Published April 10, 2018|3 min read
New rules for health plans sold on the individual market give states more flexibility in setting minimum standards for health insurance and make it easier for people to avoid penalties for not having coverage.
The Center for Medicare and Medicaid Services said the new rules, issued on Monday, were part of the Trump administration's push to "promote health care choice and competition, and decrease costs" associated with former President Barack Obama's health law. Proponents of Obamacare and insurance industry experts have already expressed concerns the changes will have the opposite effect.
Here's a look at a few things the rules do.
The rules expand the hardship exemption, which allows people to avoid paying a tax penalty for not having health insurance. Anyone who lives in an area where only one insurer offers health plans on the marketplace is now exempt from the penalty. In addition, anyone who opposes abortion who lives somewhere that only has plans that offer abortions can also qualify for an exemption.
The exemption only matters this year, however. Tax legislation signed in December reduces the penalty for people without health insurance to $0.
The rules give states more power to set minimum standards for individual health plans. Under Obamacare, health plans sold on the marketplace must have 10 essential health benefits, including doctor visits and emergency services. That's still the case, but the rules give states more leeway in setting the benchmarks under which plans offer those benefits, like how many doctor visits plans must cover.
In the past, insurers had to justify rate increases greater than 10% to state regulators. The new rules increase that threshold to 15%. In other words, health insurers can hike premiums by up to 15% without giving a reason. However, states can apply stricter standards — and many do.
The rules allow each exchange to only have one navigator group. They previously required two. The navigator program provides grant money to groups that educate people about the health plans on the exchange and help them enroll.
The rules also remove the requirement that one of the two groups must be a community non-profit and have a physical location in the exchange area. Officials said this would give states more flexibility in picking navigators, though advocates who commented on the rules said they would reduce access to in-person help signing up for health care.
Cathryn Donaldson, a spokeswoman for America's Health Insurance Plans, a group representing health insurers, said the group was still reviewing the rules, but supported policies giving states more flexibility. The group also supports policies that make plans more affordable.
However, Donaldson said AHIP was concerned rules like the expanded hardship exemption "could further destabilize and fragment a market already facing uncertainty."'
"Moreover, we remain concerned about other regulations being put in place—including expanded association health plans and short-term limited duration plans — will also push up premiums and create affordability problems for millions of Americans purchasing coverage in the individual health insurance market," Donaldson said.
Andy Slavitt, a former administrator for the Centers for Medicare and Medicaid Services under Obama, said on Twitter that insurers already profiting from participating in the exchange didn't need the government to loosen rules for them. However, he expected Obamacare to stay resilient, barring further moves from Congress.
In fact, despite a year of moves to undermine Obamacare, prices for plans actually went down for many people this year. We broke down the 2018 numbers for the health marketplaces here.
Image: Steve Debenport
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