Christopher Holt June 14, 2019
This week
the Trump Administration finalized a rule expanding the allowable uses
for Health Reimbursement Arrangements (HRAs). This
rule is the third action—following a rulemaking on Association Health Plans (AHPs) and Short-Term Limited-Duration Insurance Plans (STLDIs)—coming
out of the president’s October 2017 executive order “Promoting Healthcare
Choice and Competition Across the United States.” Over a year and a
half after the executive order was issued, this week’s action provides a good
opportunity to review the effort.
First,
the administration finalized a rule just shy of a year ago expanding the use of
AHPs. Prior to the rulemaking, membership in a given AHP was limited
to businesses in the same industry. AHPs allow various groups to join together,
potentially across state lines, for the purpose of getting a better deal on
health insurance. At the time, supporters of the Affordable Care Act
(ACA) criticized the rule as an attempt to undermine the law’s health-insurance
marketplace. These concerns appear to have been overstated, as between
January and March of this year more than 30 new AHPs were established,
covering at least 30,000 beneficiaries with little
to no appreciable effect on enrollment in the ACA marketplace. The AHP effort
hit a snag in March, however, when a U.S. District Court blocked most of the
rulemaking on the grounds that it was an “end-run around” the ACA. The Department
of Labor has appealed the ruling, and in the meantime
the newly established AHPs are blocked from taking on new enrollees and no
further AHPs can be formed.
Also last
summer, the Trump Administration finalized rulemaking expanding the
availability of STLDIs. Traditionally, STLDIs provide temporary
coverage for individuals who have a short break in health insurance. Because
these plans are outside of the ACA’s regulatory framework, however, they don’t
have to conform to the ACA’s rules regarding benefit design and coverage
requirements. They also aren’t subject to the ACA’s guaranteed issue
requirements or the ban on preexisting condition exclusions. The Obama Administration
restricted STLDIs to a duration of less than three months, and insurers were
barred from renewing them when they expired. The Trump Administration allowed
STLDIs to be issued for up to 364 days. Additionally, and importantly, STLDIs
are now renewable—at the discretion of the issuer—for up to 36 months. Once
again, outraged supporters of the ACA claimed this rulemaking was aimed at
undermining the ACA marketplace, and once again the policy change does not
appear to have had a negative impact on the ACA marketplace.
Now, the
Trump Administration has finalized this rulemaking expanding HRAs. Before the
ACA, HRAs allowed employees to use tax-preferred dollars to purchase individual
market insurance or a la carte health care services; the
ACA outlawed most uses of HRAs. The new rule allows employees to use HRA funds
to purchase ACA-compliant individual market insurance and contains
stipulations intended to prevent employers from moving less healthy employees
onto the individual market. Of note, the Treasury Department’s modeling
indicates that as many as 7 to 8 million individuals could enter the ACA
marketplace over the next decade as a result of this rule and finds
that if the health status of these individuals tracks that of the rest of the
group market, the impact could be a 3 percent decrease in marketplace premiums.
Each of
these proposals are still early in their rollout, and the AHP changes could
still ultimately be thwarted by the courts. But the potential for these policy
changes to positively impact choice and premiums is clear, and the predicted
negative impacts have yet to materialize. Only time will tell, but if
the administration’s goal is to increase coverage while reducing costs, for now
it looks to be on the right track.
https://www.americanactionforum.org/weekly-checkup/reviewing-the-trump-administrations-health-insurance-actions/#ixzz5r7AC5vW7
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