Memo to Congress: Stabilize ACA Marketplaces

Memo to Congress: Stabilize ACA Marketplaces

Last week, the Trump administration sent a memo to congressional leaders, outlining three health policy changes that they would like to see implemented as part of the budget deal that needs to be approved by March 24th.   

What’s in the Memo? 

The one-page document outlines three core policy changes:  

  1. Allow issuers to renew short-term health plans without having to underwrite each plan 
  2.  Expand access to Health Savings Accounts (HSAs) 
  3.  Modify age-rating requirements to permit premium variation of up to 5:1 in the individual and small group markets 

The most notable of the three policies is to allow health plans to raise prices on older members. Currently, ACA plans are allowed to take age into account when determining prices for customers, but there cannot be more than a 3:1 price difference based on age. The Trump proposal would raise the maximum ratio to 5:1. 

What are Lawmakers saying?  

Republicans are divided over whether they should try to help out the ACA marketplace, which all of them have in the past sought to entirely dismantle. Some worry that without a stabilization effort, Republicans will be blamed for big premium increases right before the midterm elections. Members of the party’s right flank, however, are staunchly against anything that will “bail out” Obamacare. 

While Democrats say they are eager to restore the subsidies that the president scrapped, they are also voicing suspicions that Republicans are using the stabilization effort as cover to further undermine the ACA with conservative policy changes. They are also unlikely to support increasing the amount insurers can charge older customers. 

Sen. Patty Murray (D-Wash.) took to Twitter to denounce the proposed policy changes stating, “President Trump’s plan to sabotage bipartisan negotiations is just his latest effort to sabotage families’ health care in ways that are particularly damaging for women.”  

Democrats and some Republicans have said they want the funding measure, which must be approved to avoid a government shutdown, to include money aimed at stabilizing the ACA marketplace. 

The ACA marketplace has been rattled by a number of efforts by Trump and Congressional Republicans to chip away at the health law, notably the repeal of the individual mandate that was included in the December tax legislation and Trump’s move in the fall to stop the payment of cost-sharing subsidies to ACA insurers. 

What Happens Next? 

Lawmakers have to pass a spending bill by midnight March 23 or the government will run out of money and shut down — again. Whether or not the bill will include provisions to help support the ACA remains to be seen. Healthcare industry stakeholders will need to keep a close eye on Capitol Hill over the next few weeks as the budget battle unfolds. 

Sources: 

  1. https://www.wsj.com/articles/trump-administration-pushes-conservative-goals-in-health-care-market-changes-1520377333 
  2. https://www.benefitspro.com/2018/03/07/aca-stabilization-in-exchange-for-higher-premiums/?slreturn=20180212103708 
  3. https://www.bna.com/spending-bill-may-n57982089655/ 
  4. https://www.politico.com/story/2018/03/06/obamacare-democrats-white-house-insurance-stable-388816 
  5. https://www.vox.com/policy-and-politics/2018/3/12/17100660/congress-government-shutdown-spending 

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