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Policy changes aim to avoid lost coverage, rate hikes through November.
With just six months to go until the November Congressional elections, the Obama administration is trying to get health reform out of the spotlight. It is revising policies, extending deadlines and canceling unpopular proposals, with an eye to softening negative impacts on insurers, consumers and employers. Democrats face an uphill fight to retain their slight majority in the Senate, and incumbents don’t want to see headlines about how the Affordable Care Act (ACA) has led to cancelled plans and higher premiums.
The White House is either taking “a smart, common-sense approach” to implementing the ACA, according to House Minority Leader Nancy Pelosi (D-Calif.) or trying to “hide the true impact of Obamacare from the American people,” according to Sen. Orrin Hatch (R-Utah).
Last month, the Centers for Medicare and Medicaid Services (CMS) announced it would not implement significant proposed changes in the Medicare Part D drug benefit, responding to cries of outrage from patient groups, plan sponsors, drug companies and members of Congress on both sides of the aisle.
That about-face came on the heels of deciding to extend consumer access to non-grandfathered health plans for two more years-the announcement timed to give insurers ample time to factor this change into 2015 products and rates. However, only 24 states extended the sale of old plans for this year, and some insurers are not offering the old policies. But because more young and healthy individuals tend to stay in low-cost, limited plans, some expect this “transition” strategy to undermine the risk pool for the exchanges.
To offset that development, CMS also revised risk corridors and reinsurance policies to assist insurers incurring higher-than-anticipated costs, stabilizing premiums for 2015 in the process. CMS decreased the 2014 reinsurance “attachment point” or threshold for triggering reinsurance from $60,000 to $45,000 to better protect insurers. And the agency said it would adjust risk corridors on a state-by-state basis to increase subsidies to insurers that lose money due to enrollment remaining in the “transitional” non-grandfathered plans instead of the exchanges.
CMS also scheduled open enrollment for 2015 to begin November 15 and run for three months through mid-February. The feds justify the later start as giving insurers more time to set rates and finalize plans-but it also keeps 2015 options out of sight until after the elections.
Other changes aim to please employers. In February, the coverage mandate was delayed until 2016 for businesses with 50 to 100 full-time workers. CMS also reduced reinsurance fees for certain self-insured, self-administered plans, including some sponsored by labor unions.
How reform will play this election year remains to be seen. “Implementation over the next six months will be key, as people see what the program really looks like,” said Republican analyst Dean Rosen at last month’s policy conference sponsored by America’s Health Insurance Plans (AHIP).
Chris Jennings, former White House health advisor, predicted that the economy and jobs will be the top issues for voters, while reform will remain in the background, except in states with contentious Senate races.
People most fear rising premiums and lost coverage, added Democrat pollster Peter Hart. And more voters want to “fix and keep” ACA, rather than to “repeal and replace” it, said Republican analyst Bill McInturff. The individual mandate remains highly unpopular, but Republicans have been divided over constructive alternatives to “Obamacare.” ACA bashing may not win the day.