Under pressure from payers, Obama offers Affordable Care Act fixes

Obama

In the final months of his presidency, Barack Obama is proposing policy changes to his signature healthcare reform law in an effort to fix some of its most pressing problems and stem the tide of insurer exits from the marketplace exchanges.

The administration’s proposal demonstrate a commitment to making exchanges a desirable place to do business and further removes “potential obstacles to issuers growing their business and entering more markets,” CMS Acting Administrator Andy Slavitt said in a blog post.

Related: New Obama proposals aim to ease ACA's financial burden on health insurance companies

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On Monday, the Obama administration released a 300-page policy brief (.pdf) that appears to be a direct response to critiques from health insurers, politicians, the media and the public in general.

It aims to better balance the risk pool, increase enrollment and cut red tape--making it easier and more profitable for insurers to participate in exchange markets.

Aetna, Oscar Insurance Corp., UnitedHealth and Scott & White have all said they will significantly reduce or eliminate their ACA exchange offerings in 2017.

“The individual market isn’t working as intended and there are weaknesses in the way its been set up,” Oscar CEO Mario Schlosser said last week.

Rebalancing the risk pool remains a high priority for the administration and insurers. The proposed rule would rebalance the risk pool via a few mechanisms, Obamacare CEO Kevin Counihan said in a blog post. It would:

  • Strengthen proof of eligibility for Special Enrollment Period enrollees.

  • Encourage consumers turning 65 to shift from ACA products to Medicare products, thus reducing the risk profile of a demographic with higher-than-average utilization rates.

  • Stoke the efforts of a recent task force dedicated to ousting healthcare providers who direct patients toward ACA plans instead of Medicare and Medicaid in order to receive greater reimbursements.

  • Create space for insurers to creatively design their insurance products, particularly for ‘benchmark’ federally-subsidized health plans.

  • Restructure the way medical loss ratios are calculated.

  • Axe the current rule which bans insurers from entering exchange marketplaces for up to five years if they exit a marketplace.

  • Ascertain whether user fees should be allocated toward outreach efforts.

  • Open new channels for users to enroll in a transparent user experience with new technologies CMS is working to deploy.

Still, some are already saying the proposal is inadequate.

"Health and Human Services, along with the Centers for Medicare & Medicaid will be the governmental arms moving to implement the Administration's proposed changes. From a legal and practical perspective, the changes are all likely too little, too late," healthcare expert Bryan Rotella of Rotella Legal Group told FierceHealthPayer

"The Obamacare 'product' has a highly negative stigma with the consumers it needs most: young, healthy Americans currently ​without insurance ​or those ​under their parent's or an employer's plan. Throwing more tax dollars or fidgeting with timing of enrollment doesn't cure the law's underlying illness that it is dependent on the healthy to compensate for the sick."

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