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Trump’s Effort To Lure Consumers To Exchanges Could Bring Skimpier Plans

Will opening the door to cheaper, skimpier marketplace plans with higher deductibles and copays attract consumers and insurers to the exchanges next year? That’s what the Trump administration is betting on.

In February, the administration proposed a rule that would take a bit of the shine off of bronze, silver, gold and platinum exchange plans by allowing them to provide less generous coverage while keeping the same metal-level designation.

But consumer advocates and insurance experts say the proposal fails on two fronts. It doesn’t address key concerns among insurers about plan design, and it might push consumers away from the exchanges because it could increase their out-of-pocket costs and reduce the amount they receive in premium tax credits.

The proposal is one of several rule changes the administration put forward to help stabilize the insurance marketplaces while Republicans work to repeal and replace the Affordable Care Act. Repeal is at least temporarily off the table following the failure of the Republicans’ replacement bill, the American Health Care Act. But insurers remain skittish about participating in the marketplaces given the continuing uncertainty and mixed signals from the administration and Congress about how they will go forward overseeing the ACA.

Insuring Your Health

KHN contributing columnist Michelle Andrews writes the series Insuring Your Health, which explores health care coverage and costs.

To contact Michelle with a question or comment, click here.

This KHN story can be republished for free (details).

The proposed rule would let insurers offer plans with higher consumer out-of-pocket costs than now allowed by lowering the minimum coverage requirements, called a plan’s “actuarial value.” Currently, for example, if you buy a silver plan, the most popular choice, the plan must be designed to pay 70 percent of covered medical costs for an average consumer, while you pay the other 30 percent through your deductible, copays and coinsurance.

Because it’s difficult to design a plan that covers exactly 70 percent of medical costs, insurers have some wiggle room. Plans with actuarial values from 68 to 72 percent are considered silver plans.

The new rule would lower the floor by 2 percentage points, allowing insurers to offer silver plans that cover just 66 percent of medical costs. It would do the same for other metal-level plans as well, allowing bronze plans with actuarial values as low as 56 percent instead of the 60 percent standard, gold plans at 76 rather than 80, and platinum plans at 86 rather than 90. (The allowed upper limits wouldn’t change.)

How does this affect consumers? For one thing, the premium is likely to be lower for plans that offer less generous coverage. But the trade-off would probably be higher deductibles, copays and coinsurance. Because all plans must cover the 10 essential health benefits mandated by the ACA, insurers have few options apart from cost-sharing adjustments to alter a plan’s coverage to be more or less generous. If you’re a healthy person who doesn’t need much care maybe that seems like a decent deal, but some consumer advocates aren’t so sure.

“Young adults really care about overall cost sharing and not just premiums,” said Erin Hemlin, director of training and consumer education at Young Invincibles, an advocacy group for this demographic. According to the group’s analysis of 2017 exchange enrollment, 75 percent of 18- to 34-year-olds bought silver plans while just 20 percent bought bronze plans. Cheaper premiums might not be a lure for this group, which is highly sought after by insurers because young people tend to be healthy.

Reducing the minimum actuarial value could also shrink the amount of subsidies to help people buy insurance, advocates say. Marketplace customers with incomes up to 400 percent of the federal poverty limit (about $48,000 for one person) may qualify for tax credits to use toward the premium. But the amount of the tax credit is based in part on the cost of the premium of the second-lowest priced silver plan in the geographic area. If insurers offer some plans with actuarial values of 66 percent, it’s likely one of them will become the “benchmark” on which tax credits are based. Since the premium for that plan would generally be lower than that of a more generous policy, consumers’ tax credits would be smaller too.

“People have to spend more in premiums to get the same coverage because their tax credit is less,” said Aviva Aron-Dine, a senior fellow at the Center on Budget and Policy Priorities (CBPP), who co-authored an analysis of the impact of the proposed change. Alternatively, they could pay the same premium as before for a plan with a higher deductible and other out-of-pocket costs, she said.

Switching to a plan with a 66 percent actuarial value from one at 68 could increase the per-person deductible by $550 to $1,000, according to estimates by CBPP and Families USA.

The proposed rule change isn’t going to help make marketplace participation more attractive to insurers either, said Robert Laszewski, a health policy consultant and longtime critic of the Affordable Care Act.

The proposed actuarial value changes are just “rounding at the edges,” Laszewski said. Insurers are hampered in critical ways by other requirements in the law that limit the types of plans they can offer, he said, citing maximum out-of-pocket spending limits for consumers (currently $7,150 for an individual plan and $14,300 for a family plan), maximum deductibles (the same as the spending limits) and being prohibited from offering plans with even lower actuarial values.

“The biggest obstacles to creating far more flexible plans and particularly appealing to younger, healthier people, are in the statute that the administration can’t change,” Laszewski said.

Please visit khn.org/columnists to send comments or ideas for future topics for the Insuring Your Health column.

Missouri Rejects Federal Money In Order To Set Up Its Own Abortion Restrictions

Kaiser Health News:States - April 04, 2017

Hospitals in Missouri are grappling with a new state rule that forces them to choose between providing abortions for women in high-risk situations or receiving family planning funds for low-income women.

The policy could affect women like Robin Utz, 37, who had struggled with infertility for years. After two rounds of in vitro fertilization, she finally became pregnant.

But at a routine 20-week ultrasound, the nurse fell silent and said she needed to bring in the doctor. The baby had developed polycystic kidney disease, and the baby’s kidneys weren’t working, the doctor told the couple.

“There was therefore no amniotic fluid, and without amniotic fluid she would never develop lungs,” Utz said. “I asked what her chances were, and they said there weren’t any.”

Utz and her husband had to make a decision: terminate the pregnancy or wait until she gave birth. Most likely, doctors said, her baby would be stillborn.

“We just felt so strongly that allowing her to be born, to immediately suffer,” Utz said tearfully, “was so inhumane.”

This story is part of a partnership that includes St. Louis Public Radio, NPR and Kaiser Health News. It can be republished for free. (details)

Utz terminated her pregnancy at Barnes-Jewish Hospital in St. Louis. Generally, higher-risk abortions — for example when a mother’s life is in danger, or there is a severe fetal anomaly — are done in hospitals.

Utz’s care was paid for by insurance. But a new Missouri law, aimed at Planned Parenthood, cuts off a line of funding to all organizations that provide abortions in the state, including hospitals.

For years, Missouri has helped low-income women pay for family planning — but not abortion — under a Medicaid program called Extended Women’s Health Services. It is funded by both the state and the federal governments.

Federal law already prevents Medicaid from reimbursing providers for most abortions. Missouri’s new measure rejects $8.3 million in federal funds for the women’s health program, allowing the state to block state funds for other family planning services from going to abortion providers.

Other states, including TexasArkansasMississippi and Indiana, have tried to exclude abortion providers from Medicaid funds before, but courts have said that would violate a federal law that gives patients the right to choose their health care providers. Missouri hopes to get around that by rejecting the federal money. The rule has not been challenged in court.

Missouri’s Medicaid program for women’s health services currently serves nearly 70,000 low-income patients.

To make up for the lost federal funds, the state is increasing its own funding of women’s health services for low-income residents. Under the new measure, Missouri will spend $8.3 million to create its own program in place of the federal program it has opted out of.

Implications For Health Providers

The state government is also trying to determine exactly which providers perform abortions. It has sent about 500 letters to hospitals, obstetricians, gynecologists and clinics with a form that requires the providers to attest that they do not provide abortions.

So far, more than 300 providers have signed the form and will continue to get state funds, according to the Missouri Department of Social Services. Those who do not sign it will no longer be eligible for state funds for women’s health services.

Doctors at Barnes-Jewish Hospital provide abortions in cases of severe fetal anomalies and to save the life of the mother. (Courtesy of Barnes-Jewish Hospital)

The services at Barnes-Jewish Hospital are not likely to change under Missouri’s new rule. But other organizations might not continue to provide abortions under the new funding restrictions.

Washington University, which employs physicians at Barnes-Jewish Hospital and other facilities, chose not to attest.

“The new restriction … will not alter the health-care services provided by Washington University physicians,” wrote university spokeswoman Diane Duke Williams. “We remain committed to providing the full range of reproductive health-care services to our patients, including pregnancy testing, pelvic exams, breast and cervical cancer screenings, and abortion services to address specific therapeutic needs, such as a mother’s health being at risk or for fetal anomalies.”

The rule, which was passed as part of last year’s state budget, does appear to include an exception for organizations that provide abortions to save the mother’s life.

But that language is restricted to the budget’s preamble, and hospitals say the language is still unclear. As a result, Missouri’s hospital association is counseling its members not to bill the state program for any family planning services if they provide abortions, including procedures to save the life of the mother, or cases of rape or incest.

A National Trend

Like similar measures curbing funding to abortion providers in other states, Missouri’s measure was originally introduced in the wake of videos purporting to show the sale of fetal tissue by Planned Parenthood employees in Texas.

A grand jury in Texas found no evidence of wrongdoing by Planned Parenthood and instead indicted two people who recorded the videos for tampering with a government record and illegally offering to purchase human organs. Those indictments were later dismissed on technical grounds, but California prosecutors charged the same filmmakers with 15 felonies last week.

After the videos were released, Missouri Rep. Robert Ross (R-Yukon) moved to cut all funding to organizations in the state that provided abortions.

“Simple amendment,” he said on the floor of the Missouri House of Representatives in March 2016. “This stops your tax dollars from being used to fund abortions.”

Several Missouri House Democrats questioned Ross, including Democratic Rep. Michael Butler of St. Louis, with whom he had the following exchange:

Butler: “Answer this for me. If women have complications through pregnancy, and they don’t have a primary doctor, where do they go?”

Ross: “Gentleman, it’s really simple. You agree with my amendment, you’re going to vote for it, or you don’t agree, you’re going to vote against it.”

The measure passed. Ross has not returned requests for comment.

This story is part of a partnership that includes St. Louis Public Radio, NPR and Kaiser Health News.

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