Opinion

Administration’s Proposed ACA Rules Create Legal Loopholes for Discrimination

Lawmakers set to “repeal and replace” the Affordable Care Act must face a new reality: More Americans support the ACA now than ever before. According to a Pew Research Center poll, 54 percent of the public (132 million adults) now favors maintaining the law.

Contributing to this support is the provision that insurers cannot discriminate against anyone with a pre-existing condition either by dropping coverage or forcing those with chronic, rare, or debilitating diseases to pay more in out-of-pocket costs. Yet a Feb. 15 proposed rule from the Department of Health and Human Services would give insurers new regulatory loopholes.

Billed as changes to “stabilize” ACA insurance marketplace, some HHS proposals may seem reasonable. However, when taken as a whole, they create a policy framework for insurers to discriminate against Americans with preexisting conditions. Of added concern, the comment period is 21 days for this rulemaking, unprecedented given its significance, which is why it is necessary to shine a light on the very real consequences for all Americans.

For many consumers, the consequence of HHS’s proposal to cut the 2018 open enrollment period from three months to six weeks (Nov. 1 to Dec. 15) is half the time to learn their options and enroll in a plan that adequately meets their medical needs. HHS says this step will reduce the number of people who buy a policy only after they learn they are sick. This may sound reasonable but the result would be fewer enrollees, including healthy people to improve the risk pool.

There are also consequences to making it harder for people who lose their health insurance, move, or experience another “Qualifying Life Event” to sign up for a plan outside of the open enrollment period. HHS would require these individuals to prove their eligibility, which may also seem reasonable. However, the impact of requiring an estimated 650,000 people to submit detailed forms to insurance companies and wait without coverage until their eligibility is verified would be a significant drop in healthy people enrolling in the ACA marketplace, which insurers need.

The proposed changes would allow insurers to sell marketplace plans with even higher deductibles and copayments than currently allowed. Specifically, the rule would lower the “actuarial value” — the percentage of costs the insurer will cover — by 2 percent, which puts more of the burden on patients. The administration touts this change as a way to lower premiums, but for consumers, the consequence would be less coverage and higher costs.

What is most egregious, however, is HHS’s plan to take an ax to the “guaranteed availability” provision of the ACA, which gives people receiving advance premium tax credits a 90-day grace period if they fall behind in paying their premiums. Currently, the ACA requires insurers to pay for care during the first month and then classify any claims as pending for the next two months. If the consumer catches up on premium payments within this period, the insurer must reinstate coverage and pay the pending claims.

Rather than keep this policy, HHS would allow insurers to cut off anyone who doesn’t pay the monthly premium right way and reject them if they try to reenroll later if they still have an outstanding balance. The consequence would be to permanently block thousands or even millions of Americans from re-enrolling in an exchange plan due to lack of continuous coverage.

Combining these proposals, it is easy to see what will happen. Individuals with chronic, rare, and debilitating diseases who already have a hard time paying for their medications will be charged even more in out-of-pocket costs. Without guaranteed availability, they will be excluded from coverage until they do pay up. Yet, with the reduced open enrollment period, they only have six weeks to come up with the funds or lose out on enrolling in a plan. Once they do pay their bills, they will not qualify for special enrollment. As a result, insurers will be permitted to discriminate against individuals based on their preexisting condition without violating the letter of the law.

In sum, the proposed regulations are nothing more than a way for insurers to turn the clocks back to before the ACA was enacted, when many Americans were excluded from coverage due to their health condition. Today, 12.7 million Americans are insured through state exchange plans and the uninsured rate among adults aged 18-64 is the lowest in history. Politics aside, we have come too far as a nation to go back to the coverage gap of the past.

 

Stacey L. Worthy is the executive director of the Aimed Alliance and a health care policy expert.

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