On his way out of the White House, President Donald Trump is taking one last swipe at the Affordable Care Act, proposing to allow states to opt out of the Obamacare exchanges where millions of Americans enroll in health insurance plans.
If states choose this potential new option, residents would no longer have access to a one-stop shop for health insurance. Instead, they would have to find their way to private insurance brokers or individual carriers.
They also wouldn’t have access to impartial advisers, so-called navigators, to assist them in making their choices.
The rule, proposed on Thanksgiving Eve, is one of the last attempts by the Trump administration to undo the ACA. Trump failed to kill President Barack Obama’s signature law in Congress, but is still attempting to do so in a case heard by the U.S. Supreme Court last month. Through administrative acts, Trump has been able to chip away at the law.
The federal Centers for Medicare and Medicaid Services (CMS) said the proposed rule, which still must go through a public comment period, would increase enrollment in health insurance and decrease premiums by encouraging competition and innovation. CMS claims that if adopted, the rule “would enable a more curated, customized consumer experience.”
Critics complain the Trump administration is trying to rush the proposed rule before Trump leaves office Jan. 20. By accepting public comments only until Dec. 30, there’s an increased likelihood that the administration could adopt a final rule before President-elect Joe Biden is inaugurated. In the past, the process for rules like this one has taken three to four months, according to an analysis by the Center on Budget and Policy Priorities, a liberal think tank in Washington, D.C.
The heart of the proposal is modeled after a Georgia plan CMS approved last month that is almost certain to be challenged in court. The Trump administration wants to give all states the opportunity to follow Georgia’s path.
Critics insist the new rule would actually do the opposite of what CMS claims, diminishing enrollment and increasing customer costs while raising the likelihood that individuals and families end up in substandard plans that leave them with gaps in coverage in the event of illness or injury.
“Allowing states to privatize the ACA by eliminating any public marketplace would likely reduce overall enrollment and would surely lead to massive disruption and consumer confusion,” said Joel Ario, managing director with the consulting firm Manatt Health and former director of the Office of Health Insurance Exchanges in Obama’s Department of Health and Human Services.
The Georgia Department of Community Health, whose plan is the model for CMS’s proposed rule, claimed in an email that the change will lead to "improved access, affordability and quality of healthcare statewide.”
Opponents insist that under the new plan, Georgians will end up losing coverage and find health insurance less affordable and comprehensive.
While analysts say the incoming Biden administration could block the national rule, “It’ll distract from other policies and guidelines” at a time when the administration should be giving full attention to the COVID-19 pandemic, said Yvette Fontenot, a former Obama health adviser.
Fourteen states and Washington, D.C., operate their own health insurance exchanges. The rest of the states use the federal site, Healthcare.gov, customized to the market in each state, or partner with Healthcare.gov. The Trump proposal would give all states the opportunity to choose the new option.
This year, nearly 11.5 million Americans signed up for insurance on the exchanges, which provide a side-by-side comparison of nearly all the ACA-compliant plans offered in each state. Consumers also can find out about federal subsidies they might receive.
All the exchanges used to provide navigators and engage in marketing to boost enrollment, especially in minority communities. But in 2018 the Trump administration eliminated almost all funding for Healthcare.gov navigators and marketing, so now only state-based exchanges have money for those functions.
The exchanges also determine eligibility for Medicaid, the public health plan for the poor. Consumers who qualify are enrolled or passed on to a state website where they can sign up.
The Trump option would strip down the exchanges to a basic listing of insurance plans and perhaps contact information for private brokers or insurance carriers. There would be no comparison of plans, no enrollment option and no guidance. Under this “direct enrollment” approach, brokers could limit options to the carriers they represent, instead of having to present all ACA-compliant plans.
Direct enrollment is already permitted in states that use Healthcare.gov. According to CMS, one-third of people enrolling in individual commercial plans (as opposed to employer-sponsored health plans) do so through direct enrollment. Most enrollees prefer to use the exchanges.
Jessica Altman, insurance commissioner for Pennsylvania, which launched a state-based exchange this year after using Healthcare.gov since 2014, said she was certain her state would not choose the direct enrollment option.
“One of the core values of the ACA is making sure people are given the opportunity to truly shop and see all the plans with fair, accurate and impartial information,” she said, which would not be the case with direct enrollment entities.
Unlike the navigators, Altman said, brokers would have an incentive to push consumers toward policies that offer the greatest commissions.
She is particularly concerned that brokers seeking high commissions would point consumers to short-term plans, which usually don’t offer the comprehensive coverage of ACA-compliant plans, such as protections for pre-existing conditions. Such plans, which the Trump administration made legal, often leave patients with huge bills for services.
Medicaid-eligible people are likely to be especially susceptible to that pressure, Altman said.
“There will be a lot of opportunities and perhaps pitfalls for consumers to be directed to plans that don’t meet QHP-certified standards,” said Christina Cousart, a senior policy associate at the National Academy for State Health Policy. (“QHP” stands for “qualified health plan,” one that an exchange has deemed ACA-compliant.)
But Ed Haislmaier, a health policy researcher at the conservative Heritage Foundation, said that in a few scattered cases around the country, insurance carriers with ACA-compliant policies did not join the exchanges. Direct enrollment would make it easier for consumers to purchase policies from those companies, he said.
Overall, he said he thought the effects of the proposed rule would be “pretty marginal.”
Others disagree. “I think the advantage of an exchange is that it offers [an] apples to apples shopping comparison experience,” said Johanna Fabian-Marks, director of policy and plan management of the Maryland Health Benefit Exchange.
“It’s important to have detailed information impartially offered on all plans offered. When you lose that hub approach it can make it potentially more confusing for consumers to navigate and compare the options.”
She said Maryland would not be interested in a direct enrollment option.
Other aspects of the rule also would be detrimental, critics say. The rule would raise annual out-of-pocket maximums and change other accounting formulas, leading to higher consumer costs for commercial health insurance policyholders, including those with employer-sponsored plans, according to Tara Straw of the Center on Budget and Policy Priorities.
Researchers there estimate that the changes sought by the administration could increase an individual’s average out-of-pocket expenses by $400 in 2022; a family’s average expenses would increase by $800.
The administration also wants to further lower the fees insurance carriers pay to be included on the exchanges. CMS argues the reduction would allow insurers to lower premiums, but those fees also help cover the operating expenses of Healthcare.gov.
Overall, Pennsylvania’s Altman said she sees no logic to the administration’s proposed rule. “What’s the point when the exchanges are already out there with carriers competing for business and without the risks that come from diverting consumers to inferior products and not presenting them with their full options?”