Welcome to Trumpcare! Proposed Changes Raise Costs, Weaken Coverage

The Trump administration on Wednesday announced new proposed rules for the Affordable Care Act (ACA), or Obamacare—and while they "don't amount to sweeping changes," the tweaks are predicted to raise costs for consumers while benefiting insurance companies and further undermining the critical healthcare law.

A proposal from the Health and Human Services Department (HHS) "would change the rules for insurers that sell coverage through the Affordable Care Act's exchanges or directly to individuals," as the Huffington Post explained. Among other things, HHS seeks to "dramatically" shorten the 2018 open enrollment period and tighten enrollment eligibility "to deter people from waiting to sign up for insurance until they get sick or otherwise need health services," CNBC reported

The Washington Post added that "the changes would eliminate federal reviews of whether health plans in the ACA marketplaces have enough doctors and other providers of care, delegating the task to states."

Additionally, the proposal "would water down the standards for what coverage insurers provide," according to HuffPo.

Business Insider explains: "Essentially, the ACA established minimum standards for coverage (here's a full breakdown from CMS) in order to be certified on the bronze, silver, and gold plan levels. The new rule would allow insurers to cover slightly fewer areas of health and still be at a certain metal level."

The nonpartisan Center for Budget and Policy Priorities (CBPP) offered further analysis:

The proposed rule allows individual-market insurers to offer plans with higher deductibles and out-of-pocket costs, but lower premiums, than they're now allowed to offer. That's because it allows plans with lower "actuarial value." Actuarial value is the share of a typical consumer's medical costs that the plan covers, as opposed to what the consumer pays directly through deductibles, copays, and coinsurance. For example, in a silver plan with an actuarial value of 70 percent, the plan picks up 70 percent of a typical consumer's costs for covered benefits, while the consumer would expect to pay 30 percent of costs out of pocket.

To help consumers understand and compare plans, marketplace health plans are tiered by actuarial value: 60 percent (bronze), 70 percent (silver), 80 percent (gold), and 90 percent (platinum). Current rules allow insurers to still meet their actuarial value standards if they deviate by a "de minimis" 2 percentage points from these standard values. The proposed rule would allow plans with actuarial values as much as 4 percentage points below the standard values. That would allow bronze plans with higher deductibles than any current marketplace plans. It also would allow silver plans with actuarial values as low as 66 percent. By allowing for such silver plans, the rule would reduce the size of premium tax credits for millions of families.

This CBPP chart lays out the potential impact for a family of four with $65,000 of income:

 CBPP)(Credit: CBPP)

In essence, Wednesday's HHS announcement begins to outline what one commentator referred to as "Trumpcare," the hallmarks of which will be "lower enrollment [and] higher costs for consumers."

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