Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • 40 Under 40
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - AI and Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
February 10, 2017 11:00 PM

HHS reaches into sparse toolbox for ACA exchange fixes

Harris Meyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    "The administration is listening and our message is getting through." Daniel Hilferty CEO Independence Blue Cross

    A leaked draft rule from HHS intended to help stabilize the individual insurance market highlights the narrow limits of what President Donald Trump's administration can do without action by a deeply polarized Congress.

    HHS submitted a proposed rule to the Office of Management and Budget, but no details of the rule have been disclosed by either agency. Politico, however, obtained two different draft versions. The provisions are consistent with some of the changes sought by insurers to get a balance of healthy and sick people in the risk pool, bring down costs and premiums, and make the individual market a more profitable business.

    Those elements “are hopeful for us,” said Daniel Hilferty, CEO of Independence Blue Cross, board chairman of the Blue Cross and Blue Shield Association, and a member of the executive committee of America's Health Insurance Plans. He added that the reported rule, which he has not seen, suggests that “the administration is listening and our message is getting through.”

    But the changes would not address what insurance industry leaders say are their most important needs if they are going to remain in the individual market in 2018. Those include congressional funding for the Affordable Care Act's cost-sharing reductions, preservation of generous premium subsidies to keep coverage affordable, and restoration of risk payments to protect insurers that sign up disproportionately sick members.

    “The small nature of these changes shows that real reform has to come through legislation, because none of this will fundamentally change the market,” said Craig Garthwaite, a health insurance expert at Northwestern University. “And it's not even legally clear they can do this.”

    Time is another challenge for the Trump administration. Even if HHS issued a notice of rulemaking tomorrow, soliciting and considering public comment, and drafting and publishing a final rule could take at least two to three months. But insurers have to file their 2018 plan offerings and rates for 2018 by April and May, and they need to know the insurance market rules before they make their final decisions.

    “It will be tight,” Hilferty said. “We'll already be modeling what we think the rule changes will be, based on the components that could be included in the rule.”

    Meanwhile, consumer advocates say the proposed changes would make insurance less affordable and less accessible for older and sicker people and those who face unexpected life changes, financial problems or illnesses.

    According to the leaked drafts, HHS wants to let insurers charge older enrollees premiums 3.49 times as much as they charge younger enrollees, up from the ACA's maximum permitted age-rating band of 3-to-1. In addition, the agency would cut the length of open enrollment from three months to six weeks, extending from Nov. 1 to Dec. 15.

    People needing coverage outside of open enrollment would have to provide documentation of the qualifying life change such as divorce or a lost job before coverage would become effective.

    Insurers also could cut off coverage after 30 days if enrollees failed to make a premium payment, rather than giving them the current 90-day grace period.

    The most controversial provision is widening premium differences between younger and older people. Insurers argue they need more flexibility to set lower premiums for younger, healthier people to lure them into the insurance market and offset the cost of older, sicker people. Insurers would prefer at least a 5-to-1 age-rating band.

    Asked how much difference a 3.49-to-1 rate band would make in reducing rates for younger people, Hilferty said “any little bit helps.”

    But it's not clear the administration can legally use rulemaking to change the age-rating band, which Congress explicitly set at “no more than 3-to-1 for adults.” According to the Huffington Post, HHS officials thought they could justify 3.49 because that rounds down to 3 and would comply with the statute.

    “Agencies have lots of room to interpret ambiguous statutes,” wrote University of Michigan law professor Nicholas Bagley in a blog post. “But there's no ambiguity here. The statute says no more than 3, period.”

    AARP, the advocacy group for older Americans, called letting insurers charge older consumers higher rates “a bad deal for Americans” and said it would consider a lawsuit if the Trump administration issues such a rule.

    Bagley said it's nearly certain the courts would block this change, and that protracted litigation would only heighten the uncertainty that's roiling the individual insurance market.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    congress prescription drugs
    PBMs, Big Pharma face off in House hearing
    Biden COVID copy_i_i.jpg
    Biden administration asks employers to help more workers who lose Medicaid
    Most Popular
    1
    Centene to lay off 2,000 workers
    2
    How health systems are battling price-gouging allegations
    3
    Senate advances bill to temporarily aid hospitals, health centers
    4
    Elevance, Blue Cross Louisiana halt $2.5B proposed deal
    5
    Tower Health to sell urgent care centers, close others
    Sponsored Content
    Modern Healthcare Alert: Sign up for this breaking news email to be kept in the loop as urgent healthcare business news unfolds.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • 40 Under 40
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing