Trump administration loosens restrictions on ObamaCare waivers

Trump administration loosens restrictions on ObamaCare waivers

© Victoria Sarno Jordan

The Trump administration took another step forward to allow states to promote insurance plans that don’t comply with ObamaCare protections. Also, lobbying disclosure results were due last night, and we’re especially interested in how the drug industry has been spending its money. 

Trump administration loosens restrictions on ObamaCare waivers

New guidance from the Trump administration will let states pursue conservative insurance policies that previously were not allowed under the Obama administration. The guidance will allow states to apply for waivers from many of ObamaCare’s core components, making it easier for them to promote cheap, skimpy insurance policies.

Currently, states can apply for waivers from certain ObamaCare policies in order to help shore up individual insurance markets. The waivers were designed with specific “guardrails” meant to ensure that the waivers met at least the same coverage level as under ObamaCare.

The new guidance loosens those restrictions and allows states to promote health plans that don’t require the same level of coverage as the federal health law, including charging higher premiums for people with pre-existing conditions. In addition, state legislatures will no longer have to approve the waiver plans; that power will rest only with the governor.

The guidance takes effect immediately, but it will take some time for states to implement and likely won’t have an impact on insurance markets until 2020.

Who benefits? The guidance is a boon for red states that were previously denied ObamaCare waivers because they would not have provided sufficient coverage. States previously had to prove the waivers wouldn’t result in people having worse coverage. Now, the standard is merely “access” to coverage, rather than quality of coverage.

Who gets hurt? According to health advocates, the new guidance could allow states to create what’s essentially a parallel insurance market that will siphon off the young, healthy people from ObamaCare exchanges. This will make premiums spike for the people left in the exchanges — likely those with pre-existing conditions.

In addition, states would also be able to “target” their ObamaCare subsidies differently, so they can give more money to help consumers buy cheaper short-term duration plans, and less money for more comprehensive plans on the state or federal exchange.

The administration’s argument: According to Centers for Medicare and Medicaid Services Administrator Seema Verma, the new guidance is all about promoting flexibility. The administration has been a major supporter of waivers, but Verma said the Obama administration’s interpretation was too narrow and restrictive.

“The bottom line is the previous guidance just didn’t allow any creativity. We’ve only granted eight waivers, and seven are exactly the same type,” Verma said on a call with reporters. “States were coming to us with all kinds of creative ideas, but the guidance was too restrictive and thwarted innovation.”

Read more about the new guidance here.

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