Senate Democrats Blast Latest Affordable Care Act Proposal From CMS

Senate Democrats on Thursday blasted a proposed rule by the Trump administration to allow for “junk health plans” with high deductibles and limited coverage to be sold on the Affordable Care Act’s (ACA) health insurance exchanges.

“President Trump told the American people he would protect them from the ‘big, fat, rich insurance companies, who have made trillions and ripped off America long enough,'” wrote 16 senators in a letter to CMS Administrator Mehmet Oz, MD, MBA. “Rather than keep this promise, this administration has proposed a rule that CMS’ own experts predict will kick 2 million Americans off the healthcare they have and accelerate the healthcare affordability crisis. In short, this proposed rule is just another handout to the insurance industry and profiteering middlemen.”

Under the proposed rule that CMS issued on Feb. 6, plans could sell catastrophic health plans “with extremely high deductibles and out-of-pocket costs,” the letter noted. The rule also suggests loosening network requirements for plans, and proposes that insurers be allowed to offer “non-network” plans — plans without a specific network of contracted providers — that the Democrats say may not cover the cost of care.

In the proposed rule, CMS said it would allow plans that show they can ensure a “sufficient” choice of providers who would “accept the non-network plan’s benefit amount as payment in full.” However, “while enrollees in a non-network plan can receive some benefit for covered services from virtually any provider, there is no guarantee that the plan’s benefit amounts are actually sufficient to cover the provider’s full charges,” and the providers don’t have to accept the plan’s benefit amount as payment in full.

“As a result, non-network plans can leave enrollees with additional out-of-pocket costs that make certain providers, as a practical matter, unavailable,” CMS noted.

As far as how many people would enroll in these new catastrophic or non-network plans, CMS says in the rule that it estimates “average enrollment for 2027 to decrease between 1.2 and 2 million enrollees compared to baseline estimates. Many enrollees will lose coverage due to no longer being eligible for subsidies, and we believe it is likely that healthier enrollees are more likely to discontinue coverage.”

The proposed rule also estimates a 2% to 3% increase in premiums in light of many of the changes; however, CMS said, various other rule provisions will get rid of opportunities for adverse selection, meaning that fewer sick people will enroll in the ACA exchange plans and premiums will therefore actually decline by an estimated 1.5% to 1.8%.

In their letter, the Democratic senators, including Senate Majority Leader Chuck Schumer (D-N.Y.), Senate Finance Committee Ranking Member Ron Wyden (D-Ore.), and Senate Appropriations Committee Vice Chair Tammy Baldwin (D-Wis.), said the proposed rule would “make it easier for insurers to raise out-of-pocket costs, sell new kinds of junk insurance coverage, increase working families’ deductibles, cover fewer services, and kick more providers out of network.”

The letter also pointed out that the proposed rule would let states replace their ACA insurance marketplaces with a “system of for-profit web-brokers” that can take advantage of potential enrollees’ personal information to promote “junk coverage” and would not be required to tell potential enrollees if they were eligible for Medicaid. This system would “make it harder for consumers to make an apples-to-apples comparison” between all available plans, they noted.

“Our healthcare system already favors higher profits for massive corporations over delivering healthcare to all people,” they added. “Turning even more of the healthcare system over to for-profit middlemen directly contradicts the president’s commitment to put American patients ahead of the interests of for-profit corporations.”

“The Republican healthcare crisis has already put healthcare even farther out of reach for millions of Americans … CMS must withdraw this damaging rule and re-propose an annual ACA rule that works to lower out-of-pocket costs and put the interests of patients above those of the insurance industry,” the senators concluded.