Posts Tagged ‘Affordable Care Act’

Trump reverses course on emerging Senate health care deal

October 18, 2017

By ALAN FRAM and ERICA WERNER
The Associated Press

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WASHINGTON (AP) — A bipartisan Senate deal to curb the growth of health insurance premiums is reeling after President Donald Trump reversed course and opposed the agreement, and top congressional Republicans and conservatives gave it a frosty reception.

Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., announced their accord Tuesday after weeks of negotiations and five days after Trump said he was halting federal subsidies to insurers. Under the lawmakers’ agreement, the payments would continue for two years while states were given more leeway to let insurers sidestep some coverage requirements imposed by President Barack Obama’s health law.

In remarks Tuesday in the Rose Garden, Trump called the deal “a very good solution” that would calm insurance markets, giving him time to pursue his goal of scrapping the Affordable Care Act, the target of Republican derision since it was signed into law in 2010.

Although top Democrats and some Republicans praised the Alexander-Murray agreement, Trump backed off after a day of criticism from many in the GOP.

In an evening speech at the conservative Heritage Foundation, he said that “while I commend” the work by the two senators, “I continue to believe Congress must find a solution to the Obamacare mess instead of providing bailouts to insurance companies.”

President Donald Trump is expressing support for an agreement struck by two leading lawmakers to extend federal payments to health insurers. (Oct. 17)

The subsidies go to insurers for reducing out-of-pocket costs for lower-income people. Since Obama’s law requires insurers to make those cost reductions, insurers and others have warned that halting the subsidies would force premiums higher and prompt some carriers to abandon unprofitable markets.

“This agreement avoids chaos,” Alexander said. “I don’t know a Republican or Democrat who benefits from chaos.”

Alexander said the president had encouraged his efforts in two phone calls in recent days. But Trump has called the subsidies bailouts of insurers, and he’s noted that insurers have contributed little to his campaigns.

Just minutes before Alexander announced the deal, White House legislative director Marc Short told reporters that “a starting point” in exchange for restoring the cost-sharing payments “is eliminating the individual mandate and employer mandate.” Those are the central pillars of the health law, and Democrats solidly oppose eliminating them.

Senate Majority Leader Mitch McConnell, R-Ky., was noncommittal about the agreement. “We haven’t had a chance to think about the way forward yet,” he said.

Aides to House Speaker Paul Ryan, R-Wis., did not provide a statement from him.

Both McConnell and Ryan have been eager to turn national attention away from the GOP push to scuttle Obama’s law, which crashed in the Senate twice, and toward an effort to cut taxes.

Reaction from other Republicans toward the Senate agreement was mixed. For many conservatives it’s practically unthinkable to sign off on federal payments that would arguably prop up a law they’ve been vowing for seven years to destroy.

Rep. Mark Walker of North Carolina, chairman of the conservative Republican Study Committee in the House, tweeted: “The GOP should focus on repealing & replacing Obamacare, not trying to save it. This bailout is unacceptable.”

Freedom Caucus Chairman Rep. Mark Meadows, who’s been at work on a proposal of his own, was slightly more positive, calling the Alexander-Murray bill “a good start” but saying much more work needed to be done.

Alexander said he and allies including Sen. Mike Rounds, R-S.D., would spend the next several days trying to build up support with the goal of formally introducing legislation later this week. If the legislation does pass, it would almost certainly be as part of a larger package including must-pass spending or disaster relief bills and that might not be until the end of the year.

The deal includes provisions allowing states faster and easier access to waivers that would allow them to shape their own marketplace plans under the health law.

It would provide for a new low-cost catastrophic coverage insurance option for all consumers. It would also restore $106 million for outreach and enrollment programs aimed at prodding people to buy policies — efforts that Trump has slashed.

A federal judge ruled in a 2014 lawsuit brought by House Republicans that Congress never legally authorized spending money for the insurers’ subsidies. Obama and Trump, initially, continued making the payments, though Trump declared last week he would pull the plug.

The payments, which cost around $7 billion this year, lower expenses like copayments and deductibles for more than 6 million people. But discontinuing them would actually cost the government more money under the health law’s complicated structure, because some people facing higher premiums would end up getting bigger tax subsidies to help pay for them.

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Associated Press reporters Jill Colvin and Ken Thomas contributed to this report.

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Amid ACA Turmoil, Insurers Brace for Drop in Enrollment

October 18, 2017
With enrollment for Affordable Care Act health-insurance plans starting in just two weeks, insurers are bracing for a drop-off among consumers put off by higher rates, confusion about the law’s standing and a shorter window to choose coverage.
Image result for Anthem Inc, signs, photos

By Anna Wilde Mathews
The Wall Street Journal
Oct. 18, 2017 5:30 a.m. ET

With enrollment for 2018 Affordable Care Act health-insurance plans starting in just two weeks, insurers are bracing for a drop-off among consumers put off by higher rates, confusion about the law’s standing and a shorter window to choose coverage.

Companies like Blue Cross Blue Shield of Michigan, Florida Blue and Medica are rushing to shore up their customer base as the future of the 2010 health law continues to be debated on Capitol Hill, where two senators Tuesday announced a tentative deal aimed at bolstering the ACA marketplaces. The insurers are using advertising, letters, emails and other outreach techniques to reassure enrollees about their insurance options under the ACA in 2018.

Other industry players, including online insurance vendor eHealth Inc., see an opening to offer consumers cheaper alternatives to ACA policies. While less comprehensive, these plans could become more appealing if the Trump administration moves forward with loosening some restrictions on them, as the president proposed in an executive order last week.

Separately, the Trump administration said it would halt payments to insurers that are used to reduce health-care costs for low-income ACA enrollees. Partly because of the anticipated loss of those federal payments, expected to total $7 billion this year, major insurers are sharply raising rates in many states.

And many firms say they expect to lose consumers who will bear the full brunt of the rate increases—those who aren’t eligible for the health law’s premium subsidies, which help enrollees with annual incomes of less than around $48,000.

“The people we’ll lose will likely be the ones who have affordability issues,” said Rick Notter, an executive at Blue Cross Blue Shield of Michigan. The insurer is raising rates on its ACA health maintenance organization plans by around 23% on average. It predicts the state’s ACA enrollment will drop by around 9% next year.

Rate Impact: When premiums went up on Affordable Care Act plans this year, enrollment didn’t drop among those who get federal premium subsidies, but it dropped sharply among the unsubsidized. Source: Oliver Wyman

Despite significant rate increases in 2017, enrollment in ACA plans by subsidized consumers rose an estimated 5.4% in the second quarter of this year compared with a year earlier, according to Oliver Wyman, a consulting unit of Marsh & McLennan . But enrollment in individual coverage by people not receiving subsidies dropped around 22.4%.

“We will likely see this accelerate in 2018,” said Kurt Giesa, a partner at Oliver Wyman.

Insurers are particularly nervous about losing healthy enrollees like Daniel Ramos, a 29-year-old massage therapist and personal trainer in Richmond, Va.

Mr. Ramos, who says he rarely needs health care, was already skeptical about spending around $250 a month for his current ACA plan from Anthem Inc. Next year, the only insurer expected to still sell ACA coverage in Richmond, Cigna Corp. , will boost rates 51% on average across all of its Virginia exchange offerings.

Mr. Ramos, who doesn’t get a premium subsidy, says he isn’t sure he will buy an ACA plan again if the options are far more expensive—despite the risk of a penalty under the health law’s coverage mandate.

“It feels like a big money hole,” he says of the premiums he pays. “If it becomes more, I’d rather just go ahead and take the hit and pay the fine next year.”

President Donald Trump signed an executive order Thursday directing federal agencies to pursue sweeping regulatory changes to the health-care system. Mr. Trump said the order will “increase competition, increase choice, and increase access to lower-cost, high-quality health-care options.” Photo: Getty

Insurers fear other factors could weigh on 2018 exchange sign-ups, too. The open enrollment period this year will start on Nov. 1 in most states and last only about six weeks—shorter than in previous years. And the Trump administration has cut back on advertising and other outreach efforts.

Industry officials also point to confusion over the status of ACA after months of talk about repealing the law and the president’s comments about Obamacare being “dead” and “finished.” Despite the tentative Senate deal—which would restore the federal cost-sharing payments and, potentially, funding for ACA outreach—passing legislation before the start of November would be a heavy lift for Congress.

“It’s all of those things together” that will push down enrollment, along with “the sheer size of the rates,” said Chet Burrell, chief executive of CareFirst BlueCross BlueShield, who predicts a “decline that will be quite substantial.”

CareFirst’s ACA rates in Maryland are going up 34.5% for health maintenanc e organization plans and 50% for preferred provider organization plans. The insurer is seeking permission from the state insurance regulator to make a further boost because of the halt to federal cost-sharing payments.

A spokesman for the Department of Health and Human Services said the ACA marketplaces were troubled before the president took office, and that Mr. Trump’s executive order “is intended to provide Americans with more affordable health-care choices and allow them to exercise greater control over their health-care decisions.”

Insurers are using advertising, letters, emails and other outreach techniques to reassure enrollees about their insurance options under the ACA in 2018. Here, a man walks by a Florida Blue health care insurance office in Hialeah, Fla., in July.Photo: Alan Diaz/Associated Press

Despite the uncertainty, insurers say they’re focused on making sure consumers know when to sign up and understand what’s available. For many people with subsidies, the rate increases will be largely neutralized because the federal help will rise in tandem with the cost of plans. Those who don’t get subsidies may find that rate hikes are far sharper on middle-tier “silver” plans, but less for other types, because of how insurers in some states loaded their increases.

Insurers will likely be helped by an automatic re-enrollment process that remains in effect for this year, pushing passive consumers into new plans.

But that automatic process could mean some consumers will be signed up for coverage with big rate increases and won’t realize it until they are billed later on.

“We’re trying to remind people, ‘shop, shop, shop,’ ” said Geoff Bartsh, a vice president at Medica, an ACA insurer.

More on Health Care

  • Trump and McConnell Declare They Have a Common Agenda (Oct. 16)
  • Trump Steps Up Pressure on Congress (Oct. 15)
  • Health Care Back on Congress’s Front Burner (Oct. 15)
  • Republicans Split Over Trump’s Move to End Health Subsidies (Oct. 13)
  • Trump Executive Order Could Divide the Health Insurance Market (Oct. 8)

Medica, which is raising rates around 30% or more in states including Iowa, Nebraska and Wisconsin, is sending letters to people who will automatically be signed up for its plans. It is also setting up a special website to help them pick the best option.

Florida Blue, meanwhile, has created new, lower-cost plans at the cheapest ACA bronze level to appeal to people who don’t get subsidies, said Jon Urbanek, a senior vice president at the insurer. The insurer is also sending postcards to prompt people to shop during open enrollment, and is holding events around the state. “People are seeing all kinds of confusing messages out there,” Mr. Urbanek said, so the insurer is trying to reassure them.

For companies that provide cheaper non-ACA products with fewer benefits, the open enrollment season may offer a chance to snag more customers.

“We expect a continued acceleration in demand,” said Gavin Southwell, chief executive of Health Insurance Innovations Inc., which sells short-term insurance.

Short-term products often are sold only to people who qualify as healthy, lack certain benefits like maternity care, and don’t cover costs related to pre-existing conditions. Under current regulations, the plans can’t be sold with durations longer than three months, though that will likely stretch to nearly a year in many states under changes pushed by Mr. Trump’s executive order. Also, people with short-term plans can still be hit by the ACA’s coverage mandate penalty.

EHealth, the online insurance vendor, is rolling out new packages that pull together products including short-term insurance, coverage of online and telephonic doctor visits and indemnity plans, which generally pay a set sum toward medical services such as a hospital stay. The bundles provide limited protection compared with ACA plans. For instance, they lack full prescription-drug coverage, though they sometimes include discounts on certain medications. But they are expected to be cheaper than health-law plans.

The packages are for “those folks who want coverage but are facing that affordability barrier when they look at the major medical” plans sold under the ACA, said Paul Rooney, a vice president at eHealth.

When J. Mitchell Stockdale shopped for ACA plans last year, he said he found premiums too expensive. So this September, the 53-year-old retired engineering manager in Lenoir City, Tenn., decided to buy an eHealth package with an indemnity plan and dental coverage.

The health plan has limited benefits, including $2,000 a day for hospital stays, which is less than many hospitals typically bill. But Mr. Stockdale, who isn’t eligible for ACA plan premium subsidies, says he is betting he won’t have major health needs.

“It’s a small risk,” he said. “I’m willing to take it.”

https://www.wsj.com/articles/health-insurers-step-up-open-enrollment-push-as-window-to-sign-up-shrinks-1508319002

Senators reach deal to fund Obamacare subsidies after Trump says he will cut them off

October 18, 2017

Mr Trump has said he will support the bipartisan agreement

By Alexandra Wilts Washington DC
The Independent

trump-obamacare-subsidies.jpg

President Donald Trump AP

Senators have reached a bipartisan deal “in principle” to fund Obamacare insurance subsidies that Donald Trump said last week he would terminate.

The plan between senators Lamar Alexander, a Republican, and Patty Murray, a Democrat, is intended to stabilise health insurance markets under the Affordable Care Act, otherwise known as Obamacare.

The subsidies, officially called cost-sharing reduction payments, lower out-of-pocket healthcare costs for low-income consumers. They would be funded for two years under the agreement in exchange for more state flexibility in Obamacare.

For weeks, Mr Alexander and Ms Murray have been hammering out the healthcare legislation, which is separate from the Republicans’ multiple failed attempts to repeal and replace Obamacare.

Mr Trump said he will support the deal, but called it a “short-term solution”. He said he is still looking to overhaul his predecessor’s signature healthcare law.

“The solution will be about a year or two years. And it will get us over this intermediate hump,” Mr Trump said during a news conference in the Rose Garden.

He said the long-term solution is to provide states with “block grants” to help people buy private insurance.

While the agreement between Ms Murray and Mr Alexander is a breakthrough – both on the healthcare front and in the partisan atmosphere of Congress – it still needs the support of other senators to move the legislation forward. The Republican-controlled House of Representatives would also have to approve any proposal.

Majority Leader Mitch McConnell was noncommittal on whether he would put the legislation, once the specifics are worked out, on the Senate floor for a vote. Meanwhile, Senate Minority Leader Chuck Schumer welcomed the agreement, calling it “a very good step forward”.

Unless the Obamacare subsidies are quickly restored, insurers and experts assert that insurance companies will leave unprofitable markets and premiums will soar for people buying individual policies.

The President made waves last week when he announced that he would cut off the subsidies to health insurance companies for low-income patients, some of which include his supporters.

Mr Trump on Tuesday repeated his gloomy outlook on Obamacare, which extended coverage to 20m people.

“Obamacare is virtually dead. At best, you could say it’s in its final legs,” the President told reporters in the Oval Office. “The premiums are going through the roof. The deductibles are so high that people don’t get to use it.  Obamacare is a disgrace to our nation, and we are solving the problem of Obamacare.”

The so-called cost-sharing reductions cost around $7bn this year and lower expenses like co-payments and deductibles for more than 6m people.

On Monday, Mr Trump credited his decision to cut the payments as the reason why Republicans were meeting with Democrats to work on healthcare legislation. Mr Alexander told reporters that the President twice in recent days urged him to reach a deal with Ms Murray.

http://www.independent.co.uk/news/world/americas/us-politics/obamacare-subsidies-funding-deal-senators-trump-cut-off-a8005821.html

UnitedHealth Revenue Grows Despite ACA Exit

October 17, 2017

Health insurer expands in employer insurance programs and delivery of care

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UnitedHealth Group Inc.’s core insurance and health-services businesses grew in its latest quarter, despite a dent in revenue caused by the company’s decision to pull out of most Affordable Care Act markets.

The latest quarterly results from the nation’s largest health insurer come as the market is facing policy changes related to the ACA. President Donald Trump last week signed an executive order seeking to provide lower-cost plans in the individual insurance market, and he is poised to end payments to insurers that offset…

The plan to stop selling plans in ACA marketplaces also reduced pressure on UnitedHealth’s earnings, as the company’s net margin rose to 4.6% from 3.8% a year earlier.

UnitedHealth also on Tuesday raised its adjusted earnings-per-share guidance for the year to between $9.75 and $9.90, from between $9.65 and $9.85 previously.

Some analysts had projected a margin expansion would be due to UnitedHealth’s and other health insurance providers’ firm pricing power in the Medicare business. They also attributed the growth to the exemption from ACA taxes that health insurers like UnitedHealth were granted this calendar year. Credit Suisse analysts said that while the Medicaid market for individuals is still volatile amid Washington’s health-care overhaul talks, UnitedHealth will likely have nearly minimized its exposure to that uncertainty by 2018.

Revenue rose 7.7% to $50.05 billion, slowed by withdrawals from ACA individual markets, combined with the ACA health insurance tax deferral. Revenue from the Medicare business rose 17% to $16.7 billion.

Analysts surveyed by Thomson Reuters had expected $50.06 billion in revenue.

U.S. senators have pivoted their plans to overhaul the ACA, and are no longer seeking approval of a new health-care bill in the short term. Monday night, two more senators said they would oppose the GOP-backed measure, leaving the bill just shy of the necessary votes to pass it. This came after the Republican-led Senate said Saturday it would delay a vote on the bill previously scheduled for this week due to the unexpected absence of Sen. John McCain, a Republican from Arizona, and the opposition of two other Republican senators. Passage of the law would have eventually eliminated all of the ACA markets UnitedHealth has been withdrawing from.

The Optum unit, UnitedHealth’s health-benefits platform, saw earnings from operations grow 21% to $1.5 billion. OptumRx, the company’s pharmacy benefit manager, saw revenue growth of 5.1% to $15.8 billion.

The insurer’s medical-loss ratio — the percentage of premiums paid in claims — increased as the health-insurance tax deferral was offset by an improved business mix, product performance and favorable reserve development. It rose to 20 basis points year-over-year to 82.2%.

The Minnetonka, Minn.-based company recorded a profit of $2.28 billion, or $2.46 a share, compared with $1.75 billion, or $1.81 per share, a year ago. Excluding certain items, UnitedHealth earned $2.32 a share, compared with $1.96 a year ago. Analysts had anticipated the company reporting a profit of $2.23 a share.

Shares in UnitedHealth, up 32% from a year ago, fell 0.5% to $185.35 in premarket trading.

Write to Justina Vasquez at justina vasquez@wsj.com

Health Care Back on Congress’s Front Burner

October 16, 2017

Trump’s move to stop subsidy payments ratchets up pressure for a bipartisan deal

WASHINGTON—The Senate this week will grapple with President Donald Trump’s decision to stop making subsidy payments to health insurers, with lawmakers seeking a deal that would keep the money flowing while Republicans try to fold in conservative-oriented health-care priorities.

It remains unclear whether a package could emerge that attracts support from a critical mass of senators and also from House Republicans. That could be put to the test quickly, as Sens. Lamar Alexander (R., Tenn.) and Patty Murray (D., Wash.) are expected to introduce a plan within days and Sen. Ron Johnson (R., Wis.) unveils his own, more-conservative-leaning version.

The result, driven by unexpectedly far-reaching moves by Mr. Trump on health care last week, could be a resumption or even escalation of the legislative battle that unfolded during Republicans’ attempts to repeal the 2010 Affordable Care Act. It comes as insurers press some state and federal officials to let them reset their rates for 2018 in light of the halting of the subsidies, while one state, Oregon, already has told insurers to jack up rates for their most popular plans.

On Monday, Mr. Trump is meeting with Senate Majority Leader Mitch McConnell (R., Ky.) to discuss budget and tax issues, with health care also a possible topic.

Mr. Trump met Saturday with Mr. Alexander, Sen. Lindsey Graham (R., S.C.) said on CBS , and he encouraged Mr. Alexander to pursue his deal, Mr. Graham said.

The “cost-sharing reduction” payments ended last week by Mr. Trump help insurers offset subsidies to low-income Americans. Many Republicans, fearing chaos in the insurance market if the payments stop, want to extend them as long as that is accompanied by moves such as relaxing regulations on some insurance plans.

“I think Congress should pass that short-term extension” of payments, Sen. Bill Cassidy (R., La.) said Sunday on Fox. “We absolutely have to think about that family around the kitchen table, which is why we should pass them”—but only if they are packaged with provisions that he said would lead to lower premiums.

Democrats say the Republican approach to lowering premiums involves stripping important consumer protections, allowing for insurance policies that provide insufficient coverage. Healthier, younger Americans may have access to lower premiums under the GOP approach, they say, but older and sicker consumers would see their costs go up.

Sen. Chris Murphy (D., Conn.) said Mr. Trump’s decision to end the payments was retaliation for Republicans’ inability to repeal the ACA. “This is the equivalent of health-care arson,” Mr. Murphy said on Fox. “He is literally setting the entire health care system on fire just because he is upset that Congress won’t pass a repeal bill supported by 17% of the public.”

Some Republicans say they are less concerned with the payments themselves than the fact that the Obama and Trump administrations have been making them without an appropriation from Congress, which they say is unconstitutional.

This week’s most closely watched event will likely be the unveiling of the Alexander-Murray plan, which the two senators have been discussing for months. In exchange for extending the insurer payments, the bill would give states permission to obtain waivers under the ACA, paving the way for more variation in insurance plans, according to people on Capitol Hill.

Mr. Johnson, for his part, is working on legislation that includes additional conservative measures, such as expanding the use of health-savings accounts and delaying the enforcement of the mandate that most employers provide insurance.

Mr. Johnson said he is seeking a bill House Republicans would accept. “We can do stuff in the Senate, but if it dies in the House, we haven’t done much,” he said in an interview.

Mr. Johnson said he recognized that many Republicans are hesitant to fund the payments. But ending them could result in higher premiums for consumers and more money spent by the government, which would have to provide larger subsidies to certain consumers, he said.

“Insurance companies get paid either way,” Mr. Johnson said, and he is “trying to find that sweet spot that will fund the cost-sharing reductions” and “restrain the growth in premiums.”

Conservative House Republicans have indicated any support for continuing the payments would depend upon significant concessions from Democrats on curbing the ACA.

If lawmakers reach a bipartisan deal on health care, it isn’t clear whether it would be voted on as a standalone bill or as part of complex negotiations looming in December.

The government’s current funding expires after Dec. 8, and other hot-button issues could get wrapped into the end-of-year discussions, including how to handle illegal immigrants brought to the country by their parents at a young age.

Democrats will have leverage in those talks because the spending bill, needed to avert a government shutdown, would need 60 votes to clear the Senate, where Republicans hold a 52-48 advantage.

For now, many in the health industry are reacting with alarm to the prospect of the subsidy payments ending. A diverse coalition representing health plans, doctors and businesses sent a letter to Congress Saturday asking lawmakers to “act immediately” to restore the payments.

In one example of the immediate impact of halting the payments, Oregon ordered insurers in the state who sell on the ACA’s exchanges to increase premium rates for 2018 for the most popular plans by 7.1%.

While some insurers had already filed rates for higher premiums with the expectation the payments might be discontinued, insurers in more than a dozen states filed rates that didn’t take into account the possibility. Some of those insurers are now saying they need to raise rates by 20% or more for next year, but the federal deadline for filing has already passed.

Before announcing late Thursday he would cut off the payments, Mr. Trump issued an executive order designed to bolster various alternative insurance arrangements, which are less regulated than traditional policies. Mr. Trump has he would continue using administrative action to try to dismantle the ACA, and Democrats are seeking ways to fight back, from litigation to legislation.

Sen. Susan Collins of Maine, a centrist Republican, said on ABC that for a deal on payments to work, “Democrats are going to need to step up to the plate and assist us.”

She added, “I’m very disappointed in the president’s actions this past week…But Congress needs to step in and I hope the president will take a look at what we’re doing.”

—Brody Mullins and Eric Morath contributed to this article.

Write to Stephanie Armour at stephanie.armour@wsj.com and Kristina Peterson at kristina.peterson@wsj.com

Trump Threatens Obamacare Chaos as He Cuts Off Insurer Subsidy — “Obamacare has proven itself to be a fatally flawed law.”

October 13, 2017

Bloomberg

By Zachary Tracer

 
  • Subsidies to help lower-income people to stop immediately
  • Health insurers have pushed Congress to appropriate funds
 Image may contain: people standing, sky, grass and outdoor

Trump: Health Plan Will Solve Obamacare ‘Nightmare’

President Donald Trump’s administration took its most drastic step yet to roll back the Affordable Care Act on Thursday evening, cutting off a subsidy to insurers just hours after issuing an executive order designed to draw people away from the health law’s coverage markets.

The moves — which critics call deliberate attempts to sabotage the law — come just weeks before Americans will be able to start signing up for coverage for 2018. They follow other steps the Trump administration has taken, such as slashing advertising and outreach budgets meant to get people to sign up, as well as planning outages of the website where people can enroll.

Late Thursday, the administration said it would immediately stop paying what are known as cost-sharing reduction subsidies. The payments — which are the subject of a legal dispute — go to health insurers in the Affordable Care Act to help lower-income people with co-pays and other cost sharing. Without them, insurers have said they’ll dramatically raise premiums or pull out of the law’s state-based markets.

The White House said the Department of Justice and the Department of Health and Human Services both concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare.

“The bailout of insurance companies through these unlawful payments is yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system,” the White House said in the statement.

Immediate Halt

The payments will stop immediately, with no transition period, Acting HHS Secretary Eric Hargan and Centers for Medicare and Medicaid Services Administrator Seema Verma said in a statement. They next payments were due next week.

“Congress has not appropriated money for CSRs, and we will discontinue these payments immediately,” the department said.

Donald Trump signs an executive order on health care in Washington, D.C., on Oct. 12.

Photographer: T.J. Kirkpatrick/Bloomberg

The administrative actions come after Republicans in Congress tried and failed to repeal the law. Trump has repeatedly threatened to let Obamacare wither, but the most recent actions go beyond that, said Representative Nancy Pelosi and Senator Chuck Schumer, the top ranking Democrats in Congress.

“Instead of working to lower health costs for Americans, it seems President Trump will singlehandedly hike Americans’ health premiums. It is a spiteful act of vast, pointless sabotage,” the Democrats said in a statement.

House Speaker Paul Ryan backed the move.

“Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with the Trump administration to provide the American people a better system,” Ryan said in a statement.

Premiums to Rise

Given the disagreements over the payments, and an ongoing lawsuit questioning their legality, many health insurers had dramatically raised the premiums they planned to charge for next year in anticipation of not getting the funds. The payments are made monthly, and have been estimated at $7 billion in total this year.

“Many, but not all, insurers assumed these payments would end and set 2018 premiums accordingly,” Larry Levitt, a senior vice president at the Kaiser Family Foundation, said by email. “Those that didn’t build this into their premiums may petition to adjust their rates or threaten to pull out of the marketplace. It seems like we’re in for a chaotic run up to the beginning of open enrollment.”

The moves are also a political risk for Trump and Republicans. An August poll by the Kaiser Family Foundation found that 78 percent of those surveyed thought the administration should try and make the law work, while only 17 percent wanted to see it pushed toward failure.

Fight Will Continue

Health insurers have pushed Congress to appropriate the funds. Congressional action — potentially as part of a package of fixes a bipartisan group of senators have considered — would effectively end the risk of the president ending them unilaterally.

Kristine Grow, a spokeswoman for America’s Health Insurance Plans, declined to comment.

What happens next isn’t clear. Any action to end the payments may face legal obstacles of its own, after seventeen states and the District of Columbia won the right in August to defend the payments in a court case. New York Attorney General Eric Schneiderman on Thursday night promised to do just that. California Attorney General Xavier Becerra also said his state was ready to sue.

“This summer, the courts granted our intervention to defend these vital subsidies and the quality, affordable health care they ensure for millions of families across the country,” Schneiderman said in a statement. “Our coalition of states stands ready to sue if President Trump cuts them off.”

The subsidy decision follows Trump’s signing Thursday of an executive order that tells federal agencies to consider a number of steps that could erode many of the core tenets of Obamacare.

Executive Order

In the order, the president asked regulators to craft rules that would allow small businesses to band together to buy insurance across state lines, let insurers sell short-term plans curtailed under Obamacare, and permit workers to use funds from tax-advantaged accounts to pay for their own coverage.

The result of that action and others is likely to be higher premiums and fewer people covered. The executive order, in particular, will give people in the law’s markets several alternative forms of coverage. They will likely be cheaper, though not as comprehensive.

“It would essentially create a parallel regulatory structure within the individual and small group markets that is freed from the various consumer protections established,” Spencer Perlman, a policy analyst with Veda Partners, a Bethesda, Maryland-based advisory firm, said earlier Thursday. “The end result could be a death spiral for ACA-compliant plans.”

Trump’s actions signaled that the longer-term unraveling of Obamacare is a priority despite the setbacks on Capitol Hill this year.

“The policies outlined in the executive order are the beginning of the actions the administration will take to provide relief to people harmed by Obamacare,” said Andrew Bremberg, director of the administration’s domestic policy council, on a call with reporters earlier Thursday. “You should expect additional actions coming from the administration in months to come.”

https://www.bloomberg.com/news/articles/2017-10-13/trump-orders-an-end-to-key-obamacare-insurance-subsidies

Trump plans to stop ACA payments to insurers

October 13, 2017
BY LAURA SANTHANAM  October 12, 2017 at 11:13 PM EDT
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Image may contain: 10 people, people smiling, people sitting and suit
U.S. Senator Rand Paul (R-KY) applauds as U.S. President Donald Trump signs an executive order to make it easier for Americans to buy bare-bones health insurance plans and circumvent Obamacare rules at the White House in Washington, U.S., October 12, 2017. REUTERS/Kevin Lamarque

President Donald Trump plans to halt payments to insurers under the Obama-era health care law that he has been trying to unravel for months.

That’s according to two people familiar with the decision who sought anonymity because they were not authorized to speak publicly.

The White House says in a statement that the Department of Health and Human Services has determined there is no appropriation for cost-sharing reduction payments to insurers under the Obamacare law.

READ MORE: 8 million kids could lose health insurance if the CHIP program isn’t renewed. Here’s what that looks like in one state

Trump’s decision is expected to rattle already-unsteady insurance marketplaces. The president has previously threatened to end the payments, which help reduce health insurance copays and deductibles for people with modest incomes, but remain under a legal cloud.

The president’s action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorized by federal law, and the president’s position is reckless.

http://www.pbs.org/newshour/rundown/trump-plans-stop-aca-payments-insurers/

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Trump to halt subsidies to health insurers

October 13, 2017

The Associated Press

Donald Trump

WASHINGTON (AP) — In a brash move likely to roil insurance markets, President Donald Trump will “immediately” halt payments to insurers under the Obama-era health care law he has been trying to unravel for months.

The Health and Human Services department made the announcement in a statement late Thursday night. “We will discontinue these payments immediately,” said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma.

In a separate statement, the White House said the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress.

However, the administration had been making the payments from month to month, even as Trump threated to cut them off to force Democrats to negotiate over health care. The subsidies help lower copays and deductibles for people with modest incomes.

Halting the payments would trigger a spike in premiums for next year, unless Trump reverses course or Congress authorizes the money. The next payments are due around Oct. 20.

The top two Democrats in Congress sharply denounced the Trump plan in a joint statement.

“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” said House and Senate Democratic leaders Nancy Pelosi of California and Chuck Schumer of New York. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.”

The president’s action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorized by federal law, and say the president’s position is reckless.

“We are prepared to sue,” said California Attorney General Xavier Becerra. “We’ve taken the Trump Administration to court before and won.”

Word of Trump’s plan came on a day when the president had also signed an executive order directing government agencies to design insurance plans that would offer lower premiums outside the requirements of President Barack Obama’s Affordable Care Act.

Frustrated over setbacks in Congress, Trump is wielding his executive powers to bring the “repeal and replace” debate to a head. He appears to be following through on his vow to punish Democrats and insurers after the failure of GOP health care legislation.

On Twitter, Trump has termed the payments to insurers a “bailout,” but it’s unclear if the president will get Democrats to negotiate by stopping payment.

Experts have warned that cutting off the money would lead to a double-digit spike in premiums, on top of increases insurers already planned for next year. That would deliver another blow to markets around the country already fragile from insurers exiting and costs rising. Insurers, hospitals, doctors’ groups, state officials and the U.S. Chamber of Commerce have urged the administration to keep paying.

Leading GOP lawmakers have also called for continuing the payments to insurers, at least temporarily, so constituents maintain access to health insurance. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., is working on such legislation with Democratic Sen. Patty Murray of Washington.

The so-called “cost-sharing” subsidies defray copays and deductibles for people with low-to-modest incomes, and can reduce a deductible of $3,500 to a few hundred dollars. Assistance is available to consumers buying individual policies; people with employer coverage are unaffected by the dispute.

Nearly 3 in 5 HealthCare.gov customers qualify for help, an estimated 6 million people or more. The annual cost to the government is currently about $7 billion.

But the subsidies have been under a legal cloud because of a dispute over whether the Obama health care law properly approved them. Adding to the confusion, other parts of the Affordable Care Act clearly direct the government to reimburse the carriers.

For example, the ACA requires insurers to help low-income consumers with their copays and deductibles.

And the law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide.

But there’s disagreement over whether the law properly provided a congressional “appropriation,” similar to an instruction to pay. The Constitution says the government shall not spend money unless Congress appropriates it.

House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked specific language appropriating the cost-sharing subsidies.

A district court judge agreed with House Republicans, and the case has been on hold before the U.S. appeals court in Washington. Up to this point the Trump administration continued making the monthly payments, as the Obama administration had done.

While the legal issue seems arcane, the impact on consumers would be real.

The Congressional Budget Office estimated that premiums for a standard “silver” plan will increase by about 20 percent without the subsidies. Insurers can recover the cost-sharing money by raising premiums, since those are also subsidized by the ACA, and there’s no legal question about their appropriation.

Consumers who receive tax credits under the ACA to pay their premiums would be shielded from those premium increases.

But millions of others buy individual health care policies without any financial assistance from the government and could face prohibitive increases. Taxpayers would end up spending more to subsidize premiums.

Earlier Thursday, Trump had directed government agencies to design a legal framework for groups of employers to band together and offer health insurance plans across state lines, a longstanding goal for the president.

___

Associated Press Writer Ricardo Alonso-Zaldivar contributed to this report.

In Start to Unwinding the Health Law, Trump to Ease Insurance Rules

October 12, 2017

Directive is expected to expand the sale of less-expensive plans with fewer benefits

President Donald Trump is planning to sign an executive order Thursday to initiate the unwinding of the Affordable Care Act, paving the way for sweeping changes to health-insurance regulations by instructing agencies to allow the sale of less-comprehensive health plans to expand.

Mr. Trump, using his authority to accomplish some of what Republicans failed to achieve with their stalled congressional health-care overhaul, will direct federal agencies to take actions aimed at providing lower-cost options and fostering competition in the individual insurance markets, according to a Wall Street Journal interview with two senior White House officials. The specific steps included in the order will represent only the first moves in his White House’s effort to strike parts of the law, the officials said.

By boosting alternative insurance arrangements that would be exempt from some key ACA rules, the change would provide more options for consumers. But health-insurance experts say it could raise costs for sicker people by drawing healthier, younger consumers to these alternative plans, which could be less expensive and offer fewer benefits.

The executive order—which Mr. Trump plans to unveil in a signing ceremony in the Roosevelt Room Thursday, surrounded by cabinet officials and employer representatives—will aim to expand access to plans that let small businesses and possibly individuals band together to buy insurance. It will also lift limits on the sale of short-term insurance, which provides limited coverage and often appeals to healthier people. And it will seek to expand the ways in which workers use employer-funded accounts to buy their own insurance policies.

It will be months, rather than weeks, for even the most simple changes in the executive order to take effect, and the order leaves key details to the Labor Department, in particular, to determine after a formal rule-making process, including the solicitation of public comment.

But taken together, the instructions will amount to a reversal of the broad ACA approach, which seeks to guarantee that insurance policies offer a minimum level of benefits to all consumers regardless of their health history. Mr. Trump and other Republicans argue that such rules must be relaxed to bring down premiums, especially for healthier people who have seen costs rise under the ACA.

The order also will set the stage for potential future action, as Mr. Trump weighs whether to stop enforcing the ACA requirement that most Americans obtain insurance, for example, and whether to keep making payments that let insurers subsidize lower-income consumers.

And in a surprising move, the White House officials also said Wednesday night that the order would direct agencies to study and issue a report on federal and state policies that could contribute to rising health costs—including, potentially, the impact of health-care provider consolidation.

Health analysts predicted that Thursday’s order could tempt critics to pursue legal challenges, opening a new front in the health-care battle. But the order is likely to leave much of the implementation details to agencies, senior White House officials said Wednesday, and they said they didn’t believe the order could be litigated.

The action marks the biggest change to health care since the November election. The ACA, also called Obamacare, made sweeping changes to health insurance pricing that made insurance newly accessible for lower-income and sicker Americans, but also resulted in market turbulence and higher premiums for healthier and middle-income peo ple, in particular.

Republicans’ effort to repeal the ACA collapsed in Congress last month, and Mr. Trump hasn’t hidden his displeasure at GOP leaders for that failure or his desire to step into the gap. The White House officials said Wednesday night that the order was specifically crafted in the context of the failure of the repeal bid.

“Since Congress can’t get its act together on HealthCare, I will be using the power of the pen to give great HealthCare to many people – FAST,” Mr. Trump tweeted this week in signaling his intent to issue the executive order.

Democrats, however, warned the order could cause turbulence in the insurance market and overlooks the complexity of the health-care system. “It has the potential to be very disruptive,” said Rep. John Yarmuth of Kentucky, the top Democrat on the House Budget Committee. “I don’t think the insurance companies are prepared to actually deal with that.”

The order will direct the Labor Department to take steps that speed the way for small businesses, and possibly individuals, to band together in arrangements called association health plans. These insurance plans would be exempt from some regulations, such as the requirement that they offer a specific set of benefits and they would likely attract those with limited health needs.

The final decision about how far to expand the definition of an association and its members will be left to the agency, after a period of public comment, the two White House officials said. The officials said they supported a more expansive view of who might be considered to be eligible to sign up, but weren’t prescribing a specific legal definition—a significant factor in determining the impact of the change on insurance markets.

Supporters say such health plans can costs less, since they wouldn’t be subject to as many regulations. But critics say that leaves consumers at risk if they wind up with expensive health conditions that aren’t covered.

Currently, these self-insured health plans are typically led by trade groups that are subject to state regulation, but agency moves following the Trump order would free them from many of those rules.

In another move, the executive order will call for expanded access to short-term health plans whose availability was curtailed by the Obama administration. These plans have more flexibility than others allowed under the ACA, such as an ability to refuse coverage to people with pre-existing conditions.

The Obama administration limited these policies to less than three months, with no ability to renew them after that time because of concerns they were siphoning off healthier people from the ACA marketplaces.

As with association plans, supporters say short-term policies provide more options and carry lower premiums, while critics say they would attract the healthy and leave higher-risk people in more traditional plans that would become more costly since the population would be older and sicker.

Finally, the order will direct agencies to rescind an Obama-era guidance on employer-funded accounts that workers use for medical costs. Employees who have these accounts, called health reimbursement arrangements, will likely be allowed to use them to buy their own insurance plans, something that is now forbidden.

The Obama administration blocked the pretax dollars from being used to buy such plans because of concerns that would prompt employers to stop offering coverage of their own.

—Kristina Peterson contributed to this article.

Write to Louise Radnofsky at louise.radnofsky@wsj.com, Stephanie Armour at stephanie.armour@wsj.com and Anna Wilde Mathews at anna.mathews@wsj.com

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Trump Executive Order Could Divide the Health Insurance Market

October 9, 2017

Measure may allow insurers to offer lower-cost, less-comprehensive plans restricted by the Affordable Care Act

Maria Losoya, right, provided information about how to get affordable health insurance in Tucson, Ariz., last month.
Maria Losoya, right, provided information about how to get affordable health insurance in Tucson, Ariz., last month. PHOTO: CAITLIN O’HARA/REUTERS

WASHINGTON—President Donald Trump’s executive order on health insurance, the most significant step so far to put his stamp on health policy, is designed to give more options to healthy consumers. It also could divide the insurance market in two.

The order, to be signed this week, will begin rolling back some requirements of the Affordable Care Act and could allow insurers to offer the kinds of lower-cost, less-comprehensive plans that were restricted by the 2010 health law.

A Trump administration official who previewed the order said it was aimed at promoting competition and choice in the health-care markets. One result, analysts said, could be that healthy people are drawn to the expanded, less-expensive plans, leaving sicker and higher-risk people in a dwindling pool that sees higher costs.

Together, if executed in an expansive way, Mr. Trump’s changes could “cause a bifurcation of the market,” said Cori Uccello, senior health fellow at the American Academy of Actuaries. Insurers that offer plans under the ACA could face new difficulties, but companies also might find opportunities in offering new types of insurance.

Mr. Trump’s order, described by a senior administration official, will include broad instructions for federal agencies to loosen rules on health plans that the administration says have driven up premiums and reduced insurance offerings available to people who buy coverage on their own or who work for a small employer.

The order also will direct the Health and Human Services, Labor and Treasury Departments to lay the groundwork for the growth of association health plans, coverage that would have fewer mandated benefits than many current plans available to small employers and individuals.

The departments, in addition, will be told to take steps to expand the availability of short-term medical plans that had been curbed by the Obama administration.

The order will begin the reversal of the Obama administration’s stance that health insurance sold to people who don’t get coverage through a large employer had to be more tightly regulated by the federal government, with mandated packages of benefits and requirements that health plans be offered to and priced equally for everyone regardless of medical history.

“It could amount to effective deregulation of the individual and small-business insurance markets,” said Larry Levitt,  a senior vice president at Kaiser Family Foundation.

Some key details remained undefined by Sunday, ahead of the signing of any final version of the order, and questions remained in particular around the rules on association health plans. But the combined result of the approach, some analysts said, could be to usher in broad changes to the business of selling health coverage to small employers and maybe individuals.

President Barack Obama and fellow Democrats saw the ACA as a way to guarantee that people with prior health conditions could buy coverage and that health plans would cover a broad set of benefits, including maternity care and hospitalization, thus protecting consumers from unwittingly buying shoddy products. But Republicans have said the insurance rules have driven up premiums for healthier Americans especially.

The most consequential aspect of Mr. Trump’s order likely will be the moves toward expanding the use of association health plans, which would be treated more like the policies now offered by large employers with workers in different states. These policies would be available to small employers that want to band together to offer coverage that wouldn’t be subject to the full range of ACA requirements, such as the mandated package of benefits.

Health analysts have said that such plans likely would be attractive to employers and workers with limited health needs, leaving workers with costlier conditions to seek insurance in a pool with other, sicker people. Such a pool would have few healthy customers to offset costs; prices would likely rise.

The president also is set to order federal agencies to start winding back an Obama-era rule curbing coverage known as “short-term medical insurance,” a low-cost but limited-protection option, and to allow people to once again buy plans in that category that could last for almost a year.

Such plans, which can now only be carried for 90 days, often are sold only to people who qualify as healthy and don’t cover costs related to enrollees’ pre-existing conditions. They also can cap payouts and often don’t include benefits required of ACA plans, such as prescription-drug coverage.

If restored, analysts said, the more extensive short-term plans would again become more appealing to healthier customers seeking cheap alternatives to ACA plans, while higher-risk people would remain in traditional insurance coverage.

Young people could “flock” to the expanded short-term plans, said Jerry Dworak, chief executive of Montana Health Co-op, a nonprofit offering marketplace plans in Montana and Idaho. “It’s going to skim some of the low-risk people off the exchange.”

Some industry officials said consumers would benefit from expanding short-term medical insurance. “The current Obama-era rule required that they buy a new plan, with new deductibles every 90 days. This hurt consumers, and did nothing to stabilize the Affordable Care Act,” said Jeff Smedsrud, co-founder of the online insurance brokerage HealthCare.com.

The International Franchise Association, a trade group whose members say they have been hit hard by several parts of the ACA, praised the proposed expansion of association heath plans.

Some small business advocates disagreed.

“I agree that we need to find more options for small business, but AHPs are not the answer. They allow cherry picking that could undermine the traditional small group market,” said Rhett Buttle, director of private sector engagement at the Department of Health and Human Services during the Obama administration. “Additionally, they could lead to premium instability for small businesses and put some of their consumer protections at risk.”

A splitting of the market, should that occur, could carry mixed results for the insurance industry overall, said Deep Banerjee, an analyst with S&P Global Ratings. It could present difficulties for insurers that offer plans under the ACA, which might lose enrollment among healthy people at a time when they have locked in their rates and exchange-participation footprint for 2018, he said.

Currently, the biggest players offering ACA coverage for next year are mostly Blue Cross Blue Shield insurers and Medicaid-focused companies such as Centene Corp. and Molina Healthcare Inc.

At the extreme, “the ACA individual market could effectively become a high-risk pool in the future,” he said, and insurers might be reluctant to participate in certain markets in 2019 and later.

But, he said, the Trump administration’s moves, while likely hurting the existing ACA markets, might create new business for companies that offer short-term insurance and aren’t committed to a significant ACA exchange presence for next year, such asUnitedHealth Group Inc.

“Risk brings opportunity,” he said. “Those with significant exposure to association and short-term plans will benefit.”

Write to Louise Radnofsky at louise.radnofsky@wsj.com, Anna Wilde Mathews at anna.mathews@wsj.com and Stephanie Armour at stephanie.armour@wsj.com

Appeared in the October 9, 2017, print edition as ‘Trump Health-Insurance Order Could Divide Market.’

https://www.wsj.com/articles/trump-executive-order-could-divide-the-health-insurance-market-1507508894?mod=e2tw