Numerous federal agencies on Friday said they want new flexibilities for group health plans grandfathered in under the Affordable Care Act.
Under the proposed rule, those plans could change cost-sharing requirements without losing their grandfathered status. The regulation also allows the health plans to meet minimum cost-sharing requirements for high-deductible health plans to enable enrollees to contribute to health savings accounts. The proposed changes wouldn't apply to grandfathered individual plans. If finalized as is, the changes would increase out-of-pocket costs for beneficiaries.
The "proposed amendments are appropriate because they would enable these plans to continue offering affordable coverage while also enhancing their ability to respond to rising healthcare costs," according to the rule, proposed by CMS, HHS, the Department of Labor, the Internal Revenue Service, the Treasury Department and the Employee Benefits Security Administration. Comments on the proposed rule must be submitted by August 14.
President Donald Trump signed an executive order in January 2017, ordering federal agencies to minimize the economic and regulatory costs associated with the ACA.
The Trump administration then put out a request for information in February 2019 to identify opportunities to help plans and issuers preserve their grandfathered status and improve such plans for employers, plan participants and enrollees. In response, several insurance groups asked the Trump administration to allow them to increase out-of-pocket costs to cover the rising costs of drugs.
In a few weeks, insurers will report whether the pandemic continues to buoy their finances. COVID had little impact on publicly traded insurers' first quarter financials, because the pandemic did not effect the healthcare system until mid-March. However, most insurers reaffirmed or even increased their full year earnings expectations, stating that delayed procedures led to a sharp decrease in medical claims.
Grandfathered health plans are exempt from many ACA requirements but cannot deny people coverage because of a preexisting condition. The Trump administration wants to keep the plans afloat because they often have lower out-of-pocket costs than plans covered fully by the ACA.
"The fact that a significant number of grandfathered group health plans remain indicates that some employers have found value in preserving grandfather status," Acting Assistant Secretary for the Employee Benefits Security Administration Jeanne Klinefelter Wilson said in a statement.
According to a 2019 survey by the nonpartisan Kaiser Family Foundation, 22% of organizations offering health benefits have at least one grandfathered health plan, and 13% of covered workers enrolled in a grandfathered plan.