Throwing a Wrench into Obamacare – The Effects of the Administration’s Latest Moves

After a week of reflection, the general consensus is the new administration’s “market stabilization” proposal does not do much to alleviate insurer concerns and may, in fact, do some damage. At the same time, the Centers for Medicare & Medicaid Services (CMS) rolled out the new extended deadline for insurers to submit applications for the 2018 Marketplace, moving the date from May 3 to June 21. Insurers are no doubt watching for additional clarity as we quickly approach decision day for next year, and the administration’s latest moves have provided little clarity on what to expect.

Something we previously stated could have quickly ended Obamacare as we know ‒ the lawsuit over cost-sharing subsidies. This week, the Trump administration and Republican members of the House both requested, and were granted, additional time to decide what to do with the lawsuit. A win for the House would have meant the end of cost-sharing subsidy payments to insurers, leaving insurers on the hook for billions of dollars. Rather than providing clarity as to the future of cost-sharing subsidies, both sides agreed to request another extension. The two parties now have until May 22 to provide an update to the court. This development likely signifies the GOP is working on a plan to continue these payments in the ever-elusive repeal/replace proposals.

Another case to closely track right now is Moda Health Plan v. U.S. in which Moda recently won its argument that Moda was underpaid by $214 million in the risk corridor program, the first insurer to win this claim. Given there are many more similar cases, it will be interesting to see how strongly the government pursues further defense. The Trump administration has been strikingly silent on risk corridor payments, which would provide much more relief to insurers than the proposed market stabilization rule.

The IRS also put up a roadblock to the success of the Affordable Care Act (ACA) in 2018 by noting it will not reject returns that omit information about whether a filer had health insurance during the previous year. Technically, this is a continuation of an informal Obama administration policy, however, the decision was formally announced and may have a more significant effect on how individuals file their tax returns and report their lack of insurance. It is plausible this may cause some younger, healthier individuals to abandon ACA for the sake of a higher tax refund.

These latest developments lead to even more confusion about the future of ACA and the timing of repeal/replace efforts. In the midst of the uncertainty, the Trump team also announced it will be releasing a health plan within the next few weeks in March. It is unclear whether this health plan is referring to the Department of Health and Human Services or whether this is referencing the plan promised by Speaker Paul Ryan and company.

To learn more about the current legislative and regulatory landscape, or for any other assistance with policy matters, contact Gorman Health Group’s Policy Team at


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