Commentary, Trump Administration

Skimpy health insurance plans & pre-existing conditions are back under new Trump rule

Today the Trump administration issued a final rule allowing insurers to sell “short-term, limited-duration” health insurance policies that can last up to three years instead of the maximum allowable three months under current rules.

In the  rule, administration officials contort their words to explain what otherwise looks like an alternative fact:

“This final rule recognizes the role that short-term, limited-duration insurance can fulfill, while at the same time distinguishing it from individual health insurance coverage by interpreting ‘short-term’ to mean an initial contract term of less than 12 months and implementing the ‘limited-duration’ requirement by precluding renewals or extensions that extend a policy beyond a total of 36 months.”

But behind these somewhat comical linguistic gymnastics lie some very real dangers for patients, especially those with chronic health conditions. Short-term, limited-duration health plans are not considered “health insurance” under federal law, and as a result, they do not have to comply with the Affordable Care Act. In fact, these plans look a lot like the often all-but-useless private health plans that littered the individual market before the ACA reined in predatory and discriminatory insurance industry practices.

These plans can vary premiums based on age, gender, health status, and medical history. They can also deny coverage outright based on pre-existing conditions, refuse to cover any treatment for a pre-existing condition, or find ways to rescind your policy after you’ve incurred a claim.

The other ways they keep their premiums down is by offering bare-bones coverage in the first place. They usually exclude coverage for critical health services that consumers have come to expect their policies to cover. A recent study looked at short-term health plans sold in the Charlotte region and found that most of them didn’t cover benefits for prescription drugs, mental health services, or substance use disorder treatment. Not a single short-term health plan studied covered maternity care whatsoever.

A return to the pre-ACA days of health insurance is a return to the days of lifetime and annual limits on coverage. UnitedHealthcare’s Golden Rule Company, which offers short-term plans in North Carolina, imposes a per-person lifetime limit on covered benefits of $250,000 for many of its three-month plans. Asa result, any enrollee who develops a terminal or chronic condition or who has a premature child is left unprotected from catastrophic costs.

In a press release, U.S. Health and Human Services Secretary Alex Azar says, “These plans aren’t for everyone, but they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.” Even if that were true, allowing these policies to last for up to three years at a time creates an alternate market to the ACA in which insurers will market heavily to young and healthy enrollees, dupe them into buying bare-bones coverage with lower premiums, and ultimately make premiums for full-benefits, comprehensive coverage more expensive for the older and sicker enrollees who remain in ACA-compliant market. This isn’t about providing options—it’s about undermining the Affordable Care Act.

Commentary, Trump Administration

Blue Cross’ 2019 premiums would be 18 percent lower if not for ACA sabotage

For the first time in 25 years, Blue Cross Blue Shield of North Carolina is seeking to lower its premiums for individual health insurance coverage. Yesterday the company announced that it filed a request with state regulators for an average rate reduction of 4.1 percent across all health insurance plans that it will offer on the individual market in 2019.

While this is surely good news—especially for the small fraction of North Carolina enrollees who pay full price because they do not qualify for premium subsidies—it could have been much better news. Instead of seeking a 4.1 percent decrease, the company could have reduced rates by 22.1 percent if it weren’t for the political attacks on health care that have taken place in the past year.

After Congress failed to repeal the Affordable Care Act (ACA) in the summer of 2017, the Trump administration abruptly cut off payments that reimburse insurers for providing Cost-Sharing Reduction subsidies to enrollees with low incomes, causing Blue Cross to raise its 2018 rates on North Carolinians by 14.1 percent to make up for the losses. In today’s announcement, Blue Cross notes that if those payments were still in place, “requested rates would be another 14 percent lower” in 2019. Premiums would have been an additional four percent lower if Congress hadn’t eliminated the individual mandate penalty as part of its massive tax break handout to corporate American and the wealthy in December.

While ACA sabotage has been Trump’s major health care policy approach, opponents of the ACA have long deliberately undermined the law and hurt the millions who benefit from it since before the days of Trump. In the early years of implementation, Congress defunded a program designed to stabilize the markets, leading to premium spikes and an exodus by insurers from the exchanges.

The North Carolina General Assembly has also embodied this “politics over people” health policy agenda, as they have rejected Medicaid expansion since 2013, leaving billions of federal dollars on the table that would help the state cover over 600,000 North Carolinians. Not only does that leave hundreds of thousands of our neighbors uninsured, but it also costs more for people who are insured with private coverage. In states that expanded Medicaid, private insurance premiums are lower by seven percent on average. This ongoing act of health care sabotage hurts all of us.

So, yes, Blue Cross’ rate reduction is good news, but that 4.1 percent decrease could have been a 22.1 percent decrease. Imagine how much more progress we could make if our state and federal lawmakers committed to improving health care for people instead of playing into politics.

Commentary, public health, Trump Administration

Another act of health care sabotage over the weekend from the Trump administration

Donald Trump speaking

President Donald Trump

On Saturday, the Trump administration announced it would temporarily suspend a program that helps health insurers in the individual market cover the costs of high-risk enrollees, injecting uncertainty into the health insurance markets that could lead to higher premiums and fewer insurers offering coverage.

Sound familiar? It should, as it’s just the latest of many Trump administration efforts to sabotage the Affordable Care Act (ACA), including a similar effort from last October when the Trump administration abruptly cut off reimbursement payments to health insurers for subsidies they provide to consumers with low incomes. That action caused North Carolinians to pay a premium hike of 14.1 percent for Blue Cross Blue Shield of NC plans this year.

The insurance industry is already sounding the alarm about this decision. America’s Health Insurance Plans (AHIP) released a statement shortly after the announcement highlighting the sabotage effect:

We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments. This decision comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates. This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own. It will create more market uncertainty and increase premiums for many health plans – putting a heavier burden on small businesses and consumers, and reducing coverage options. And costs for taxpayers will rise as the federal government spends more on premium subsidies.

After all, suspending the Risk Adjustment program means insurers who cover sicker enrollees are missing out on billions of dollars they are owed under the law, and if the fund transfers aren’t restored, it’s likely consumers who will pay the price.

Risk adjustment programs—which enjoy bipartisan support in programs like Medicare Part D and Medicare Advantage—exist in order to maintain a functioning health insurance market in which insurers cannot discriminate against people with pre-existing conditions. The ACA’s Risk Adjustment program requires insurance companies that enroll relatively healthier populations to transfer funds to companies who enrolled older, sicker, and higher-risk enrollees, creating a disincentive for insurers to game the system (to the extent they can under the ACA) in an effort to avoid covering high risk patients.

The administration cites a months-old U.S. District Court decision for its announcement, but legal analysts have already poked holes in the government’s case. University of Michigan law professor Nicholas Bagley writes:

CMS says that the ruling “prevents [the agency] from making further collections or payments under the risk adjustment program, including amounts for the 2017 benefit year, until the litigation is resolved.” That’s wrong. The truth is that the Trump administration has lots of options. It’s just choosing not to exercise them.

Like in other issue arenas, the Trump administration has manufactured a crisis that will harm North Carolinians, and in a continued demonstration of bad faith, it’s refusing to govern effectively.

Commentary

Latest state legislative Medicaid proposal may be too harsh to get approved by Trump administration

The public just learned that lawmakers are rushing to consider adding new rules to North Carolina Medicaid that would make people uninsured if they cannot prove they’re working a minimum number of hours each month. This proposal to add red tape and bureaucracy is bad policy, plain and simple. But there are other reasons that even conservative lawmakers should reject it.

First and foremost, signals coming from the Centers for Medicare & Medicaid Services (CMS)—which would have to approve the proposal—suggest that they are not ready to greenlight so-called “work requirements” in states like North Carolina that have not expanded Medicaid. In practical terms, this could lead to longer delays in decision-making by the federal government.

While expansion states like Kentucky, Arkansas, and Indiana have been authorized to implement  these requirements—which are still bad policy—CMS Administrator Seema Verma has expressed skepticism about what happens if they approve similar requirements in non-expansion states:

Because there is no tax credit for them to move on to the exchanges, what happens to those individuals?  We need to figure out a pathway, a bridge to self-sufficiency.

CMS Administrator Seema Verma

After all, Medicaid eligibility in our state is so restrictive that a single parent household with one child has to make less than $6,828 annually to qualify. Since the state hasn’t expanded Medicaid, these new requirements may make it impossible to keep your health coverage: if you can’t prove you’re working, you lose eligibility, but if you do work—even a part-time minimum-wage job (which, by the way, won’t offer health insurance)—you’ll make too much to qualify for Medicaid and too little to qualify for subsidies under the Affordable Care Act.

Adding these new administrative complexities behind closed doors during budget talks will not leave adequate time to understand their implications. For conservative lawmakers who have invested so much time and energy into moving our Medicaid program from fee-for-service to a managed care system, it’s likely that adding these new requirements—which will cost millions of taxpayer dollars to administer—will add even further complexity to our managed care transition.

Whether it’s due to being denied approval or put on hold by the Trump administration, or due to all the new systems that will have to be designed to determine eligibility, implement and enforce the requirements, create systems for enrollees to report their hours and occupations, and so on, it’s very likely that this will delay our Medicaid system change even further.

Commentary, Trump Administration

Comments due Monday on Trump’s scheme to bring back health plan bars to pre-existing conditions

While last year’s legislative repeal-and-replace proposals were rejected resoundingly by the American public and by a slim majority in the Senate, the Trump administration has been moving on its own to implement changes to the current health care landscape. The latest proposal from the administration would enable insurers to sell “short-term” health insurance policies that last up to 364 days—hardly a short term under any reasonable interpretation when traditional health insurance policies last 365 days. While these plans are currently on the market, they can last no more than three months under rules put in place by the Obama administration.

The Trump administration touts these plans as a solution to the country’s high health care costs. But these plans have cheap premiums because they can cherry pick whom they will cover. Upon closer examination, these plans look an awful lot like those that left millions uninsured and drowned others in medical debt before the passage of the Affordable Care Act. Here are some excerpts from a policy currently sold here in North Carolina by Golden Rule Insurance Company, which is a UnitedHealthcare company:

Preexisting conditions, and complications resulting from a preexisting condition, will not be covered under the policy.

Preexisting condition means those conditions for which medical advice, diagnosis, care or treatment was received or recommended, or a condition that had manifested itself, within the one-year period immediately preceding the effective date of a person’s coverage; or a pregnancy existing on the effective date of coverage.

Another reason that premiums are low for these plans is that you get what you pay for. These policies cover so few benefits and pay out so little in claims that insurance companies selling them actually reap much greater profits than on traditional plans. Short term plans routinely exclude benefits not just for coverage of pre-existing conditions, but also for essential services like prescription drugs, mental health and substance use disorder treatment, pregnancy care, and preventive care, among a host of others.

Even for the few services that are covered, enrollees will be stuck with large out-of-pocket bills. Some Golden Rule policies on the market have deductibles of up to $12,500 for a policy that lasts only three months, and some of these policies also impose dollar limits on what they’ll pay out in benefits over an enrollee’s lifetime or policy period. One Golden Rule policy in NC includes a $250,000 lifetime limit.

And that’s the trend: insurers make bank off of these policies while enrollees attracted by the low premium find themselves without adequate coverage and face-to-face with crushing medical debt once they need care.

These plans are dangerous to those who enroll in them. But they also undermine the ACA and those who benefit from comprehensive coverage there. Through their discriminatory premiums and benefit designs, short-term plans are designed to pull young and healthy folks out of the ACA coverage market, leaving the remaining risk pool older, sicker, and more expensive. This puts comprehensive coverage out of reach, especially for North Carolinians who make too much to qualify for premium subsidies under the law.

Unlike last year when the GOP-controlled Congress failed to revive these discriminatory plans through legislation, the Trump administration is proposing to do this through administrative rulemaking, meaning that members of the public can weigh in by submitting comments until the deadline on Monday, April 23. Click here to submit your own comment.