Fulfilling a campaign promise, but angering a wide swath of hospitals, physicians, healthcare insurers, patient advocacy groups, and other interests with an interest in practical healthcare policy, President Donald Trump this week issued two decisions to destabilize portions of the Affordable Care Act (ACA) .
First he issued an executive order that would allow small businesses to band together to create “association health plans” that essentially would be covered not by state insurance regulators but rather by federal employment law. The order also directs federal agencies to consider expanding the availability of short-term, low-cost health reimbursement arrangements.
Later on Thursday, President Trump said he would end – perhaps as soon as month’s end – cost-sharing reduction (CSR) payments that help lower-income people afford co-pays and deductibles on health plans they buy through insurance exchanges. About 80,000 people in Massachusetts would be affected directly by the loss of subsidies but the broad impact on the state would be deep.
On Friday, Massachusetts Attorney General Maura Healey (D) joined a lawsuit filed by California’s Attorney General, along with other states, to prevent the president from cutting off the CSR payments.
“The loss of funds and financial uncertainty caused by their actions will lead to higher health insurance costs for consumers and to insurers abandoning the individual health insurance market. The number of uninsured Americans will increase once again, hurting vulnerable individuals and directly burdening the States,” the complaint states.
MHA’s President & CEO Lynn Nicholas, FACHE, applauded Healey’s action, calling it an “upstanding effort to protect access to high-quality, affordable healthcare in our commonwealth and across the country.” (See MHA’s full statement here
Republican Governor Charlie Baker also criticized elimination of the cost sharing reductions and called on Congress to take “immediate action” to appropriate funding for the CSRs.
The executive order relating to association health plans also caused concern. Such plans could offer skimpier benefits than required by the ACA and could skirt the prohibition against charging higher premiums to those with preexisting conditions. Such association plans have failed in the past because while they need to be well capitalized, established insurance plans have avoided them.
The American Hospital Association responded on Thursday, stating, “Today’s Executive Order will allow health insurance plans that cover fewer benefits and offer fewer consumer protections. No one can predict future healthcare needs with complete certainty and such plans could put patients at risk when care is needed most. In addition, these provisions could destabilize the individual and small group markets, leaving millions of Americans who need comprehensive coverage to manage chronic and other pre-existing conditions, as well as protection against unforeseen illness and injury, without affordable options.”
MHA’s Nicholas, said, "President Trump's irresponsible decision to discontinue federal insurance cost-sharing reduction subsidies is a devastating one-two punch coming on the heels of yesterday’s Executive Order that could undermine current consumer insurance protections that are especially important to older, sicker, and poorer Americans with private or work-sponsored insurance. These announcements will be particularly disruptive to the Massachusetts healthcare system, as the commonwealth has been structuring the upcoming 2018 open enrollment offerings – now just weeks away – based on some $146 million in previously agreed-to federal support.”