Marketplace subsidies may be option in 2020 for plans that skirt Obamacare

The new policy could begin taking effect in 2020. It would allow states to ask for waivers from Affordable Care Act provisions governing not only subsidies that help pay for premiums, but also the benefits insurers must include in plans offered on the federal marketplace to consumers buying their own coverage.

The announcement comes two weeks before the crucial midterm Election Day as health care tops voters’ list of concerns.

States were asking for more flexibility, said Seema Verma, administrator of the Centers for Medicare & Medicaid Services (CMS). This approach would allow the states “to provide consumers plan options that best meet their needs, while at the same time ensuring that those with preexisting conditions retain access to the same coverage as today,” she said.

Under the ACA, states can ask to reconfigure their insurance markets and rules. The Obama administration required any changes to provide the same comprehensive coverage as the health law and not result in fewer people enrolling or increasing costs for taxpayers.

Those guidelines hampered finding creative ways to expand coverage and lower costs, Verma said.

The new guidance substantially revises those Obama-era “guardrails,” allowing waivers so long as access to comprehensive plans remains.

“The big change is they no longer have to worry about making sure that people with preexisting conditions or high health care needs maintain enrollment in comprehensive coverage,” said Sabrina Corlette, research professor at the Center on Health Insurance Reforms at Georgetown University.

“The Trump administration looks like it’s willing to aggressively test the boundaries of the law when it comes to waivers. Whether that’ll stand up in court is very much open to question,” said Nicholas Bagley, a health law professor at the University of Michigan Law School.

Under Monday’s revised guidance, CMS is changing how it defines insurance sold on the ACA marketplaces in 2020 to include short-term or association health plans. These plans don’t have to follow all the Obamacare rules for eligibility and benefits. Short-term plans, for example, don’t have to be comprehensive and can exclude people with certain health conditions or charge them higher premiums. They can leave out coverage for mental health, prescription drugs or maternity care, for example.

Under President Barack Obama, such plans were limited to 90-day terms. The Trump administration this spring said short-term plans could be sold for up to a year and gave insurers the option to renew them for up to three years.

However, they cannot be sold through the health law marketplaces in 2019 and are not now eligible for federal premium subsidies for low-income customers.

Earlier in the year, the administration also approved a rule allowing businesses to band together in “associations” to buy health insurance to offer insurance to members. Critics fear that rule could expose consumers to coverage gaps or higher out-of-pocket costs because these plans would be classified as “large-group plans” and not have to meet some ACA requirements.

The changes unveiled on Monday do not affect people who get their coverage through their jobs.