An Explanation of a Rule Submitted by Trump’s Administration (Not Trump Personally) to Stabilize the Insurance Market

The Trump Administration submitted a rule meant to stabilize the insurance market. We explain the proposed rule.

TIP: This shouldn’t be confused with Trump’s executive order on the ACA or other healthcare proposals.

A rule was submitted by HHS, but we don’t know first hand what is in it.

However, according to insiders, it likely contains the following three ideas: one OK one, one good one, and one so bad that I cannot help but rant after I cover the gist of it.

Here are the ideas:

  1. Insurers would have more leeway to vary prices by age so that premiums for the oldest customers could be 3.49 times as large as those for younger customers. The Affordable Care Act stipulates that premiums for the old are limited to being 3 times as high as premiums for the young. According to sources privy to HHS discussions with insurers, officials would argue that since 3.49 “rounds down” to three, the change would still comply with the statute. NOTE: This was a long time coming. It is in every GOP plan. I don’t see how to avoid it. Expected.
  2. People who want to apply for coverage mid-year, outside of open enrollment, would have to provide documentation of a qualifying life change such as a divorce or lost a job before coverage begins. Presently, insurance can kicks in for such people right away, as soon as they apply for it, subject to verification afterward. NOTE: Special enrollment is important, but we need a specific set of rules. If people aren’t making a good faith attempt to get covered, it makes sense they need to provide documentation and not just be able to use this loophole in on a whim. This is OK on paper but could get dicey as a bureaucrat takes charge of your health insurance if, say, you lose your job because you are too sick to work. In this instance, you’d have to fax a form to healthcare.gov ASAP and wait back for approval. You could not seek care ASAP. It’s a slippery slope, but not unreasonable.
  3. Insurers could cut off coverage for people who are more than 30 days late on premiums. Presently, lower- and middle-income consumers who qualify for the law’s tax credits get a 90-day grace period.

It is this third idea that is total and utter garbage. It first appears to me to be written by someone in a swamp, who was born in a swamp, who knows nothing but the swamp.

The person who wrote this, I would wager, has never purchased their own healthcare. They have never dealt with auto-pay, never had a banking glitch, never had a credit card stolen or maxed out unexpectedly, never filed an appeal, and they probably have never seen the comment section on this page. Even the most careful people may be late on a payment from time to time through no fault of their own.

Maybe the idea was pulled straight from Marilyn Tavenner’s Stabilizing the Individual Health Insurance Market; maybe it came directly from the health insurance industry; maybe it was just some random bureaucrat being glib. It is so useless that it doesn’t even qualify as fertilizer.

Maybe it is just a misquote, and I’ll eat my words, then at least we could say one good thing came out of this. But assuming it isn’t a misquote…

I used to say ObamaCare has a few sticking points, one was costs (high deductibles specifically, but also premiums), one the family glitch, one was the psychology of the mandate, and one was monthly contracts and plan drops for non-payment. Why are we mandated to renew a contract every month with a private company who saves money by dropping us? It is better than before the ACA, but in the same way that indentured servitude is better than slavery, just barely.

I understand the logic is to reduce premium growth by tightening up the rules. However, this isn’t the rule that needs tightening. You need to tighten rules where people are taking advantage of loopholes. There is no advantage in failing to pay your bill if you aren’t receiving compensated care. The insurer isn’t paying your claims at 45 days past due, so you still have to make good on your payments before they pay your claims.

People either don’t pay because they aren’t going to and don’t have the money (which is sad) or because of a mistake resulting in payments not going through resulting in a plan drop (which is sad and frustrating). Why are we punishing people in bad situations by letting them be dropped after missing only one payment and limiting their ability to get insurance for the rest of the year?

The only reason it potentially saves money is that it kicks poor people and the unfortunate middle-class who have billing issues off their insurance for a year. It wouldn’t help “stabilize” anything.

Joe-the-employee or Jane-the-staffer with an employee health plan doesn’t have to worry about this, and money won’t be saved from their wallet.

It isn’t reform; it isn’t smart, and it isn’t a fix. It is just a predatory spray and pray solution that, just like the ACA, seem to be blissfully unaware of people’s needs.

Either don’t pass rule three or, if you must, consider tweaking it first.

For example, the rule could include, “if payment cannot be processed, the insurer must seek the payment and make a good faith attempt to notify the consumer” that would be “less bad.” Perhaps insurers could have a system to sign up for that texts you if you forget, perhaps a call or an email. When I spend thousands of dollars on something, I expect at least a call in the morning or a thank you note, but every industry is unique.

In my experience as a writer who talks to so many people directly and as an insurer holder, it appears to me that insurers make next to no effort on the first stages of billing, and sometimes it feels as though they almost want you to forget and go away. Those early premiums are all money in their pockets.

Even better than a band-aid fix like the above, would be to offer 12-month contracts for health care and help reduce the number of people kicked off their plans for any reason mid-year.

Or, better yet, pass something like this reform suggestion we came up with: Health Insurance Cancellation Reform for Non-Payment.

Alternately, why not “seek universal coverage via a tax and not punish people who can’t afford to maintain a premium.”

The idea of just shortening the window for payment is an injustice in the current system. How can we ask someone to suffer the mandate, paired with plan drops, paired with a health insurance industry which waits by patiently for your plan to drop you? What other industry wants its customers to leave? Even my cable provider calls once in a while just to chat.

If you are going to mandate 12 months of creditable coverage, then don’t make me have to watch my credit card like a hawk to ensure X-insurer didn’t drop me each month. I would much rather help to fund a single payer system, pay my taxes and focus on working, than on dealing with the nightmare insurance industry bureaucracy.

Do we want to get rid of billing and claims nonsense as it says in the Better Way Plan? If so, let’s start here, with the individual market.

Give me 12-month contracts or give me a tax; stop trying to narrow the windows. I understand how statistics work, but this isn’t about curbing a few premium costs by playing games of adjustments and mathematics. It is a matter of ethics.

The only thing that fails in a bigger way than this so far is the GOP’s so-far-unsubmitted pre-existing conditions continuous coverage exemption. Or maybe the time that conservatives created the mandate and worked with liberals to create RomneyCare, but then took away the public option portion, called it ObamaCare, and fought against it for 8 years while reforms that were needed, but never implemented, helped to dig the hole we are in now. That is in the past. Today the proposed rule is something we can work on together now. Save money by all means, but don’t save it there.

Learn moreTrump Administration May Use Executive Authority To Tweak Obamacare’s Rules (a simple Huff post article), Stabilizing the Individual Health Insurance Market (what CMS thinks we should do), Trump submits rules to stabilize individual insurance market (an article that describes the above ideas). Remember that I’m quoting a he-said-she-said, and I’m hoping I am wrong about what I see.

What do you think?

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