A new proposal by White House will see a significant reduction in premium payments after several changes have been made to the current healthcare policies. However, critics of the new proposal argue that after implementation, the proposal will lead to an increase in costs. The Congress was asked in a memo to; allow the expansion of access to health savings accounts, increase premiums for older Americans, and at the same time adopt the use of short-term plans for long-term purposes.
The Trump Administration argued there is a need for the middle-class to be provided with some relief because the administration understands the recent efforts by Congress to pop exchanges. Federal CSR payments were terminated last fall by the Trump administration, and that is why the new proposal came as a surprise to many stakeholders. The decision to end CSR payments was informed by the lawsuit that had been filed against the Obama Administration by House Republicans claiming that the Congress did not approach the payments. As a result, the payments were considered to be unconstitutional.
After receiving the CSRs payments, insurance companies are expected to ensure there are lower out-of-pocket costs such as deductibles, coinsurance, and copayments. The policy affects individuals that constitute close to 250% of the poverty level at the federal level. Similar changes had been suggested by proposed rule where there was a need to expand access to short-term plans. The Affordable Care Act rules do not affect the coverage option. In this case, lifetime limits and annual limits form part of the ten essential health benefits.
Currently, older customers pay three times more than younger people regarding insurance premiums but the new proposal suggests that they should pay five times more than the young policyholders. The main objective of this proposal is to ensure that the individual marketplace attracts more young people.
Apart from that, the White House insists that there is a need to life-protect all federal dollars through proper design of the legislative package that will be passed by Congress. The proposal was slammed by Andy Slavitt, who is a former acting CMS Administrator.
On his Twitter account, Slavitt claimed that the new proposal would raise costs for raise cost for low-income earners such as women, people with illnesses, and seniors. Until 2018, the ACA marketplace had over 12 million people that had signed up for coverage. As a result, there is an expected increase in premiums without CSRs.