The Trump administration is moving forward with new rules to restructure the federal health exchanges, giving states more freedom to relax the regulations on what insurers must cover, which critics say will increase premiums and undermine patient protections.
Under the 522-page new rule (PDF) released on Tuesday, states will be able to choose from 50 essential benefit benchmark plans, instead of 10, beginning in 2020. Additionally, states will be able to pick and choose which benefits are included in their essential health benefit benchmark plan by drawing from plans used in other states.
The Centers for Medicare & Medicaid Services (CMS) also eliminated a requirement that each plan offered on the exchange have noticeable differences from one another, such as covered benefits or cost-sharing. Eliminating the requirement would "encourage plan design innovation," CMS said.
The agency expanded coverage exemptions starting immediately, including for individuals whose only healthcare option is a plan that includes abortion services. Those that file for exemptions will have to submit in writing that they are morally averse to abortion, which can be prosecuted under perjury.
The rule also increased the out-of-pocket maximum to $7,900 for individual coverage and $15,800 for family coverage, a 7% increase, the highest since 2014. CMS also increased the threshold for reviewing rate increases from 10% to 15%.
Additionally, CMS will allow transitional plans that don't follow ACA rules to remain in the individual and small group markets for another year. This, combined with recently announced expanded short-term plans will allow states and insurers more flexability to get around ACA requirements.
The final rule is the latest attempt from the Trump administration to pick away at the 2010 law despite being legally obligated to move forward with the requirements. It follows a recent report that the White House plans to end the federal exchanges by 2020.
In a press call, CMS Administrator Seema Verma called on Congress to fully repeal the ACA, adding that the finalized rule gives state's greater flexibility and reduces hardships.
"This rule gives states new tools to stabilize their health insurance markets and empower citizens to find coverage that fits their families’ needs and budgets," she said in an accompanying statement.
The 2019 Payment Notice Rule will provide States greater flexibility & control over their insurance mkts to better address local conditions moving forward. https://t.co/I8XMJSzwjL— Administrator Seema Verma (@SeemaCMS) April 9, 2018
Reaction to the rule, however, was quick and harsh.
The flexibility may be beneficial to insurers but could lead to less generous benefits and worse access for consumers, Avalere, a healthcare consulting firm, said in a statement to FierceHealthcare.
Andy Slavitt, former acting administrator at the CMS under the Obama administration and board chair of U.S. of Care, said the rule is an attempt to take healthcare back to the pre-ACA era.
2) Insurers are making a lot of money in the exchanges. A lot. Which means they don’t need these incentives and loosening of the rules. They need the opposite. We should be commoditizing and forcing shopping not the opposite. Silly. 9/— Andy Slavitt (@ASlavitt) April 10, 2018
"It’s an effort to create a very different vision that looks like 2007," he said in a tweet. "Insurers will now be able to raise rates by up to 15% without justification [and the rule] lowers requirements that premiums be spent on claims or given back."