The Trump administration is taking its first steps to put its imprint on the Affordable Care Act, reversing plans to withhold tax refunds this year from Americans who flout the law’s insurance requirement while proposing a series of rule changes to encourage insurers to remain in ACA marketplaces.
The Internal Revenue Service has revoked an Obama-era instruction to taxpayers that was taking effect during the current filing season as a way to further compliance with the ACA’s requirement that most Americans carry health insurance or pay a tax penalty. Under the instruction, the IRS had announced that it would no longer process tax returns for people who do not send a notice with their returns that they have insurance, are exempt from the requirement or are paying the fine.
Instead, the IRS said in a statement on Wednesday, tax returns will be processed as always, even if people do not provide the required information about their insurance. IRS said the decision, made earlier this month but not previously publicized, was in line with the executive order that Trump signed hours after his inauguration, giving agencies broad authority to lighten the burden of federal rules under the ACA.
The IRS confirmed the change on the same morning that Health and Human Services officials proposed a set of rules to help protect insurers and shore up ACA marketplaces in the short term while Republicans work on demolishing the law.
The proposal drew swift praise from the insurance industry and condemnation from consumer advocates.
The rule would make it harder for consumers to buy health coverage outside of the law’s regular enrollment periods, give insurers power to deny new coverage to people late in paying their premiums and create more rigorous checks of applicants’ eligibility.
At the same time, the changes would eliminate federal reviews of whether health plans in the ACA marketplaces have enough doctors and other providers of care, delegating the task to states. And by lowering how much insurers must pick up for a specific benefit package, the changes would allow them to sell plans with higher deductibles.
Many specifics in the proposal, however, reflect concerns that have been voiced by the insurance industry long before the Trump administration assumed power – concerns that have prompted some major insurers to stop selling coverage or to curtail their participation in the ACA’s federal insurance exchange or separate, similar marketplaces run by states.
The insurers’ core concerns have centered on the “risk pool” of the approximately 10 million people who have purchased ACA health plans. Overall, they are older, less healthy and so more expensive to cover than companies had expected. But insurers also have complained about some customers waiting to buy coverage until they are sick and in need of medical services, then dropping out once they have gotten the care.
Though the president has made killing the health-care law a top priority, he and GOP leaders in Congress want its marketplaces to keep functioning in the interim so they are not tarred by consumers blaming them for an abrupt loss of insurance.
On Tuesday, Humana announced that, after cutting back on its ACA participation in 2017, it plans to fully withdraw from the marketplaces next year. The new rule is an attempt to entice others from following suit.
HHS’s action drew swift praise Wednesday morning from the Blue Cross Blue Shield Association, which has members selling sell ACA health plans in 45 states and the District of Columbia. As other insurers have withdrawn, they are the only insurer available in about one-third of the nation’s marketplaces.
“These proposals would help stabilize the current individual market and are a good start toward improving the functioning of the marketplace, so that any longer-term reforms can begin on a better footing.” said Alissa Fox, the association’s senior vice president for policy.
But Andy Slavitt, the Obama administration official who was the top official for the Centers for Medicare and Medicaid Services, which carries out much of the ACA, quickly denounced the proposed changes. Slavitt predicted that the altered rules would “raise deductibles, reduce access to physicians and put limitations on the ability for people to get coverage.”
Slavitt said that the new administration “has created a manufactured crisis with talk of repeal but no plan to replace, non-enforcement of the rules and reducing outreach around HealthCare.gov so fewer people would sign-up for coverage. If the administration is serious about strengthening the marketplace, they will reduce uncertainty and focus on keeping the marketplace stable and growing.”
Ron Pollack, executive director of the advocacy organization Families USA, had an equally harsh reaction, calling the proposed rule “a huge step backwards.” The changes “are actually going to make health coverage and care a whole lot more expensive for consumers, and they are going to result in fewer people being able to get people enrolled in coverage,” he said.
America’s Health Insurance Plans, the industry’s main trade group, did not address any of the proposed specifics in a late-morning statement. President and CEO Marilyn Tavenner said, “We appreciate the Administration’s efforts in proposing policies intended to address stability, affordability, and choice, helping consumers get the coverage they need.”
Some aspect of the proposed rule would strengthen steps the Obama administration already had taken. For instance, that administration last year limited the circumstances under which people could qualify for “special enrollment periods” outside the normal enrollment season. But the Trump administration proposal would require greater proof of eligibility for such an exception.
It also would require proof up front that an individual is eligible for ACA coverage, rather than doing certain kinds of screening – such as for immigration status – after the fact. The new rule would require the 39 states relying on the federal HealthCare.gov website to screen the eligibility of every application, instead of just half of applicants.
Other aspects of the rules go far beyond what the Obama administration contemplated, such as in eliminating federal checks on whether health plans have enough doctors and other care providers.
Starting in 2018, the rule also would shorten the annual enrollment period for consumers to sign up for ACA health plans from three months to six weeks: Nov. 1 to Dec. 15.
(c) 2017, The Washington Post · Amy Goldstein
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