement would make it easy for healthier consumers to forego insurance, leaving health insurance companies with a sicker, costlier customer base. This concern has also contributed to higher rates for next year.
Past history showed us all that President Donald Trump couldn’t convince Republican senators to repeal and replace the Affordable Care Act, so now his administration is sabotaging it. Creating a crisis, after all, is the best tool Trump has to force Congress to act on one of his key campaign promises and overcome his most humiliating political defeat yet. Health and Human Services Secretary Tom Price is making sure that Trump’s prediction of Obamacare’s failure comes true. His latest move is slashing “grants to dozens of grass-roots groups across the nation that help enroll people in Affordable Care Act health plans, potentially crippling upcoming sign-up efforts for 2018,” my Chronicle colleague Jenny Deam reports. …
President Donald Trump couldn’t persuade Republican senators to repeal and replace the Affordable Care Act, so his administration is sabotaging it.
Creating a crisis, after all, is the best tool Trump has to force Congress to act on one of his key campaign promises and overcome his most humiliating political defeat yet.
Health and Human Services Secretary Tom Price is making sure Trump’s prediction of Obamacare’s failure comes true. His latest move is slashing “grants to dozens of grass-roots groups across the nation that help enroll people in Affordable Care Act health plans, potentially crippling upcoming sign-up efforts for 2018,” my Chronicle colleague Jenny Deam reports.
These grass-roots groups, known as navigators, focus on signing up healthy people who might not otherwise enroll in Obamacare. People with pre-existing conditions generally sign up on their own.
- By not encouraging healthy people to enroll, the Trump administration is guaranteeing that policies sold on the health care exchange will generate huge losses for insurers.
Cutting grants to navigators comes after Price shortened the Obamacare enrollment period from 90 days to 45 days and decided to cut the advertising budget by 90 percent.
Trump is clearly trying to deter people from signing up for health insurance. That means people who might have qualified for federally subsidized insurance will end up in emergency rooms without insurance when they need care.
The administration also appears ready to cut off subsidies to insurance companies that help cover the copays and deductibles of middle-class Americans. That’s prompted insurers to either stop offering plans on healthcare.gov or raise premiums dramatically.
Democrats and some Republicans want to pass a bill fixing this shortfall. Sen. Lamar Alexander, who chairs the Senate Health, Education, Labor and Pensions Committee, told The Tennessean newspaper that he is talking to fellow Republicans about a stopgap measure to keep insurance companies in the exchange.
“I’m still concerned about the next two years and Congress has an opportunity to slow down premium increases in 2018, begin to lower them in 2019, and do our best to make sure there are no counties where people have zero options to buy health insurance,” he said.
But Trump wants premiums to skyrocket. He wants insures to abandon the exchange. He wants Obamacare to fail so he can say, “I told you so.”
He doesn’t care about the millions of people who will lose coverage, or the hundreds of health care jobs that will disappear in Houston because people can’t afford to see a doctor. Easing human suffering is not nearly as important to the Trump administration as fulfilling a poorly considered campaign promise.
Many times I’ve written about Obamacare’s problems, I understand that it’s far from perfect. But addressing those failings should help expand access to affordable care for all Americans, not satisfying political supporters, many of whom don’t care because they are enrolled in that socialized medicine program known as Medicare.
Deam’s story about the administration’s latest shenanigans is yet more proof that should Obamacare fail as Trump predicted, it will be a self-fulfilling prophecy, not the failure of the program itself.
President Trump is taking the future of health insurance into his own hands.
Instead, Trump now seems to be backing health insurance reforms pushed by Senator Rand Paul of Kentucky. Paul, who opposed the Senate repeal bill, wants insurers to be allowed to sell policies across state lines and for people to be able to form groups to buy coverage.
“I believe President Trump can legalize on his own the ability of individuals to join a group or health association across state lines to buy insurance,” Paul said on MSNBC Wednesday. “This would bring enormous leverage to bringing down prices. It would also bring protection to individuals who feel left out, hung out to dry, basically.”
The concept of letting insurers sell policies in other states has been very popular among Republicans and much less popular among insurers, state regulators and consumer advocates. The basic idea is that insurers would be able to sell policies in multiple states but only have to adhere to the regulations of their home state. So an insurer from a lightly regulated state, where policies may offer skimpier benefits and lower premiums, could start marketing its plans in a highly regulated state, where premiums tend to be higher.
A handful of states already allow this, but insurers haven’t taken them up on the offer. Also, states can form compacts to open their borders, but none have opted to do so.
Supporters argue that selling across state lines would promote competition, increase consumer choice and reduce rates. Residents would have a wider array of plans to choose from that meet their health care needs and budget.
Opponents, however, say that it would split the market so that healthier folks would flock to the skinnier plans, while the sick would stay in the more comprehensive plans, pushing up their rates even more. Or, sicker Americans would flock to the states that require insurers to provide more services, jacking up premiums there.
Also, it can be difficult for insurers to set up provider networks in multiple states.
One thing that makes selling across state lines less attractive is that the Affordable Care Act mandates all insurers nationwide cover an array of benefits. So there are fewer differences between the states these days.
It’s questionable whether Trump could just wipe away state insurance rules with the stroke of a pen, experts say. Health insurance is regulated on the state level, according to federal law.
The National Association of Insurance Commissioners said it couldn’t comment until it sees the details of the proposed executive order.
“As a general matter, health insurers already have the ability to sell insurance in multiple states as long as they comply with state consumer protection and licensing laws, which many already do,” said Mike Consedine, the association’s CEO. “The NAIC has long been opposed to any attempt to reduce or preempt state authority or weaken consumer protections.”
Paul also supports association health plans which would allow small businesses that belong to a trade or professional association to pool together across state lines and buy health coverage. That would allow them to better leverage discounts and free them from mandates in specific states, he argues.
But similar types of arrangements have run into financial troubles in the past, with many becoming insolvent. Also, association health plans could also fragment the market because it could establish itself in a state with minimal regulations, but sell policies across many states without having to adhere to their rules, according to the American Academy of Actuaries. That would push up premiums in non-association plans.
In addition to the executive order, Trump also promised to return to repealing Obamacare early next year, saying he’s “almost certain” Republicans have enough votes. However, he also plans to negotiate with Democrats to “see if I can get a health care plan that’s even better.”
But again I point out that the GOP and the President still don’t have a health care plan that would replace the Affordable Care Act nor do they have any idea how to proceed. Do the work and involve people that know health care. And start working together with the Democrats.