CMS Proposed Rule Would Increase Costs for Moderate-Income Families
Today marks ten years since President Obama signed the Affordable Care Act (ACA). Since then, the ACA has helped over 20 million Americans enroll in health insurance.
This year in New York, nearly five million people used the NY State of Health to enroll in health insurance. Before the ACA, there was no central location to shop for health insurance plans. Almost 800,000 people enrolled in the Essential Plan this year, which did not exist before the ACA. Over three million enrolled in Medicaid, which was expanded through the ACA. And around 273,000 people purchased Qualified Health Plans, 58 percent of whom received advance premium tax credits through the ACA. No one who enrolled in these health insurance plans had to answer questions about their previous health conditions – because under the ACA, anyone can buy insurance no matter what their pre-existing conditions are.
The ACA has also meant higher quality coverage. Under the current federal administration, some states have opted to loosen their health insurance standards. But in New York, paying a premium still means getting a plan that covers a comprehensive set of benefits including prescription drugs, maternity and newborn care, and preventive health screenings and visits. Insurers are no longer allowed to impose lifetime or annual coverage limits, a common pre-ACA practice that stopped coverage when people needed it most.
There’s a lot that could be improved upon in the ACA. For example, HCFANY supports higher income limits for premium subsidies and supplemental premium subsidies funded by the state. Deductibles are too high for many New Yorkers. Network standards are not high enough. But after ten years, evidence has poured in on the law’s benefits: the ACA has reduced racial health disparities (link), kept struggling community hospitals open (link), and made America healthier (link). We are so grateful to all the people who fought to make the ACA happen – and we’re dedicated to protecting and building off of what they won.
Next week, a federal court in Texas will decide if the Affordable Care Act (ACA) and all of its protections for people with pre-existing conditions should stand. This isn’t a new activity for anyone who’s paid attention to the ACA since it passed. Opponents of the law have spent years trying to drag us backwards through court cases and repeal legislation. No matter how many times they fail they still haven’t gotten the message – the ACA makes life better for people. They don’t want to lose it!
However, there’s a big difference between this court case and the many preceding it, which is that the current Administration won’t defend the law. In fact, the Trump Administration is arguing FOR the people trying to get the ACA thrown out. That’s not normally how this works – the Executive Branch’s role is to execute and defend the law. Challengers are allowed to make their case against it, and the courts decide whose arguments are better. When we get a new Administration that wants to change the law, they can try to convince Congress to repeal it or pass a new law.
If the court agrees with the challengers next week, it would have a terrible effect on people’s ability to afford health care. A lot of legal scholars think this particular lawsuit is frivolous. They don’t believe the challengers’ arguments against the ACA will stand up in court, even with the government joining their efforts. They’re more worried that this signals a change in the role of the Executive Branch.
HCFANY is joining other organizations around the state to send letters to New York’s Congressional delegation saying enough is enough. The ACA is helping millions of New Yorkers, and there’s still plenty more work we could do to make health care more accessible. We have to stop wasting time on sabotaging a law that is working pretty well and instead work on improving it wherever we can.
If you’d like to add your name to the letters, you can click on the link to your District below. If you aren’t sure which is yours, type in your zip code at this link. The letters will be delivered on September 5.
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According to a new report from the Kaiser Family Foundation, eliminating cost sharing reductions (CSRs), or subsidies that lower the out-of-pocket costs for moderate-income consumers, would increase overall costs to federal government instead of saving money.
Nationally, CSRs are worth approximately $7 billion annually and reduce out-of-pocket costs for moderate income consumers by $3,350 to $3,600 per year.
CSRs are especially important for New York because CSRs provide nearly $1 billion annually in funding for the Essential Plan, the State’s Basic Health Program, which covers nearly 700,000 New Yorkers.
Continued funding for CSRs is at risk. In 2016, members of the House of Representatives sued the Administration to block funding for CSRs and argued that the Administration had paid for them without Congressional authority. A district court ruled in favor of the House, and the case is now on appeal. The current Administration now has to decide whether or not to move forward with the appeal. If the appeal is dropped, and Congress does not appropriate the CSR funding, millions of consumers may no longer be able to afford coverage.
Although it would appear that eliminating CSRs would save the federal government money, the Kaiser Family Foundation explains that any savings would be coupled with significant increases in costs for the Advanced Premium Tax Credits (APTCs) that lower monthly premiums. The report estimates that ending CSRs would actually result in a net increase in federal costs of $2.3 billion.
Last week, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule for 2018. According to the press release, the proposed rule includes “reforms that are critical to stabilizing the individual and small group health insurance markets to help protect patients.”
However, many of the policy changes in the proposed rule would harm consumers. For example, a recent analysis from the non-partisan Center on Budget and Policy Priorities explains that the proposed rule would reduce the advanced premium tax credits that help make plans purchased through the Marketplace more affordable for moderate-income individuals in families.
According to the analysis, the proposed rule would result in lower tax credits because it lowers the actuarial value standards for “silver” level plans. This means that premiums and the percentage of costs covered by the insurer would decrease, but deductibles and copayments for consumers would increase. Under the Affordable Care Act, tax credits for consumers purchasing coverage through the Marketplace are calculated based on the second lowest cost silver plan. By allowing for lower value silver plans, the new rule would force consumers to pay more out of pocket to maintain their current level of coverage.
Furthermore, the CMS proposed rule also includes provisions to require consumers to provide supporting documentation for special enrollment periods before they can enroll in coverage. The proposed rule would also permit insurance companies to collect any missed premium payments before allowing consumers to re-enroll. Both of these changes could lead to gaps in coverage for consumers or deter enrollment.
Finally, the proposed rule would reduce the open enrollment period for individual and small group health insurance plans from 13 weeks to 6 weeks, which would give consumer significantly less time shop around for and enroll in the best plan for them.