Congress joins executive branch in move to stabilize ACA exchanges

Dive Brief:

  • In an attempt to encourage participation in ACA exchanges beyond 2017, Congressional Republicans are drafting legislation that address several payer concerns, the New York Times reported.

  • The legislation aligns with rule changes proposed by the Trump administration that would increase the maximum allowed age band ration, curtail special enrollment periods and allow payers to drop coverage for non-paying customers more quickly.

  • Payers have until May to decide what products they will sell on ACA exchanges and the changes could entice them to continue participation despite uncertainty surrounding the ultimate fate of the exchanges.

Dive Insight:

Activity on Capitol Hill indicates a more concerted effort, launched in cooperation with President Donald Trump's administration, to change rules governing payers beginning in 2018. Earlier this month, the Trump administration submitted proposed rules changes to the Office of Management and Budget that would make regulations more favorable for payers.

Republicans lawmakers are in an awkward position. Having spent the better part of the past seven years railing against the ACA and taking several steps to undermine the health reform law, they are now taking some steps to preserve it.

Payers strongly support the proposed changes. Increasing the maximum age band would allow them to increase the gap between premiums paid by younger and typically less expensive beneficiaries and older, costlier beneficiaries. Payers have also argued that beneficiaries who use special enrollment periods tend to utilize more healthcare services than other patients. Under the ACA, payers cannot drop coverage for patients until they are at least 90 days late on their premium payments, but the changes would reduce the grace period to 30 days.

Despite support among payers, the proposed changes are likely to face pushback from several directions. For instance, AARP has indicated that it could take legal action if the maximum allowed age band ratio is increased. It is also unclear whether Republicans will push for immediate repeal of the individual mandate or attempt to phase it out at a later date. Payers support the individual mandate, which encourages young people who generally use few healthcare services to get coverage, but it is unpopular with voters. The negative consequences of its repeal could outweigh the benefits of other proposed changes.

More Republicans seem agreeable to continuing ACA insurance subsidies — at least for a little longer. Rep. Mark Meadows (R-NC) and Sen. Lamar Alexander (R-TN) both told the Times that they would support temporary continuation of subsidies if there is a clear path forward for a replacement plan. Other Republicans, such as Sen. Orrin Hatch (R-UT), want to end insurance subsidies more quickly, Politico reported.

Filed Under: Payer Health Law Policy & Regulation
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