WASHINGTON – The Trump administration on Monday rewrote rules for health plans sold through Affordable Care Act marketplaces, tilting control over insurance standards from the federal government to states and handing Americans new ways to avoid penalties for failing to carry coverage.
The rules add two broad exemptions from the ACA's requirement that most consumers be insured. The change offers escape hatches that will be retroactive two years, even before a recent tax law ends the penalties completely starting in 2019.
People living in areas where only one insurer is selling plans in the marketplace now can qualify for a "hardship exemption." So can people who oppose abortion and live in places where the only available plan covers abortion services. Federal health officials and private researchers have shown that about half of U.S. counties have only one ACA insurer this year.
In announcing the rules, which take effect for ACA health plans to be sold this fall for 2019 coverage, the head of the Centers for Medicare and Medicaid Services continued the administration's denunciation of the law.
"Until the law changes, we won't stand idly by as Americans suffer," CMS Administrator Seema Verma said on a conference call for reporters.
In particular, the rules devolve several significant decisions to states, a strategy that Verma said will create flexibility, lighten regulations on insurers and allow some consumers to buy health plans at lower prices.
Andy Slavitt, who was acting CMS administrator during the Obama administration's final two years, countered that the current administration "is making it clear that they're implementing a law that they have no intention of making succeed." Slavitt called the revisions "a gift to the insurance companies by finding lots of ways for them to get around the standards Americans have come to expect."
One of the most significant changes involves a set of 10 essential health benefits that the ACA requires of health plans sold through the federal insurance marketplace and separate state marketplaces. The new rules will not jettison any of the categories but will enable states to allow fewer doctors visits, for example, or to cover fewer prescription drugs.
In another change, the government is turning over to the 39 states that rely on the federal insurance exchange, HealthCare.gov, responsibility for ensuring that marketplace plans have enough doctors and other providers of care in their networks. Similarly, the government no longer will require that insurers provide a standardized set of benefits, urged by the Obama administration as a way to help consumers comparison shop.
The 523 pages of rules issued late Monday afternoon mark the first time the Trump administration has been responsible for an annual exercise in which the government sets forth the standards for insurers planning to participate in ACA marketplaces a year ahead. The Trump version is a sharp break in both tone and substance from the four sets issued during the Obama era.
In ways both subtle and substantial, many of the past years' rules were upgrades to help consumers with prices, benefits and shopping for coverage. Under a change effective in 2016, any insurer wanting to raise its premiums by 10 percent or more has been required to disclose the increase with a justification. Insurers also have had to publish up-to-date lists on drugs, including tiers of coverage and any restrictions on consumers' ability to get them. The rules for 2017 started a rating system for the number of doctors and other providers in plans' networks, so that customers could better compare marketplace insurers in areas that offer a choice.
In a sharp shift, the new rules further weaken the network of consumer assisters, known as navigators, whose funding the Department Health and Human Services slashed last year. The rules remove the requirement that every area has at least two navigator groups and that one be local.
In addition, insurers no longer will be required to devote 80 percent of their income to customers' care, if they can show that a higher profile would improve their financial stability.
Dan Mendelson, president of the consultant Avalere Health, said the new direction "is significant because what the ACA did was create a national standard" and insurance protections for people who could not get affordable health benefits through a job. "Aspects of this rule . . . imply that national standard is going away."
However, Mendelson said the new ways of avoiding the penalty for flouting the ACA's insurance requirement may prove "more symbolic than real."
The exemption for abortion foes is the administration's latest effort to respond to that constituency. In January, it announced a new HHS civil rights division to review complaints from health-care workers who say that participating in abortions or certain other types of care violates their moral or religious beliefs. It also released a proposed rule on "conscience rights" that officials said will further protect those workers.