Three Steps the Obama Administration Must Take to Protect Obamacare

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Before the Obama Administration shuts the door and turns off the lights, they must take a few more actions to shore up their namesake: the Affordable Care Act (ACA). Even though this law faces an extremely uncertain future, too many Americans will be relying on its critical foundation for at least the next few years.

The annual Notice of Benefit and Payment Parameters, announced by the Administration on December 16, 2016, contained some important improvements to stabilize the exchanges, which have seen some premiums spike and declining health plan participation. But more must be done. Third Way has urged GOP leaders in Congress to fix the ACA even as they work to repeal and replace it, but it is far more critical for Obama Administration officials to do more before they leave office.

The Administration’s recent action does make some positive changes. The Notice of Benefit and Payment Parameters improves payments to plans that are based on the degree of risk for an enrollee needing high-cost care, which is known as risk adjustment. For example, the notice adds an adjustment for people who enroll for coverage for only part of a year and have higher-than-average costs. It also adds “medication use” as an indication of patients with higher-than-average health care costs.

While such steps will help stabilize health plan premiums in the exchanges for the 2018 enrollment year, here are three additional actions the Administration should also take before January 20:

  1. Permit health plans to not renew enrollees who are delinquent with their payments. The Administration has acknowledged that some consumers game the enrollment system by signing up for coverage only when they are sick. That causes havoc in insurance markets and has a negative impact on the rest of beneficiaries in the system. People should not be getting coverage if they are not paying for it.
  2. Verify appropriate consumer use of special enrollment periods. Major life changes like marriage, a new job, or moving trigger an opportunity to enroll in a health plan through the exchanges outside of the annual open enrollment period. The Administration has proposed a small pilot program to double-check if patients are making the appropriate use of only some of the special enrollment periods. This pilot program, slated to begin on June 1, 2017, does not go far enough. The Administration should skip the pilot phase and go right to requiring pre-enrollment verification for all special enrollment period applications as quickly as possible.
  3. Drop the development of standardized plan options. The final Notice of Benefit and Payment Parameters calls for the development of standardized benefits options to facilitate easier comparison shopping between different health plans. Although that goal is certainly worthwhile, and health plan use of the standardized benefits would be optional at least initially, launching a long-term process to restructure competition in the exchanges now is completely out of step with the highly uncertain future of the exchanges, given the impending debate over repeal in Congress. Standardized benefits options are an unnecessary distraction during a fight over the very survival of exchanges.

The fate of the ACA is in obvious jeopardy with GOP in control of Washington. But tens of millions of people rely on secure and stable coverage from the law, and it is likely they will continue to rely on it for years as GOP replacement plans include a phase-down of the law while a replacement comes into focus. But health insurance markets need immediate bandages—and they need them quickly. The ability to patch them up now will allow millions of Americans to have coverage during this transition. Democrats need to do everything possible to stabilize the exchanges before President Obama leaves office.