Trump Administration Finalizes Rule that Will Raise Consumer Costs, Discourage Enrollment and Weaken Marketplaces

The Trump Administration released a final rule for the individual health insurance market that will raise consumers' deductibles and other out-of-pocket costs, reduce premium tax credits that help millions of people buy insurance and make it harder for people to enroll in coverage.

While the Administration claims the changes are needed to stabilize the insurance market, many of them would reduce market stability by shrinking enrollment and making the pool of people with coverage sicker, on average. What's more, the changes do nothing to address the latest threats roiling insurance markets: new comments from President Trump that he may withhold cost-sharing reduction payments and ongoing efforts by Republicans to repeal the Affordable Care Act (ACA).

The final rule, which is set to take effect in roughly two months, will:

• Raise premiums, out-of-pocket costs, or both, for millions of people. The rule allows insurers to raise cost-sharing charges, including deductibles, in their plans while still meeting the standards used to define the different coverage levels for marketplace plans (bronze, silver, gold, and platinum). The result: higher deductibles and other out-of-pocket costs for many people. These changes also would shrink premium tax credits for moderate-income people, forcing millions of families to choose between higher premiums and worse coverage.
• Cut the time for open enrollment for 2018 coverage in half. The rule slashes the time people have to sign up for 2018 plans, ending it on December 15, 2017, instead of January 31, 2018. This is likely to cause more people to miss the deadline — especially younger people, who tend to sign up later.
• Delay coverage and limit plan choices for people using a special enrollment period (SEP). SEPs allow people to enroll in or change marketplace plans outside of open enrollment if they experience a major life change, such as losing job-based health coverage or having a baby. The new rule places new restrictions on SEPs. For example, hundreds of thousands of SEP enrollees are now expected to have their coverage delayed while they provide documentation of their eligibility or otherwise have it verified. (The current process allows coverage to begin while verification is taking place.) The additional hassle will most likely deter younger and healthier consumers from completing enrollment. In addition, many marketplace enrollees will no longer be allowed to change to a different coverage level when they experience a SEP-triggering life change during the year.
• Allow insurers to block consumers’ enrollment until they pay their past premium debt. The rule would allow an insurer to avoid or delay enrolling a person whose coverage was terminated in the past year unless they pay all of what they owe that insurer, rather than making sure the person has coverage while the insurer collects the money owed. To enroll in coverage, a person might have to come up with a large sum of money — a tall order for consumers with limited incomes — or be shut out of coverage until the following year’s enrollment period. And healthy people would be likelier than sick ones to forgo enrolling due to the new rule, which would weaken the overall health of the coverage pool.

The likely problems with the final rule are well known – the Centers for Medicare & Medicaid Services acknowledges the agency received large numbers of comments raising concerns about how its proposals would impact consumers and insurance-market stability. But the Administration still chose to finalize its proposals almost exactly as proposed.