Repeal and Replace: Obamacare Changes


As promised, the GOP overhaul of the Patient Protection and Affordable Care Act commenced as soon as the Trump Administration took office.

The Trump administration’s changes will impact consumers with health plans purchased through the government Health Insurance Marketplaces primarily. Changes include different dates for the annual Individual and Family Health Insurance Open Enrollment Period, stricter Special Enrollment eligibility rules including requirements to provide proof of prior coverage.

The American Health Care Act is the legislative band-aid to Obamacare, according to its Republican authors and supporters. The final rule will also require overdue premium payments to be paid to insurers, before a proposed member can sign up again with the same company. Certain companies had internal guidelines similar to this, which you may know as a Humana or Blue Cross Blue Shield client through the Marketplace in prior years.


Key Changes to Individual Health Plan Enrollment



Pay Past Due Premiums to Re-Enroll

Health insurance enrollment will be more costly for those who purchase a policy through their state or federal exchange, then neglect to pay premiums, causing the plan to lapse after a grace period. Obamacare allowed health plans to give Marketplace customers 90 days to pay past due premiums before a policy was terminated.


How it Works:

If you signed up with Ambetter, for example, and you paid January – August 2017 premiums, didn’t realize the carrier removed your bank account from autopay, and the plan terminated for nonpayment after 90 days.

Open Enrollment 2018 rolls around, and as you were comfortable with Ambetter you intend to apply with them again. This time, however, Trumpcare requires you to pay September – December 2017 premiums before you can sign up for 2018 coverage with that carrier.

This portion of the Republican healthcare law aims to protect insurers by eliminating opportunities for consumers to game the system. To an insurance company, that means instances such as buying a policy after you become injured, remaining insured long enough to get a procedure, then deciding not to pay for coverage once you’re on the up and up.

From our agency’s experience, more consumers actually stop paying for coverage because of insufficient billing status updates from the carrier, or because the Marketplace changed or removed financial assistance without a member’s knowledge, among other potential errors and unforeseen issues. Insurance groups such as Families USA also have this vantage point, suggesting that “only those who can rapidly come up with a possibly significant sum of money by a given deadline can be guaranteed access to coverage.”


Metallic Tier Formula Adjustments

Affordable Care Act policies are structured by the metallic tier model, assigning cost sharing percentages to each level of coverage. Bronze, Silver, Gold and Platinum plans were established by a complex formula based on an average percentage of annual medical bills covered by each plan. Bronze plans cover an average 60 percent of costs, Silver plans 70 percent, and so forth. Carriers have had the liberty to increase or subtract 2 percent around the averages under Obamacare.

Trumpcare’s solution allow insurers to change the formula with larger variations around the average. Premium costs could then be reduced, making policies more attractive to consumers. That said, annual deductibles could increase by over $1,000 per year, according to a Families USA study.


Special Enrollment Even Stricter


If you have signed up with a special enrollment period, you might be familiar with the feeling of being interrogated by an insurance company, asking for proof of your prior policy termination and any other documents proving your eligibility. The answer from the school of repeal and replace is to prescreen every application for Special Enrollment – those who sign up outside of the Open Enrollment window and must qualify by changing geographical locations, household size, or losing job coverage.

Insurers claim that this provision results in increased costs for their companies, as those who sign up for a qualifying life event were more expensive and less healthy than average.

Starting June 2017, preapproval verification is required by requesting more forms of documentation.