Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

Health Care Sabotage: Administration Doubles Down on States’ Ability to Undermine ACA

Print Friendly, PDF & Email

We have previously written about new guidance from the Administration that will make it easier for states to both ignore Affordable Care Act (ACA) coverage and consumer protection rules, and weaken the ACA Marketplace.

Last week, the Centers for Medicare & Medicaid Services (CMS) issued waiver concepts about how states can implement the new guidance. As Kaiser Health reported, “It is intended to roll back key elements of Obama-era requirements, which were designed to promote enrollment in ACA plans that cover a broad range of medical needs and meet uniform national standards.” In the name of “innovation,” these waivers would virtually allow states to create a separate Marketplace by expanding the use of less comprehensive coverage that does not meet ACA standards. These plans, having lower premiums, would attract younger healthier consumers while leaving older sicker people in ever more expensive ACA plans.

The new guidance also allows states to disregard ACA rules governing the use of subsidies to purchase insurance. The ACA currently restricts the use of subsidies to help low-income consumers purchase ACA-compliant coverage. Under the newly issued guidance, states may expand or further restrict who is eligible for a subsidy or allow subsidies to be used for this junk insurance. States would also be allowed to base subsidies on age instead of income. This is a complete reversal of longstanding policy regulating the use of these subsidies, which is critical to the strength of the ACA Marketplace.

There is some doubt as to whether this guidance from CMS passes legal muster. As the Washington Post reports, “Reps. Richard E. Neal (Mass.), ranking minority-party member of the Ways and Means Committee, and Frank Pallone Jr. (N.J.), his counterpart on Energy and Commerce, dispatched a letter Thursday to the secretary of HHS and two other Cabinet members in which they contended that the waiver concepts are illegal.” In an analysis, the Brookings Institution also casts doubt on the legality and permissibility of this guidance, which was developed outside of a formal rule making process. We strongly urge all federal agencies to be transparent regarding opportunities for public comment and active in promoting such opportunities, in order to gather broad feedback from stakeholders and the public. This is especially true of regulatory matters affecting the health care of millions of consumers.

In a speech last week to the American Legislative Exchange Council, CMS Administrator Verma is quoted as saying “So, I am having a real hard time understanding all of the criticism leveled at this Administration. Critics see subterfuge. The reality…we’ve delivered stabilization.” This is clearly not true. The Center for Medicare Advocacy has extensively highlighted actions taken by the Administration that have weakened not stabilized the ACA. Criticism of the Administration’s actions has certainly been warranted. If it looks like health care sabotage, then it must be health care sabotage.