Trump to Scrap Critical Health Care Subsidies, Hitting Obamacare Again
by Robert Pear, Maggie Haberman and Reed Abelson - NYT - October 12, 2017
WASHINGTON — President Trump will scrap subsidies to health insurance companies that help pay out-of-pocket costs of low-income people, the White House said late Thursday. His plans were disclosed hours after the president ordered potentially sweeping changes in the nation’s insurance system, including sales of cheaper policies with fewer benefits and fewer protections for consumers.
The twin hits to the Affordable Care Act could unravel President Barack Obama’s signature domestic achievement, sending insurance premiums soaring and insurance companies fleeing from the health law’s online marketplaces. After Republicans failed to repeal the health law in Congress, Mr. Trump appears determined to dismantle it on his own.
Without the subsidies, insurance markets could quickly unravel. Insurers have said they will need much higher premiums and may pull out of the insurance exchanges created under the Affordable Care Act if the subsidies were cut off. Known as cost-sharing reduction payments, the subsidies were expected to total $9 billion in the coming year and nearly $100 billion in the coming decade.
“The government cannot lawfully make the cost-sharing reduction payments,” the White House said in a statement.
It concluded that “Congress needs to repeal and replace the disastrous Obamacare law and provide real relief to the American people.”
In a joint statement, the top Democrats in Congress, Senator Chuck Schumer of New York and Representative Nancy Pelosi of California, said Mr. Trump had “apparently decided to punish the American people for his inability to improve our health care system.”
“It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” they said. “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.”
Lawmakers from both parties have urged the president to continue the payments. Mr. Trump had raised the possibility of eliminating the subsidies at a White House meeting with Republican senators several months ago. At the time, one senator told him that the Republican Party would effectively “own health care” as a political issue if the president did so.
“Cutting health care subsidies will mean more uninsured in my district,” Representative Ileana Ros-Lehtinen, Republican of Florida, wrote on Twitter late Thursday. She added that Mr. Trump “promised more access, affordable coverage. This does opposite.”
But Speaker Paul D. Ryan, Republican of Wisconsin, praised Mr. Trump’s decision and said the Obama administration had usurped the authority of Congress by paying the subsidies. “Under our Constitution,” Mr. Ryan said, “the power of the purse belongs to Congress, not the executive branch.”
The future of the payments has been in doubt because of a lawsuit filed in 2014 by House Republicans, who said the Obama administration was paying the subsidies illegally. Judge Rosemary M. Collyer of the United States District Court in Washington agreed, finding that Congress had never appropriated money for the cost-sharing subsidies.
The Obama administration appealed the ruling. The Trump administration has continued the payments from month to month, even though Mr. Trump has made clear that he detests the payments and sees them as a bailout for insurance companies.
This summer, a group of states, including New York and California, was allowed to intervene in the court case over the subsidies. The New York attorney general, Eric T. Schneiderman, said on Thursday night that the coalition of states “stands ready to sue” if Mr. Trump cut off the subsidies.
Mr. Trump’s decision to stop the subsidy payments puts pressure on Congress to provide money for them in a spending bill.
Senator Lamar Alexander, Republican of Tennessee and the chairman of the Senate health committee, and Senator Patty Murray of Washington, the senior Democrat on the panel, have been trying to work out a bipartisan deal that would continue the subsidy payments while making it easier for states to obtain waivers from some requirements of the Affordable Care Act. White House officials have sent mixed signals about whether Mr. Trump was open to such a deal.
The decision to end subsidies came on the heels of Mr. Trump’s executive order, which he signed earlier Thursday.
With an 1,100-word directive to federal agencies, the president laid the groundwork for an expanding array of health insurance products, mainly less comprehensive plans offered through associations of small employers and greater use of short-term medical coverage.
It was the first time since efforts to repeal the landmark health law collapsed in Congress that Mr. Trump has set forth his vision of how to remake the nation’s health care system using the powers of the executive branch. It immediately touched off a debate over whether the move would fatally destabilize the Affordable Care Act marketplaces or add welcome options to consumers complaining of high premiums and not enough choice.
Most of the changes will not occur until federal agencies write and adopt regulations implementing them. The process, which includes a period for public comments, could take months. That means the order will probably not affect insurance coverage next year, but could lead to major changes in 2019.
“With these actions,” Mr. Trump said at a White House ceremony, “we are moving toward lower costs and more options in the health care market, and taking crucial steps toward saving the American people from the nightmare of Obamacare.”
“This is going to be something that millions and millions of people will be signing up for,” the president predicted, “and they’re going to be very happy.”
But many patients, doctors, hospital executives and state insurance regulators were not so happy. They said the changes envisioned by Mr. Trump could raise costs for sick people, increase sales of bare-bones insurance and add uncertainty to wobbly health insurance markets.
Chris Hansen, the president of the lobbying arm of the American Cancer Society, said the order “could leave millions of cancer patients and survivors unable to access meaningful coverage.”
In a statement from six physician groups, including the American Academy of Family Physicians, the doctors predicted that “allowing insurers to sell narrow, low-cost health plans likely will cause significant economic harm to women and older, sicker Americans who stand to face higher-cost and fewer insurance options.”
While many health insurers remained silent about the executive order, some voiced concern that it could destabilize the market. The Trump proposal “would draw younger and healthier people away from the exchanges and drive additional plans out of the market,” warned Ceci Connolly, the chief executive of the Alliance of Community Health Plans.
Administration officials said they had not yet decided which federal and state rules would apply to the new products. Without changing the law, they said, they can rewrite federal regulations so that more health plans would be exempt from some of its requirements.
The Affordable Care Act has expanded private insurance to millions of people through the creation of marketplaces, also known as exchanges, where people can purchase plans, in many cases using government subsidies to offset the cost. It also required that plans offered on the exchanges include a specific set of benefits, including hospital care, maternity care and mental health services, and it prohibited insurers from denying coverage to people with pre-existing medical conditions.
The executive order’s quickest effect on the marketplaces would be the potential expansion of short-term plans, which are exempt from Affordable Care Act requirements. Many health policy experts worry that if large numbers of healthy people move into such plans, it would drive up premiums for those left in Affordable Care Act plans because the risk pool would have sicker people.
“If the short-term plans are able to siphon off the healthiest people, then the more highly regulated marketplaces may not be sustainable,” said Larry Levitt, a senior vice president for the Kaiser Family Foundation. “These plans follow no rules.”
Mr. Trump’s order would also eventually make it easier for small businesses to band together and buy insurance through entities known as association health plans, which could be created by business and professional groups. A White House official said these health plans “could potentially allow American employers to form groups across state lines” — a goal championed by Mr. Trump and many other Republicans — allowing more options and the formation of larger risk pools.
Association plans have a troubled history. Because the plans were not subject to state regulations that required insurers to have adequate financial resources, some became insolvent, leaving people with unpaid medical bills. Some insurers were accused of fraud, telling customers that the plans were more comprehensive than they were and leaving them uncovered when consumers became seriously ill.
The White House said that a broader interpretation of federal law — the Employee Retirement Income Security Act of 1974 — “could potentially allow employers in the same line of business anywhere in the country to join together to offer health care coverage to their employees.”
The order won applause from potential sponsors of association health plans, including the National Federation of Independent Business, the National Restaurant Association, the U.S. Chamber of Commerce and Associated Builders and Contractors, a trade group for the construction industry.
The White House released a document saying that some consumer protections would remain in place for association plans. “Employers participating in an association health plan cannot exclude any employee from joining the plan and cannot develop premiums based on health conditions” of individual employees, according to the document. But state officials pointed out that an association health plan can set different rates for different employers, so that a company with older, sicker workers might have to pay much more than a firm with young, healthy employees.
“Two employers in an association can be charged very different rates, based on the medical claims filed by their employees,” said Mike Kreidler, the state insurance commissioner in Washington.
Mr. Trump’s order followed the pattern of previous policy shifts that originated with similar directives to agencies to come up with new rules.
Within hours of his inauguration in January, he ordered federal agencies to find ways to waive or defer provisions of the Affordable Care Act that might burden consumers, insurers or health care providers. In May, he directed officials to help employers with religious objections to the federal mandate for insurance coverage of contraception.
Both of those orders were followed up with specific, substantive regulations that rolled back Mr. Obama’s policies.
In battles over the Affordable Care Act this year, Mr. Trump and Senate Republicans said they wanted to give state officials vast new power to regulate insurance because state officials were wiser than federal officials and better understood local needs. But under Thursday’s order, the federal government could pre-empt many state insurance rules, a prospect that alarms state insurance regulators.
Another part of Mr. Trump’s order indicates that he may wish to crack down on the consolidation of doctors, hospitals and other health care providers, a trend that critics say has driven up costs for consumers. Mr. Trump said that administration officials, working with the Federal Trade Commission, should report to him within 180 days on federal and state policies that limit competition and choice in the health care industry.
What Did Trump’s Health Care Executive Order Do?
by Margot Sanger-Katz - October 12, 2017
President Trump signed an executive order on Thursday that he said would begin “saving the American people from the nightmare of Obamacare.” There’s a lot that’s still uncertain about how the order will change the health law. Here’s what we know so far.
Is Obamacare repealed now?
“I just keep hearing repeal-replace, repeal-replace,” Mr. Trump said in the signing ceremony. “Well, we’re starting that process.”
If it’s a start, it’s largely a ceremonial one. The Affordable Care Act remains the law of the land, and none of the proposed changes would substantially alter its main provisions. The executive order could result in higher insurance premiums for some Obamacare customers and lower premiums for less regulated coverage for those who want to try new insurance options. It could cause some insurers to exit some markets in the long-term.
But the rules governing Obamacare insurance, the subsidies to help middle-income people buy it, the expansion of Medicaid to more poor adults, and Obamacare’s many other provisions touching health and health insurance remain the law.
The executive order could result in real changes for some people in the insurance market. But those changes are not the same thing as eliminating the health care law.
Did any laws change?
Not yet. The executive order has no force of law itself. It instead asked three federal agencies to consider possible new regulations that could help achieve certain goals. It is not clear what those rules will say. Generally, issuing new regulations takes several months, including a period of public comment.
None of the proposed changes to regulation are specifically tied to Obamacare. But they would alter the rules for parts of the insurance system that the Affordable Care Act didn’t touch, as a way of offering more Americans access to those types of insurance.
What will this mean for people who get insurance from work?
If you are insured by a large company that offers insurance, there should be few effects. But the order might make it easier for your employer to give you pretax money if you want to buy your own insurance.
If you work for a small business, the executive order could cause major changes to your plan. The order asks the Labor Department to loosen rules that permit small companies to band together to form associations and buy the kind of coverage available to larger businesses. These association health plans would be governed by federal employment law, not state insurance regulations.
That means that the plans would have far fewer rules about generosity or benefits. State insurance regulators might also have more trouble making sure that the insurers have enough money to pay their members’ medical bills. Such association health plans, before 1983, when rules were looser, were rife with fraud.
Businesses that are unable or unwilling to join such associations might face higher premiums in the Obamacare market. The kinds of companies that are likely to fare better in an association plan are probably those with relatively healthy employees. That means that businesses that remain in the normal small business market may end up having sicker and more expensive workers, on average, increasing premiums.
What will this mean for people who buy their own insurance?
A lot depends on the details, but it appears that a coming rule will expand a kind of short-term insurance plan designed for people who are in between jobs, making those plans available to more consumers who wish to find a cheaper, less comprehensive option than is available in the Obamacare marketplaces.
Such plans are currently exempt from most insurance rules. That means the plans can reject or charge higher prices to customers with pre-existing health conditions, can cover fewer benefits and can charge higher deductibles. Because they tend to be skimpier and insure only healthy customers, the plans’ prices tend to be lower. Under current regulation, such plans can last for only three months at a time. The order asks for a change to lengthen their duration, a directive likely to result in plans that last just under a year, the standard before this year. That change would make it easier to use such insurance as a substitute for Obamacare-compliant coverage.
It is possible that the association rule will allow self-employed people to join associations, but legal experts are skeptical that the labor laws will permit it.
If a lot of people decide to buy these short-term or association insurance plans, that will most likely leave fewer Americans in the Obamacare markets. And that smaller group is likely to have more people who care about comprehensive coverage and lower deductibles — that is, people with more health problems. The result could be higher prices for customers who remain. Most Obamacare customers get federal subsidies that help them buy insurance, and they would not feel the increases. But higher-income customers who choose to buy Obamacare insurance may need to pay more.
What will it mean for people with Medicaid or Medicare?
None of these changes directly affect them.
Will these changes lower the cost of insurance?
It’s complicated. If the rules are changed, some Americans will be able to buy insurance for a lower sticker price through the short-term market or an association. But that insurance is likely to cover fewer benefits, may not be available to people with a history of health problems, and may be more likely to be offered by a fraudulent company.
People who get insurance using government subsidies won’t notice much of a change in price, but they might see fewer options in the future, if the changes make the Obamacare market less attractive to insurers.
But people who pay full price now, who are denied short-term plans and who don’t work for companies that become part of associations will probably face higher prices for the Obamacare-compliant insurance they buy now.
Are there good examples of how this might work?
The Tennessee insurance market gives us some sense of what happens when some plans have to follow Obamacare rules, and others don’t.
The Tennessee Farm Bureau offers inexpensive insurance products that don’t adhere to Obamacare rules. The plans vary in price based on a customer’s health history, and don’t cover all the benefits of an Obamacare plan. The Obamacare insurance market, as a result, is shakier than in many other states, since there are fewer people buying insurance there, and they tend to be less healthy. Earlier this year, it appeared that the Knoxville area might not have any insurance options next year — though the local Blue Cross plan did eventually fill the hole.
In Tennessee, people who buy Farm Bureau plans still have to pay Obamacare’s individual mandate — a tax penalty. It is unclear whether the Trump administration will try to make more exceptions to the penalty rules, which could cause even more people to leave the Obamacare market.
When will we know more details?
Probably soon. The agencies charged with writing new rules have been working on them. Initial proposals may emerge within weeks, though any changes are unlikely to be completed before the end of the year.
Trump’s Obamacare Order Will Deepen Health Inequality
by David Anderson - NYT - October 13, 2017
President Trump’s executive order to change two areas of the health insurance market will generate significant headlines and controversy, but their impact on the individual insurance market has likely been overstated. It is sound and fury signifying little structural change.
Despite the rhetoric — “straight up sabotage” and “chaos” — the fundamental structure of the Affordable Care Act individual market will remain stable. Most people who receive subsidies to buy insurance on the exchanges, get insurance through Medicare and Medicaid or are covered by an employer will not notice significant changes to their insurance.
But there is a catch. One group of people will bear the burden of significantly, perhaps crushingly, heavier insurance premiums: those with expensive, chronic conditions who buy their insurance on the individual market but who make too much money to qualify for subsidies.
These individuals — the number is extremely difficult to pin down, but one estimateput it at somewhere around eight million people — need help from people who are paying premiums but are not using many services.
Obamacare tries to build large, comprehensive “risk pools” in which the healthy and the unhealthy commingle. This has never been perfectly achieved: There are too many channels that allow low-risk individuals and groups to avoid keeping costs down for the unhealthy. This executive order dredges new channels for the healthy to segregate their costs from people with expensive care needs.
The executive order instructs the Department of Labor to make a new rule to redefine association health plans so that more small groups can band together to purchase insurance. Association health plans have a long history serving the small group market. A 2006 study estimated that 30 percent of all small-business employers insured their employees through an association health plan.
Association health plans are not tightly regulated under Obamacare; it regulated fully insured direct purchase plans in the individual and small group markets. Large association plans are exempt from state benefit regulation and can offer narrower benefits. Furthermore, association plans can be selective; high risk individuals would not be invited to join.
Employers that remain in the A.C.A. small-group market will offer plans that are more expensive than average, and they will see premiums increase. Only the sickest groups would remain in the A.C.A. regulated risk pool after several enrollment cycles.
However, the association health plan expansion is not the only factor contributing to a sicker and more expensive risk pool in A.C.A.-regulated plans. Sophisticatedinsurers and benefit consultants sell small group underwritten products that are regulatory workarounds to Obamacare requirements.
The executive order will exacerbate a trend that splits the small group risk pool into low-cost and high-cost segments. Fewer small employers will be able to afford to offer the comprehensive insurance that is part of the A.C.A. This logic is powerful in the small group market, but it is far weaker in the individual market.
The executive order also instructs the Department of Health and Human Services to make a rule to reverse a 2016 regulation that limits short-term individual insurance to a single 90-day period. It would restore the status quo of the 2014 to 2016 benefit years, when limited-duration plans could span as long as 364 days and could be renewed. These plans often offer limited benefits, require high cost sharing and exclude individuals with pre-existing conditions. In 2015, about 148,100 people were insured under these policies at any time.
The executive order will increase the relative attractiveness of underwritten short-duration plans for low-risk individuals. Plans that last 364 days and offer limited benefits to only healthy people will have low premiums for healthy people. Some healthy people will leave the regulated individual market for a better short-term deal. As healthier individuals leave the A.C.A.’s risk pool, the average health of the remaining people in the individual market risk pool will decline.
Insurers won’t run from the market, but they will raise premiums to cover a sicker group of people. Higher premiums do very little harm to individuals who qualify for premium tax credit subsidies. They are insulated from major price hikes.
Who will pick up the tab for bigger subsidy checks? The United States Treasury.
Single adults making more than $48,240 or families of four earning more than $98,400 will be the biggest losers. These people don’t qualify for subsidies, so they pay the full cost of the premiums. Higher premiums will come out of their hide. Senator Bill Cassidy, Republican of Louisiana, frequently points to a constituent who already pays over $40,000 to insure his family every year. His choices will get worse. He can go without coverage, pay more, earn less so his family could qualify for subsidies or find a job with employer-sponsored coverage.
The executive order will weaken the risk pools that are regulated by the A.C.A. The proposed new rules will not occur instantly, and insurers will have the ability to change strategies and models in time for the 2019 open enrollment.
The steps are part of a broader trend to split risk pools so that currently healthy people do not bear the burden of paying for the care of currently unhealthy people. The new executive order merely accelerates this trend toward greater health inequality.
Congress Can’t Let Mr. Trump Kill Obamacare on His Own
by the Editorial Board - NYT - October 13, 2017
Fed up with failed attempts in Congress to repeal the Affordable Care Act, President Trump on Thursday took matters into his own hands, signing an executive order that could significantly damage the health insurance market and harm millions of people.
Mr. Trump directed his administration to effectively create an alternative health insurance system that does not include the safeguards of the A.C.A. and could sabotage that 2010 law, one of his predecessor’s biggest accomplishments. The president claims that this will help people obtain cheaper insurance. In reality, it most likely will force insurance companies to abandon the A.C.A.’s insurance exchanges and ultimately precipitate a collapse of an important part of Obamacare.
The president is proposing two main changes: to expand the use of short-term insurance policies and to make it easier for professional and trade associations to sell health coverage to members across the country. Officials at the Departments of Health and Human Services, the Treasury and Labor will now come up with a rule after seeking public comment over the next several months.
Let’s start with short-term health policies. The Obama administration put in place rules that the policies could last 90 days and were not renewable. They’re currently meant for people between jobs. Mr. Trump is directing his aides to extend these plans and make them renewable, arguing that because these policies tend to be cheaper, this change could benefit millions of people. Short-term plans indeed cost less than yearlong policies, but that is because they are not as comprehensive. For example, many do not cover maternity care, cancer treatment or prescription drugs. And short-term policies often do not pay for treatment for pre-existing conditions, a signature requirement of Obamacare policies.
Mr. Trump also wants to expand the use of association health plans, which have been around for years but have a terrible track record. These plans typically work by insuring the employees of small and medium-size businesses that have something in common. A national plumbers association, say, might offer a plan to all of its members and their employees. These plans are lightly regulated by the federal government and often face little oversight by states because their beneficiaries are spread out across the country.
A 1992 General Accounting Office report found such plans had left nearly 400,000 members and their beneficiaries with $123 million in unpaid medical claims between 1988 and 1991. The Trump administration says it will require these plans to meet some of the requirements of the A.C.A., like protections for people with pre-existing conditions, but it has provided few details.
The combined effect of these changes will be to destabilize the A.C.A.’s individual market, which is used by nine million people to buy health insurance. Younger and healthier people will be tempted to buy a skimpy short-term policy with low premiums and switch to a policy that complies with the A.C.A. only when they need medical care. Knowing that Obamacare policies will tend to attract older and sicker people, insurers will probably jack up premiums or withdraw altogether in sparsely populated counties.
State governments, public interest groups and others will seek to prevent some of the damage from the order. There is some hope that they will be able to shape the regulations during the public comment period. If the final rules are still harmful, some groups will most likely file lawsuits.
But Mr. Trump is determined to disrupt Obamacare. Before this order, he threatened to stop making subsidy payments to insurers, which forced many to raise rates for 2018. His administration has shortened the A.C.A. open enrollment period during which people can buy coverage for next year. Funding aimed at helping people enroll — like money for advertising and health navigators — has been slashed.
Congress must step in. Lawmakers need to finish work on much-talked about bipartisan legislation to strengthen the A.C.A. America’s long-term health depends on it.
We’re Tracking the Ways Trump Is
Scaling Back Obamacare. Here Are 12.
by Haeyoun Park - NYT - October 12, 2017
The Trump administration continues to take action that could weaken the Affordable Care Act and curtail enrollment in coverage under the law. So far, it has:
1 Said it would end subsidies to health insurance companies that help low-income people pay out-of-pocket medical costs. Announced on Oct. 12.
2 Opened the door for sales of less expensive plans with fewer benefits and fewer protections for consumers. Signed executive order on Oct. 12.
3 Decided not to send health department officials to local open enrollment events in states. First reported on Sept. 27.
4 Decided to shut down the Affordable Care Act website for 12 hours nearly every Sunday during open enrollment. First reported in September.
5 Said it would cut by 40 percent funding to groups that help people enroll. Announced on Aug. 31.
6 Said it would slash spending on advertising and promotion for enrollment to $10 million from $100 million. Announced on Aug. 31.
7 Made videos criticizing the health law and posted them on YouTube. In June and July.
8 Posted infographics criticizing the health law on Twitter. Mostly in late June and mid-July.
9 Made tax credits for premiums less generous. Finalized in April.
10 Used news releases to spread negative information about the law. As early as February.
11 Weakened enforcement of the individual mandate. Reported in February.
12 Removed useful guidance for consumers about the law from its website. As early as Jan. 20.
In New Test for Obamacare, Iowa Seeks to Abandon Marketplace
by Abby Goodnough - NYT - October 10, 2017
WASHINGTON — With efforts to repeal the Affordable Care Act dead in Congress for now, a critical test for the law’s future is playing out in one small, conservative-leaning state.
Iowa is anxiously waiting for the Trump administration to rule on a request that is loaded with implications for the law’s survival. If approved by the federal Centers for Medicare and Medicaid Services, it would allow the state to jettison some of Obamacare’s main features next year — its federally run insurance marketplace, its system for providing subsidies, its focus on helping poorer people afford insurance and medical care — and could open the door for other states to do the same.
Iowa’s Republican leaders think their plan would save the state’s individual insurance market by making premiums cheaper for everyone. But critics say the lower prices come at the expense of much higher deductibles for many with modest incomes, and that approval of the plan would amount to another way of undermining the law. Already the administration has slashed funding for advertising and outreach to help people sign up for insurance, and President Trump is preparingto issue an executive order allowing more access to plans that don’t meet the law’s standards.
Adding to the uncertainty, the Washington Post reported last week that Mr. Trump in August asked Seema Verma, the federal official in charge of reviewing Iowa’s plan, to reject it. Some supporters of the law saw that as a deliberate effort to keep premiums high; Mr. Trump frequently cites sharply rising premiums as proof that the health law is failing.
Neither C.M.S. nor the White House would comment on whether Mr. Trump had pushed for the application to be denied. A spokeswoman for C.M.S. said only that the plan remains under review.
In Des Moines on Tuesday, Gov. Kim Reynolds told reporters that her team was in constant contact with the White House and C.M.S. about the plan, including a call with Ms. Verma this week, trying “to get to yes.” She said the administration has been “very receptive” to the plan as a solution to the “unaffordable,” “unworkable” health law until it can be repealed.
Iowa calls its request a stopgap plan that would allow the state to opt out of the federal health insurance marketplace, HealthCare.gov, for 2018 and create a state-run system that its insurance commissioner says would lower premiums for the 72,000 Iowans who currently have Obamacare health plans, including 28,000 who earn too much to get subsidies to help with the cost.
But the cheaper premiums would come with a big trade-off: higher out-of-pocket costs. The only option for customers would be a plan with deductibles of $7,350 for a single person and $14,700 for a family. The proposal would also reallocate millions of federal dollars that the health law dedicates to lowering costs for people with modest incomes and use the money for premium assistance to those with higher incomes, no matter how much money they make.
The individual insurance market is particularly fragile in Iowa, partly because the state has allowed tens of thousands of people to keep old plans that do not meet the health law’s standards. Aetna and Wellmark Blue Cross & Blue Shield, the state’s most popular insurer, are both withdrawing at the end of the year. The only insurer planning to remain, Medica, is seeking premium increases that average 56 percent, blaming Mr. Trump’s ongoing threats to stop paying subsidies known as cost-sharing reductions that lower many people’s deductibles and other out-of-pocket costs. Wellmark has said it will stay if the stopgap plan is approved.
“What we are trying to address is a really large number of people being priced out,” said Doug Ommen, the state’s Republican insurance commissioner.
Two other states, Alaska and Minnesota, have already won permission to shore up their Obamacare markets with waivers allowed under the law; they will use federal money to help insurers cover the claims of their most expensive customers next year. But Oklahoma abruptly withdrew a similar request in late September — one that state officials said would have reduced premiums by an average of 30 percent — saying that the Trump administration had reneged on a promise to approve it by Sept. 25 and they were out of time.
Iowa’s waiver request is more far-reaching, providing what Timothy S. Jost, an emeritus professor of health law at Washington and Lee University, has called a “watershed moment” for Obamacare.
“It’s a decision to abandon a number of key principles of the Affordable Care Act,” he said.
Under the law, people who don’t get insurance through work can buy it through the online marketplace. They get federal subsidies to help with the cost if their income is below 400 percent of the poverty level, or about $65,000 a year for a couple. Those whose incomes are below 250 percent of the poverty level — $40,600 a year for a couple — also get cost-sharing reductions.
Iowa’s plan would reallocate much of that federal assistance, using it to provide premium subsidies based on age and income for even the wealthiest individual market customers. It would also be used to create a “reinsurance” program, like Alaska’s and Minnesota’s, to help insurers cover their sickest customers. The law’s essential health benefits and protections for people with pre-existing conditions would remain in place, but every individual market customer would get the same standardized high-deductible plan.
Mr. Jost and other supporters of the law say Iowa’s proposal does not meet the requirements for so-called innovation waivers, including that the coverage they provide must be at least as comprehensive and affordable as Obamacare plans, because poorer people would face higher deductibles and other out-of-pocket costs. That, they say, leaves the plan open to almost-certain legal challenges.
Seemingly acknowledging that problem, Mr. Ommen has tweaked Iowa’s proposal — including with a supplemental filing to the Trump administration on Thursday — to preserve subsidies that reduce out-of-pocket costs for roughly 21,000 low-income Iowans.
But those at slightly higher income levels would lose cost-sharing assistance completely, facing the $7,350 deductible and other out-of-pocket expenses.
“You still have some real problems from the perspective of making sure low-income people can afford coverage,” said Joel Ario, a managing director at Manatt Health who worked on the Affordable Care Act at the Department of Health and Human Services during the Obama administration.
But for the roughly 28,000 Iowans who have Obamacare coverage but earn too much to get subsidies, the need for a shake-up is urgent. And with open enrollment starting in about three weeks, time is of the essence.
Dozens of them, including many farmers, submitted comments to Mr. Ommen or testified at public hearings in favor of the stopgap plan, with many saying they would be forced to drop their insurance next year if it were not approved.
“Fortunately both my husband and I have already prepaid our funeral expenses,” write a woman identified as Nancy K., of Bellevue, who said she could no longer afford her coverage. “Every single item, even our cemetery marker, is paid for or covered for my death in the event that we cannot afford insurance to pay for any so-called catastrophic health care.”
Landi Livingston, whose family raises beef cattle in rural southern Iowa, said she was paying almost $500 a month for a Wellmark plan and dreaded having to switch to Medica next year, with what she assumed would be significantly higher prices.
If the Trump administration approves the state’s request, Ms. Livingston’s premium would likely drop to around $350 a month, according to estimates from the state, saving her $1,800 next year. But her $3,000 deductible would more than double, meaning that if she had high medical expenses she could end up paying more toward those bills.
“I still think it’s the best thing on the table right now,” she said of the stopgap plan. “It’s high time the people in power get this figured out.”
For Tony Ross, a retired paralegal in Des Moines who has a subsidized marketplace plan from Aetna, the stopgap plan would lower his premiums to about $85 a month, from $220, according to the state estimates. But his deductible – currently $750 because his low income qualifies him for cost-sharing reductions – would balloon by almost tenfold. That would mean paying thousands more each year for his expensive blood pressure medication, he said.
“Obviously I need a way lower deductible than $7,350,” said Mr. Ross, 63. “This doesn’t seem like a fair way of fixing things.”
Foiled in Congress, Trump Moves on His Own to Undermine Obamacare
by Robert Pear and Reed Abelson - NYT - October 11, 2017
WASHINGTON — President Trump, after failing to repeal the Affordable Care Act in Congress, will act on his own to relax health care standards on small businesses that band together to buy health insurance and may take steps to allow the sale of other health plans that skirt the health law’s requirements.
The president plans to sign an executive order “to promote health care choice and competition” on Thursday at a White House event attended by small-business owners and others.
Although Mr. Trump has been telegraphing his intentions for more than a week, Democrats and some state regulators are now greeting the move with increasing alarm, calling it another attempt to undermine President Barack Obama’s signature health care law. They warn that by relaxing standards for so-called association health plans, Mr. Trump would create low-cost insurance options for the healthy, driving up costs for the sick and destabilizing insurance marketplaces created under the Affordable Care Act.
“It would have a very negative impact on the markets,” said Mike Kreidler, the insurance commissioner in Washington State. “Our state is a poster child of what can go wrong. Association health plans often shun the bad risks and stay with the good risks.”
They also worry that the Trump administration intends to loosen restrictions on short-term health insurance plans that do not satisfy requirements of the Affordable Care Act.
“By siphoning off healthy individuals, these junk plans could cannibalize the insurance exchanges,” said Topher Spiro, a vice president of the Center for American Progress, a liberal research and advocacy group. “For older, sicker people left behind in plans regulated under the Affordable Care Act, premiums could increase.”
But to business groups, the executive order offers an opportunity to bind their members together and sell large-group insurance policies that are cheap and attractive. Dirk Van Dongen, the president of the National Association of Wholesaler-Distributors, said that he was delighted with Mr. Trump’s initiative and that his group would seriously consider establishing an association health plan.
“Small to midsize businesses have very little leverage in the insurance market,” Mr. Van Dongen said. “Anything that allows them to amalgamate their purchasing power will be helpful.”
Large employer-sponsored health plans are generally subject to fewer federal insurance requirements than small group plans and coverage purchased by individuals and families on their own. They are generally not required to provide “essential health benefits,” such as emergency services, maternity and newborn care, mental health coverage and substance abuse treatment, although many do.
A decision by Obama appointees in 2011 discouraged the use of association health plans as a substitute for Affordable Care Act policies because officials feared they would be used to circumvent the law’s coverage mandates. The Obama administration said that coverage offered to dozens or hundreds of small businesses through a trade or professional association would not be treated as a single large employer health plan for the purpose of insurance regulation.
Instead, the Obama administration said, the government would look at the size of each business participating in the association, so that many small employers would still be subject to stringent federal rules.
The Trump administration, by contrast, wants to make it easier for small businesses to buy less expensive plans that do not comply with some requirements of the 2010 law.
Several states considered bills to treat health plans offered to small employers through a trade association as large-group coverage, exempt from federal rules that apply to small businesses. But the Obama administration blocked those efforts, saying they were pre-empted by the Affordable Care Act. Trump administration officials are reconsidering that interpretation, in view of the president’s vow to increase access to less expensive insurance.
Large-group plans are still subject to some requirements of the Affordable Care Act. They generally must cover children up to age 26 on their parents’ plans, cannot impose lifetime limits on covered benefits and cannot charge co-payments for preventive services like mammograms and colonoscopies.
But they are generally exempt from the requirements to provide a specified package of benefits and to cover a certain percentage of the cost of covered services.
The Trump administration is also looking for ways to ease restrictions on short-term health insurance plans that do not meet requirements of the Affordable Care Act. Under a rule issued last October by the Obama administration, the duration of such short-term plans, purchased by hundreds of thousands of people seeking inexpensive insurance, must be less than three months. The rules previously said “less than 12 months.”
The Obama administration said some insurers were abusing short-term plans and keeping healthier consumers out of the Affordable Care Act marketplaces. People are buying these short-term plans as their “primary form of health coverage,” and some insurers are pitching the products to healthier people, the Obama administration said.
But Trump administration officials say that with insurance premiums soaring in many states, consumers should be able to buy less comprehensive, less expensive coverage as an alternative to conventional plans. The U.S. Chamber of Commerce said short-term policies “serve an important purpose for consumers” who are between jobs.
That has some insurance experts worried. The influx of a set of plans exempt from the Affordable Care Act rules will essentially divide the market and make it increasingly unstable, said Rebecca Owen, a health research actuary with the Society of Actuaries.
People who want or need broad coverage could find it increasingly difficult to obtain an affordable policy, experts say. While the administration’s goal may be to give people a broader choice of plans, it could have the opposite effect on people who need or want the robust coverage available under the Affordable Care Act.
“The easier you make it not to buy comprehensive coverage, the harder you make it to buy comprehensive coverage,” said Katherine Hempstead, a health policy expert at the Robert Wood Johnson Foundation.
As they waited for details of the executive order, health insurers still offering coverage in the online marketplaces created by the health care law were apprehensive.
Those insurers are most jittery about the possibility of a surge in short-term plans. Many of the large national insurers, like UnitedHealth Group, already offer these plans, and there would be little difficulty in their introducing more because of the executive order, analysts said.
“They can cobble these things together pretty easily,” said John Graves, a health policy expert at Vanderbilt University.
Individuals may already be attracted to short-term plans because of their low costs. These plans tend to limit benefits or offer policies only to people who do not have expensive medical conditions.
Short-term policies do not satisfy the coverage requirements of the Affordable Care Act, so consumers who buy them may be subject to tax penalties. But with the price of conventional insurance policies rising at double-digit rates, some people say they are willing to pay a penalty so they can buy a cheaper plan.
The introduction of new association plans could take much longer, according to insurers and other experts. The administration would need to work out the regulatory details, and groups would need to construct those plans.
But these plans pose some of the same risks, and industry experts warn that they have a history of leaving consumers with unpaid medical bills if they are not adequately regulated.
While association health plans can be well run, they “have had a spotty track record,” said Ms. Owen, the actuary. In the past, some plans failed because they did not have enough money to pay their customers’ medical bills, while some insurance companies were accused of misleading people about exactly what the plans would cover.
Trump to sign executive order to gut ACA insurance rules and undermine marketplaces
by Amy Goldstein - The Washington Post - October 12, 2017
President Trump is due to sign an executive order Thursday morning intended to allow individuals and small businesses to buy a long-disputed type of health insurance that skirts state regulations and Affordable Care Act protections.
The White House and allies portray the president’s move to expand access to “association health plans” as wielding administrative powers to accomplish what congressional Republicans have failed to achieve: tearing down the law’s insurance marketplaces and letting some Americans buy skimpier coverage at lower prices. The order will be Trump’s biggest step to carry out a broad but ill-defined directive his first night in office for agencies to lessen ACA regulations from the Obama administration.
Critics, who include state insurance commissioners, most of the health-insurance industry and mainstream policy specialists, predict that a proliferation of such health plans will have damaging ripple effects: driving up costs for consumers with serious medical conditions and prompting more insurers to flee the law’s marketplaces. Part of Trump’s actions, they predict, will spark court challenges over their legality.
According to numerous people familiar with the White House’s anticipated order, the most far-reaching element will be instructing a trio of Cabinet departments to rewrite federal rules for association health plans — a type of insurance in which small businesses of a similar type band together through an association to negotiate health benefits.
The order also is expected to expand the availability of short-term insurance policies, which offer limited benefits meant as a bridge for people between jobs or young adults no longer eligible for their parents’ health plans. The Obama administration ruled that short-term insurance may not last for more than three months; Trump is planning to extend that to nearly a year.
President Trump said on Oct. 10 that he would be signing a health-care action this week. "It will cost the United States nothing," he said. (The Washington Post)
In addition, Trump’s action is intended to widen employers’ ability to use pretax dollars to help workers pay for any medical expenses, not just for health policies that meet ACA rules — another reversal of Obama policy.
The executive order will fulfill a quest by conservative Republicans, especially in the House, who have unsuccessfully sought for more than two decades to expand the availability of association health plans, allowing them to be sold, unregulated, across state lines.
As details of what the president is likely to sign spread in Washington in recent days, health policy experts in think tanks, academia and the health-care industry emphasized that the order’s final language — and the ensuing fine print from agencies’ rules — will determine whether the impact will be as sweeping or quick as Trump has boasted.
“It’s going to cover a lot of territory and a lot of people, millions of people,” the president said two weeks ago. On Tuesday, he added: “It will be great, great health care for many, many people.”
In an interview Wednesday night with Sean Hannity of Fox News, he again predicted a big impact. “People say 30 percent, some people say 25 percent and some people say it could be 50 percent,” Trump told Hannity. “It’s going to cover a large percentage of the people that we’re talking about.”
The action will come three weeks before the Nov. 1 start of the fifth open-enrollment season in ACA marketplaces for people who do not have access to affordable health benefits through a job. It is uncertain whether the departments — Health and Human Services, Treasury and Labor — will finalize rules carrying out the order in time for new insurance to be sold for 2018.
After failing to repeal and replace the Affordable Care Act, Republican leaders said it will "implode." Health-care experts disagree, saying the ACA is stable under current law — but President Trump and congressional Republicans could change that.(Daron Taylor/The Washington Post)
Even so, with a shortened sign-up period and large cuts in federal funds for advertising and enrollment help already hobbling the marketplaces, “if there’s a lot of hoopla around new options that may be available soon, it could be one more thing that discourages enrollment,” said Larry Levitt, Kaiser Family Foundation’s senior vice president.
The National Association of Insurance Commissioners (NAIC) is among the groups that have long opposed any expansion of coverage that bypasses state regulation. In congressional testimony in February, the NAIC said allowing health plans to be sold without requiring either state licenses or federal approval “would result in less protections for the most vulnerable populations and the collapse of individual markets.”
Under the president’s anticipated order, association health plans will be able to avoid many ACA rules, including the law’s benefits requirements, limits on consumers’ yearly and lifetime costs, and ban on charging more to customers who have been sick. Critics say that young and healthy people who use relatively little insurance would gravitate to those plans because of their lower price tags, while older and sicker customers would be concentrated in ACA marketplaces with spiking rates.
“It would be different pools under different rules,” said one senior health policy source who spoke on the condition of anonymity since the order is not yet public.
Currently, short-term health insurance makes up a tiny fraction of the policies sold, with fewer than 30 companies covering only about 160,000 people nationwide at the end of last year, according to NAIC data.
Experts could not point to figures for how many association health plans exist or how many people they insure. Such arrangements have existed for decades, and scandals have on occasion exposed “multi-employer welfare arrangements” started by unscrupulous operators who took members’ money and either did not have enough reserves to cover hospital bills or absconded with premiums.
The National Federation of Independent Business, the small-business lobby, has pressed Congress to allow use of association plans, arguing that they can be less expensive and give workers more insurance choices. This year, Sen. Ted Cruz (R-Tex.) pushed an amendment to unsuccessful ACA-repeal legislation that would have had a parallel effect, letting any insurer selling at least one policy that met the law’s coverage rules also sell skimpier and cheaper plans.
Selling health plans from state to state without separate licenses — the idea underlying much of the president’s anticipated order — has long been a Republican mantra. It has gained little traction in practice, however.
Before the ACA was passed in 2010 as well as since then, half a dozen states have passed laws permitting insurers to sell health policies approved by other states. And since last year, the ACA has allowed “compacts” in which groups of states may agree that health plans licensed in any of them could be sold in the others. Under such compacts, federal health officials must make sure the plans offer at least the same benefits and are as affordable as those sold in the ACA marketplaces.
As of this summer, “no state was known to actually offer or sell such policies,” according to a report by the National Conference of State Legislatures.
What the president has in mind is different in important ways. Association health plans no longer will have to be licensed by a state in which they are sold, and they will not need approval under federal rules. In addition, individuals will be able to become part of associations — not just small businesses.
The prospect of letting individuals be part of these associations is the aspect of the executive order likely to draw legal complaints. The 1974 ERISA law, which permits large companies that insure themselves to do so with relatively little federal regulation, could be reinterpreted to apply to small businesses that band together, according to health policy experts familiar with the law. But ERISA does not apply to individuals buying coverage on their own.
Why I Almost Fired My Doctor
by Bob Brody - NYT - October 12, 2017
I always liked my primary care doctor personally. He routinely welcomed me to his office with a cheery hello and a smile. We asked about each other’s children. We often discussed our respective exercise regimens, running in his case and pickup basketball in mine. For more than 20 years, we even confided about our ambitions as writers.
But I often questioned his judgment in medical matters.
Take, for example, the time my neck bothered me. I complained to him about frequent soreness and stiffness – probably a result of spending hours planted in front of a computer. He suggested I obtain a neck brace to wear while working. “Is that necessary?” I asked him. No, he said.
At no point did he ask me where my neck hurt, or how much, or how often. He never physically examined my neck, nor instructed me to turn my head in order to observe my range of motion. He neglected to propose I do specific exercises to rehabilitate my neck or get a new chair or just take frequent breaks from sitting at a keyboard.
Rather, he advised me to see an orthopedist or physiatrist. He also printed out some medical journal articles about neck problems for me to read, all well over my head.
Some time later, my annual physical revealed my overall cholesterol level to be borderline high. “I should probably put you on a statin,” my doctor said. “I could prescribe Lipitor.” “Would that be necessary?” I asked him. No, he said.
“It’s a trend that reflects the state of medicine today,” Dr. Danielle Ofri, associate professor of medicine at NYU Langone Medical Center and author of “What Patients Say, What Doctors Hear,” told me. “Physicians are so risk-averse they prescribe medications as a default and reflexively refer patients to specialists. It’s systemic.”
What to do? After all, this was my health here. As a lifelong recreational athlete and fitness enthusiast, I’d entered my 60s healthy, but eventually – inevitably – my age would catch up with me. Was I going to risk my longevity to avoid hurting my doctor’s feelings? I needed a physician I respected and trusted. Should I stick with the status quo or take a hike?
“Your experience is more common than was the case even 20 years ago,” Dr. Michael Fleming, former president of the American Academy of Family Physicians, told me. “It can be very frustrating to be a patient nowadays. That’s why they’re more inclined to switch doctors than ever before.”
A 2001 study in the Journal of Family Practice showed that one-fifth of patients left their primary care doctors voluntarily over a three-year period. Patient satisfaction with the relationship often predicted loyalty, the research revealed. Indeed, patients with the poorest physician relationship were three times more likely to leave than those with high-quality relationships. Today, those figures might be even higher: With the upheavals in insurance coverage and physicians increasingly available at a pharmacy, urgent care center or via telemedicine, some people no longer even visit their own primary care doctors.
My most recent appointment with my doctor made reaching a decision much easier. For years, he discussed my health with me in his office while typing his observations into an electronic health record on his computer. He would turn sideways to talk with me, then look back at his screen. He typically looked at the computer more than at me, but at least I could see his face.
In my latest visit, that arrangement was no more. Instead, he sat at a computer in his examining room with his back to me. Yes, he literally turned his back on me. I could still hear his voice but now without seeing his face.
“The electronic medical record has turned physicians into data entry technicians,” Dr. Russell Phillips, director of the Center for Primary Care at Harvard Medical School, told me. “It inserts an interference between doctor and patient.” A study last year in the Annals of Internal Medicine painted a picture of this predicament. It showed that while physicians are in the examination room with patients, they spent only 53 percent of their time on face-to-face contact and 37 percent on medical records and other administrative chores.
Clearly I now had to turn my back on my doctor, too. The big question was, how? How do you go about firing your longtime doctor? Does the American Medical Association recommend a protocol? Do you just say, “Your services are no longer required?” Or “I’m sorry, but I’ve decided to take my health in a different direction?” Or “Forgive me, but I need to start seeing someone else?”
“So many patients have no idea about how to approach this struggle, and they feel bad about the idea,” George Blackall, associate professor at Pennsylvania State University College of Medicine and co-author of “Breaking the Cycle: How to Turn Conflict Into Collaboration When You and Your Patients Disagree,” told me. “You should reach out to talk to your doctor. That’s the key. Make clear how you feel. Say what you need.”
How physicians feel about themselves may actually translate into how patients feel about them. The more satisfaction internists take in practicing medicine the more satisfied their patients are likely to be, a study in the Journal of General Internal Medicine concluded. And the reverse also appears to be true. “Burnout and caregiver fatigue among physicians is a real and growing problem that impacts patients,” a spokesman for the American Medical Association told me.
In Mayo Clinic Proceedings last year, Dr. Tait Shanafelt, director of the Mayo Clinic’s program on physician well-being, said, “Research has shown that more than half of U.S. physicians are experiencing symptoms of burnout, and the rate is increasing.”
As I agonized over my decision, a Facebook friend who also goes to my doctor delivered a surprise: She posted a message saying that he would be retiring soon. So I called his office to verify. Yes, the receptionist told me, he would be retiring next month.
So I was spared having to tell him I was defecting, and I’ll soon be seeing another doctor anyway. Mine quit his job before my health went on me (and possibly before his did, too). As it turns out, he’s done me a big favor. Ending his career just might have saved my life.
EMMC reverses decision on eliminating paid chaplains
by Judy Harrison - Bangor Daily News - October 12, 2017
Eastern Maine Medical Center announced Wednesday that a decision to eliminate a paid chaplaincy program has been reversed and a full-time coordinator of chaplaincy services will be hired.
The decision last month to go to an all-volunteer chaplaincy service drew protesters outside the hospital and harsh criticism from a national chaplains’ organization.
“Since announcing this decision, members of the spiritual community, Board of Trustee members, and others have provided feedback which has been taken into consideration,” a news release issued Wednesday said. “Based on these discussions, Eastern Maine Medical Center announces the creation of a full-time trained chaplain lead position to guide the program’s continued development.”
The new hire would co-ordinate the 50 or so area chaplains who volunteer at the hospital. On-call chaplains, who will provide 24/7 coverage for patient requests will receive a stipend for each call they take.
The existing Chaplain Internship Program with Grace Evangelical Seminary in Bangor will continue, the press release said.
“The Chaplain Advisory Group will be formally chartered to provide guidance to the program,” the release said, “Eastern Maine Medical Center will continue to strengthen its relationship with the spiritual community and will launch regular gatherings to provide an opportunity for us to discuss the program, review trends in requests for spiritual support, and to create an environment for continuing education.”
Previously, EMMC had one full-time chaplain, the Rev. Rex Garrett, 70, of Holden, and two part-time pastors. Garrett, who a chaplain at the hospital for more than 31 years, said last month he would retire but continue to volunteer.
The Rev. Lee Whitting, 74, of Penobscot, who worked 20 hours per week, and Rev. Art Gowie, 72, of Bangor, who works 28 hours per week, were let go.
Whitting organized a small protest outside EMMC on Sept. 19 after he learned of the decision to go eliminate the paid chaplaincy program. He said then that an all-volunteer program would leave patients and their families underserved.
“The hospital is cutting out a key program that cannot be made up for with volunteers,” he said. “The chaplain is part of the trauma team. We can be in the emergency exam room. We deal with the patients and their families. Chaplains also help staff going through a crisis.”
While a hospital spokeswoman last month said that going to an all volunteer program was a national trend, a spokeswoman for the National Association of Professional Chaplains said it was not the trend nationally for large trauma hospitals that serve large geographic areas as EMMC does.
“I can safely say that this is not a trend we are seeing,” the Rev. Kimberly Murman, president, said last month. “We are an organization that is well dispersed across the country with over 5,000 members. Nowhere do we know of the type of wholesale contraction described by Eastern Maine Medical Center.”
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