ACA Directive Expands Sale of Less-Expensive Plans/Fewer Benefits – Will Ease Insurance Rules
The administration plans to sign an executive order Thursday (10-12-17) to initiate the unwinding of the ACA and may advance sweeping changes to health-insurance regulations by instructing agencies to allow the sale of less-comprehensive health plans to expand.
Federal agencies will be directed to take actions to provide lower-cost options and foster competition in the individual insurance markets, according to a WSJ interview with senior White House officials. The specific steps included in the order will represent only the first moves in effort to strike parts of the law.
By boosting alternative insurance arrangements that would be exempt from some key ACA rules, the change would provide more options for consumers. Health-insurance experts say it could also raise costs for sicker people by drawing healthier, younger consumers to these alternative plans.
The Executive Order Will:
– Expand access to plans that let small businesses and possibly individuals to band together to buy insurance.
– Lift limits on the sale of short-term insurance, which provides limited coverage and often appeals to healthier people.
– 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 simplest changes in the executive order to take effect, and the order leaves key details for the Labor Department to determine after a formal rule-making process, including the solicitation of public comment.
Taken together, the instructions will be 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. The administration argues 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 opens potential future action, such as stopping enforcement of ACA requirements that most Americans obtain insurance and whether to keep making payments that let insurers subsidize lower-income consumers.
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.
Action Marks Biggest Change to Health Care This Year
Supporters say these new 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 followingthe new order would free them from many of those rules.
The executive order calls for expanded access to short-term health plans whose availability was curtailed previously. These plans have more flexibility than others allowed under the ACA, such as an ability to refuse coverage to people with pre-existing conditions.
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.
The order will direct agencies to rescind current regulation 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.