Trump Insurance rules

Politico evidently got their hands on a leaked draft rule making document for the insurance exchanges. There are a couple of significant tweaks in the rules. The most important thing so far is that the draft document accepts the ACA as it is and works on the margins. It is not an attempt to blow things up. But let’s look at the details:

The administration is also looking to slash the 2018 enrollment period in half. It would run from Nov. 1 to Dec. 15, rather than through the end of January 2018 as the Obama administration had proposed.

The logic of this rule is that a December 15th end date means every policy starts on January 1st. This will do two things. First it will give more member months total in the pool as the current open enrollment period has both February 1 and March 1 start dates. Secondly and more subtly, it will shift the enrollment of the healthiest cohort on average from a March 1 start date to a January 1 start date. The length of healthy member stay will be longer.

This is not a bad idea. It would be similar to what happens in Medicare. I would tweak it slightly. I would try to line up the ACA open enrollment period with the Medicare open enrollment period so that we develop a national window where everyone worries about next year’s healthcare at the same time.

HHS is also considering tough new rules around special enrollment periods, which insurers complain have allowed some Obamacare customers to wait until they get sick before signing up for coverage. All individuals who sign up outside the standard enrollment window will be required to provide documentation proving they’re eligible before coverage takes effect.

The logic of this change is that there are some people who have attempted to go off-Exchange to get a policy during a Special Enrollment Period and were denied because they could not document the qualifying event. They then went on-Exchange and attested to their qualifying event and got covered. Insurers in Covered California believe that the higher cost SEP enrollment added two to three points of cost to their base policies. Some of that makes sense as it is a narrowly self-selecting pool of very motivated buyers. It is much like COBRA in that regard. But this is an anti-gaming rule.

The aim of the rule is to drive more healthy people into the pool during open enrollment and make the cost of going uncovered higher. It will lead to fewer people getting enrolled during a SEP.

These two rules could probably go into place without significant opposition. The other proposals below the fold will face significant public, political and legal opposition.

The Trump administration is also proposing more flexibility on out-of-pocket costs. In a “silver” plan, for example, insurers must cover between 68 percent and 72 percent of medical expenses. HHS is proposing to expand that range by another 2 percentage points. So for that same silver plan, insurers could cover as little as 66 percent of medical costs.

Using the 2017 Actuarial Value calculator, a Silver plan with only deductible cost-sharing (no co-pays, no co-insurance) can have anywhere from a $3,600 (72%) to $4,400 (68%) deductible. All else being equal the $4,400 deductible will have the lower premium. Using the same calculator the deductible ranges from $3,175 (74%) to $4,850 (66%). Standard silver will overlap with low tier Silver Cost Sharing Reduction Subsidies. Standard Platinum will overlap with both medium and high CSR. This is a confusing mess.

A 56% Bronze can not be built given current out of pocket maximum constraints.

The draft documents show the Trump administration may loosen an Obamacare provision barring insurers from charging older customers more than three times as much as their younger enrollees. It may allow health plans to expand this ratio to 3.49:1, which would let insurers boost prices for older customers, who tend to be more expensive to cover.

Three is three. Pi is 3.14 not 3.2. I have a hard time seeing a court buy this argument that 3.49:1 is really 3:1 or at least within administrative discretion of 3:1. An older individual who is offered insurance at a 3.49:1 ratio will have immediate standing to sue and I would imagine could probably succeed. Insurers want certainty. A pricing model based on 3:1 is a different pricing and marketing strategy when it is based on 3.49:1. I don’t see this going anywhere.

I was most disappointed at the Health Wonk Community for the lack of embedding the following clip:






29 replies
  1. 1
    rikyrah says:

    thanks for the information Mayhew.

  2. 2
    Ohio Mom says:

    Well, I like the not blow things up part.

  3. 3
    stinger says:

    Thank you — your posts are truly invaluable.

  4. 4
    Blue Galangal says:

    The real question is, how soon until conservative heads explode as soon as the “NO CHANGES JUST TWEAKING” message sinks in?

  5. 5

    @Blue Galangal: Given their penchant for doublethink I’ll go with ‘never’.

  6. 6
    Anonymous At Work says:

    Were I an irate judge, I’d schedule the hearings and use the Trump “rounding” to tell the government lawyers when it was. Like, Tuesday at 1 pm really rounds to Wednesday 8 am.

  7. 7
    Clem says:

    Found your post in #medicare, thanks for posting. Especially the Monte 3 count video. Btw, there is no fold coming in from a link. Seams like the lead would be Medicare price ratio, or whatever it’s technical name is, because old folks on fixed income are touchy about cost increases. It’s a very technical post except for the price ratio and the video.

  8. 8
    Danton says:

    Any thoughts on who or what group of people prepared the draft?

  9. 9
    Clem says:

    The Hill is reporting the AARP will sue the admin
    http://thehill.com/policy/heal.....are-change

  10. 10
    Sab says:

    Thanks for your posts. I am a married woman barely under the age for Medicare, with several stepchildren who have had preexisting conditions since prehighschool. This stuff is very personal to me. Thanks for your coverage that helps me explain it to my idiot coworkers.

  11. 11
    gex says:

    @Blue Galangal: I wonder if that might be muted. I don’t think this is a response to the left’s complaints about their ACA plan. This is in response to their base’s outcry, post election. I’ve been seeing so many stories about the GOP being afraid because they will own this and because of all the outcry from the right.

    It makes me wonder what things might be like if the right regularly pushed their politicians for good, albeit right wing, governance instead of simply supporting whatever pisses liberals off the most.

  12. 12
    Raoul says:

    The 3.49 rounds down to 3 thing is absurd. Something a high school kid might think up and find devilishly clever. One would hope that judges would rip that bit to pieces. Seems like all you’d have to do is get two older adult policies, one priced at $600 and one priced at $698 vs a young person’s $200 and ask the Admin, does $698 ’round down’ to $600 in this case?’

    I guess I’m OK with the Oct 1 – Dec 15 open enrollment, though that combined with tightened SEP requirements could leave some people out in the cold. I think a key question is whether the admin is also planning to try to defund advertising and promotion of the (short, very critical) open enrollment period like they did right after sleazing their way into office.

  13. 13
    ThresherK says:

    Your work here is one reason I don’t hardly bother with NPR policy articles any longer; they seem to want to cover everything in a coating of tapioca (except tapioca has its uses). Keep up the great work.

  14. 14
    Ohio Mom says:

    @Clem: Welcome. David’s health coverage posts on this blog are for a general audience so some details are bound to be left out — and some off-topic humor is ocassionally included.

    On the desktop view, you will see “Mathew on Insurance” just before the comments start. That link will get you to David/Dick’s full oeuvre on health insurance issues.

  15. 15
    randy khan says:

    Narrowing the window is intended to cut down on the number of people applying and/or changing policies. I get the other reasons, but that’s probably the actual point.

    And, really, 3.49? Pretty stupid.

  16. 16
    clay says:

    @Blue Galangal:

    The real question is, how soon until conservative heads explode as soon as the “NO CHANGES JUST TWEAKING” message sinks in?

    The irony is, the Repubs could keep 99% of Obamacare, make small positive tweaks on 1% of it, and then claim that their “repeal and replace” was a YUUUGE success.

    As irritating as this would be, I’d be willing to accept it if it meant that people were able to keep their insurance. (Obama undoubtedly feels the same way.)

  17. 17
    Yarrow says:

    @Blue Galangal: They won’t care. They actually love the provisions of the ACA. It’s “Obamacare” they don’t like. Make a tiny change on the margins, rebrand as New and Improve “Trumpcare” and it’ll be a win.

    It may allow health plans to expand this ratio to 3.49:1, which would let insurers boost prices for older customers, who tend to be more expensive to cover.

    I don’t see how this is a win for Republicans. Don’t older people vote for Republicans? I know a lot of their voters are Medicare age, but some are still not at that age. Unless they’ve got health insurance through work, this will hurt them.

  18. 18
    The Moar You Know says:

    An older individual who is offered insurance at a 3.49:1 ratio will have immediate standing to sue and I would imagine could probably succeed.

    AARP has announced they will sue the administration if this is put into effect.

  19. 19
    Belafon says:

    They should have included a section renaming Obamacare the Patient Protection and Affordable Care Act.

  20. 20

    @Clem: Yeah, this stuff is pretty technical and I am writing for both a general audience and a technical audience. I am not seeing anything that directly touches Medicare as the ACA Exchange policies only apply to people who can not get on Medicare. The age banding is important for the people who are not quite to Medicare age.

  21. 21
    Villago Delenda Est says:

    @Belafon: And a provision defunding ACORN as well.

  22. 22
    MomSense says:

    If they decrease the amount of time for open enrollment, will they increase healthcare.gov staffing so that the wait times don’t increase? I can imagine a lot of people unable to get through because of increased volume due to the shorter enrollment period.

  23. 23
    FlipYrWhig says:

    @Yarrow:

    They actually love the provisions of the ACA. It’s “Obamacare” they don’t like. Make a tiny change on the margins, rebrand as New and Improve “Trumpcare” and it’ll be a win.

    Just tell people that they’ve found a clever way to fix it so illegal immigrants and refugees can’t get Obamacare benefits. Then stand back and bask in the resulting orgiastic celebration.

  24. 24
    Buskertype says:

    Really appreciate these posts, thanks!

  25. 25
    nanute says:

    If the proposed changes make insurance more expensive, (higher out of pocket cost, etc.) it will be the exact opposite of what most critics complained was the problem in the first place.

  26. 26
    jon says:

    @Yarrow: The Republican problem is that to make a responsible change in these ratios, even one that can be justified with actuarial tables and basic math, they’d have to stand up for such things and propose a reasonable tweak to a system they want to both vilify (even as the shelf-life of need to do so is passing quickly) and keep (because throwing millions of people off insurance is kinda sorta extremely unpopularish.) Selling that change is even more difficult, because it puts them in the trap of having to explain to people who think Government is Magic! that stuff costs money.

    So even if this change could strengthen the overall market by bringing in more younger and healthier people to the pools of money that largely have to be spent on actual care according to the ACA rules, the effect of this minor tweak, even if it does get through the courts intact, would almost certainly just be a bit of a bump in price to older, generally wealthier, Americans who can’t get as many subsidy dollars as younger, generally poorer, ones do. The insurance companies could somehow only lower prices for that younger and that middle bunch, but would it really make a difference? I’m not certain, but the number crunchers are going to be playing it conservatively at this point in the exchanges, having some base numbers to go by. So not only would it be an insufficient patch since it wouldn’t matter enough to get more younger people on board, it would be paired with many GOP attempts to make the mandate weaker (or completely gone.)

    Points for trying, but a failure all around.

  27. 27
    varmintito says:

    I think the rounding proposal sounds promising. All doses of medication will now rounded to the nearest 100 mg. Any procedures reimbursed at 100% will now receive 51% payment, since rounding.

  28. 28

    […] It might not sound like such a big deal. But, as David Anderson, an analyst at Duke University’s Margolis Center for Health Policy, has pointed out, that means an insurer could boost the deductible on a typical 2018 silver plan by a few hundred dollars. (Anderson has posted some more precise calculations, and the assumptions behind them, on the blog Balloon Juice.) […]

  29. 29

    […] It might not sound like such a big deal. But, as David Anderson, an analyst at Duke University’s Margolis Center for Health Policy, has pointed out, that means an insurer could boost the deductible on a typical 2018 silver plan by a few hundred dollars. (Anderson has posted some more precise calculations, and the assumptions behind them, on the blog Balloon Juice.) […]

Trackbacks & Pingbacks

  1. […] It might not sound like such a big deal. But, as David Anderson, an analyst at Duke University’s Margolis Center for Health Policy, has pointed out, that means an insurer could boost the deductible on a typical 2018 silver plan by a few hundred dollars. (Anderson has posted some more precise calculations, and the assumptions behind them, on the blog Balloon Juice.) […]

  2. […] It might not sound like such a big deal. But, as David Anderson, an analyst at Duke University’s Margolis Center for Health Policy, has pointed out, that means an insurer could boost the deductible on a typical 2018 silver plan by a few hundred dollars. (Anderson has posted some more precise calculations, and the assumptions behind them, on the blog Balloon Juice.) […]

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