The Trump administration has proposed changes to the Obamacare individual insurance market that would tighten enrollment processes and allow insurers to collect unpaid premium payments, making it harder for people to move in and out of insurance plans, according to a Reuters report. Insurers say “gaming the system” has created an unprofitable mix of healthy and sick customers. The rule does not address changes that must be made by law, such as for the health care act’s income-based subsidies.
The Patient Protection and Affordable Care Act (PPACA) aimed to chip away at soaring health care spending, but data show that costs are still rising, according to Reuters. The U.S. government recently estimated that total medical spending in 2017 will rise 5.4% to $3.36 trillion after a 4.8% spending uptick in 2016.
For now, the Trump administration has backed away from implementing tougher oversight of the individual mandate––the requirement for all Americans to have health insurance or pay a fine––that was due to go into effect for 2016 taxes.
The Internal Revenue Service said that, as a result of Trump’s executive order to reduce regulatory burden, it will not reject tax filings for the year 2016 that fail to indicate whether individuals had health coverage or paid the penalty set under Obamacare. This is a return to the policy for 2015 taxes, the IRS said. The mandate was supposed to bring in healthy customers, but insurers say it hasn’t worked, according to Reuters.
The Centers for Medicare and Medicaid Services, part of the Department of Health and Human Services, proposed the new rule, which includes verifying the status of enrollees outside of the usual enrollment period. It also proposes that insurers can collect unpaid premiums from members when they sign up with the same issuer again––an incentive for people to always have insurance.
Further, the new rule proposes lowering the amount of guaranteed coverage for some “silver”-level plans in the program, which it said could raise out-of-pocket spending for enrollees and cut premiums. The rule would give states oversight of doctor and hospital networks included in the plans, reflecting a Republican theme that health care oversight be reduced at the federal level.
The rule also proposes shortening the open enrollment period for the individual market to November 1 through December 15, similar to the employer-sponsored insurance market and Medicare.
Source: Reuters; February 16, 2017.