WASHINGTON — Democrats blasted attempts by the Trump administration to “sabotage” the Affordable Care Act during a House Energy & Commerce Health subcommittee hearing on Wednesday.
“We’re inviting people back into a world with mirrors and trap doors, which was exactly the place we wanted to get away from when we passed the ACA,” said Rep. John Sarbanes (D-Md.), who called on his colleagues to “push back against these junk plans.”
House Democrats introduced four bills to roll back administration efforts to loosen or circumvent the ACA’s insurance requirements. In the very unlikely event that they pass the Republican-controlled Senate and gain the president’s signature, they would:
- Require all short-term health plans to include a warning explicitly stating which benefits are included and which aren’t
- Restore marketing and outreach funding for ACA exchanges
- Rescind a regulation that extended the allowable duration of short-term plans (including renewals) to just under 3 years
- Cancel the administration’s new guidance around 1332 waivers, which relaxed certain “guard rails”
Republicans complained that ACA plans are unaffordable for middle-income Americans who don’t receive subsidies, and argued that the Trump administration’s actions allow those same Americans more options for cheaper health plans.
“They’re really trying to give consumers new options, particularly those who were shut out of the market because of costs,” said Grace-Marie Turner, a witness at the hearing and president of the Galen Institute, a conservative think tank, in defense of the administration.
Republicans also pushed back on criticism of the administration’s 1332 waiver guidance, saying Democrats were denying states the right to innovate their programs and instead trying to impose the will of Washington.
Turner stressed that states are better positioned to regulate their own local health insurance markets.
Rep. Michael Burgess, MD (R-Texas), the subcommittee’s ranking member, said that none of the bills being discussed would increase the availability of “reasonably priced plans.”
Are Short-Term Plans Junk?
Much of Wednesday’s discussion focused on short-term plans, which are cheaper than ACA exchange plans but offer a shrunken set of benefits.
In August, the Trump administration issued a final rule extending the duration of these plans for just under 12 months and made plans eligible for renewals for nearly 3 years. Previously, the plans were available for just under 3 months at a maximum.
Rep. Kathy Castor (D-Fla.), who introduced a bill to rescind the short-term plan rule, said she’s worried “the public is being snookered here.”
Hearing witness Katie Keith, JD, MPH, of Georgetown University, highlighted “post-claims underwriting” as a major risk to buyers of short-term plans.
“Maybe you were healthy when you signed up. Then, something happens — you’ve a big medical claim. It triggers an alarm and [the insurers] go back and look at your application, and pull all your medical records again and go, ‘Oh, you should have told us about this,'” she told MedPage Today after the hearing.
Even in cases where a patient was not diagnosed with an illness prior to enrollment, insurers find ways to justify a cancellation, she said.
Rep. Nanette Barragán (D-Calif.) offered one example, a Chicago businessman who was encouraged to buy a short-term plan by a broker even after disclosing symptoms of serious back pain. After he enrolled, the businessman was diagnosed with non-Hodgkin lymphoma. Insurers then reviewed his medical records and determined that the businessman’s cancer was a pre-existing condition, because he had visited a chiropractor in the past, leaving him with over $800,000 in medical bills after 6 months, Barragán said.
“You would never expect your cancer treatment to be denied because you’ve had bad back pain,” Keith said. “That’s something that, I think, disclosures can’t fix.”
Jessica Altman, Pennsylvania Insurance Department commissioner, pointed out that short-term plans may not cover ACA-defined “essential health benefits.” She cited a study showing that less than 60% cover mental health, only about one-third cover treatment for substance use disorder or prescription drugs, and none included maternity benefits.
Altman also noted that short-term plans aren’t required to abide by the ACA’s medical loss ratio requirements. The two largest short-term plan vendors, which control 80% of the market, spend less than half of each premium dollar on “actual medical care,” she said.
But Turner said short-term plans are meant to serve as “bridge plans” for individuals such as early retirees, people in the gig economy, and young entrepreneurs starting a business, who would convert before long to more comprehensive coverage. Turner also emphasized the plans’ affordability — with premiums less than half of what an ACA plan would cost — and stressed that consumers understand the plans aren’t permanent.
Rep. Richard Hudson (R-N.C.) pointed out that states are allowed to impose limits on short-term plans or ban them altogether.
“I think it’s important to note that we’re not forcing anyone into this. We’re giving flexibility to the states,” he said.
He suggested bringing in witnesses from states where plans are available to learn their true impact.
New Waiver Guidance
Another bill, explored at the hearing, would revoke the administration’s changes to 1332 waivers, which loosened standards for what qualifies as healthcare coverage. The administration’s waiver also allows ACA subsidies to be spent on short-term plans.
Rep. Frank Pallone (D-N.J.), who chairs the full Energy & Commerce Committee, said the changes “turn the statute on its head,” exceeding the administration’s authority and “contrary to congressional intent.”
Keith agreed. She said the guidance was inconsistent with the statute itself. Instead of improving access to healthcare, the guidance “undermines” it. In particular, subsidizing short-term health plans “flies in the face of 1332,” she said.
Several Republicans, including Rep. Greg Walden (R-Ore.), ranking member for the full committee, highlighted the successful implementation of reinsurance programs in states such as Alaska, Minnesota, Oregon, and others, claiming that Democrats oppose state innovation.
Keith clarified that the reinsurance programs were approved under the 1332 rules as written by the previous administration, without the Trump administration’s changes.
Any waivers approved under the Trump administration’s new guidance would likely trigger a lawsuit, she said. As for short-term health plans, several patient advocacy group have already filed a lawsuit targeting the administration’s new guidance for those plans.