The Trump administration will be scaling back its oversight of Obamacare starting next year, moving some duties to the states, amid criticism from advocates that it will hurt patients.
This week, the administration quietly informed insurers that it would give states more power to decide which plans are sold on Obamacare’s marketplaces in 2018. The move comes the same week Trump said he might try to withhold subsidies to Obamacare insurers to get Democrats on board with repealing the law.
The change affects Obamacare plans sold on healthcare.gov, used by residents in 38 states to purchase Obamacare. It does not affect the 12 state-run exchanges.
The Centers for Medicare and Medicaid Services currently reviews all of the plans and their rates before they are sold on the exchanges. CMS also reviews which drugs those plans will cover. Some states, however, recommend which plans the government should sell on the exchanges.
Starting in 2018, CMS will rely on those recommendations instead of performing its own reviews. Technically, CMS still has to give the final say on which plans can be sold on the exchanges.
However, CMS said in the letter to insurers on Thursday that the state recommendations will “be given great weight.”
Currently, seven of the 38 states make recommendations, according to data from the nonpartisan think tank Commonwealth Fund. However, more states could start to make recommendations to take advantage of the relaxed federal scrutiny.
Republicans have said that one reason Obamacare should be repealed is to give states more flexibility to develop plans.
The recommendations could vary among states, one expert said.
“There will be a high degree of variation between proactive states that rigorously enforce the federal standards and those states that conduct very limited reviews,” said Caroline Pearson, senior vice president for the research firm Avalere Health. “That could mean that enforcement of some benefit requirements fall through the cracks in states that do not have the interest or resources to conduct thorough plan reviews.”
That worries a coalition of patient advocacy groups, but could please conservatives who have been pushing for the federal government to give states more flexibility in health insurance markets.
The change also would affect the drugs offered in insurance plans.
CMS reviews a drug formulary, which is the list of drugs offered by a plan, and cost-sharing amounts for pharmaceuticals sold in Obamacare plans. But starting in 2018, it will force states that already offer plan recommendations to conduct the reviews.
“Some states may have the resources and tools to conduct these reviews, but most do not,” said a statement from I Am Essential, a group of 200 patients groups, on Friday.
States have been relying on CMS to review if plans are charging patients too much for drugs, the group said.
“Left alone, some plans limit coverage, charge high patient cost-sharing and employ other techniques that constitute discrimination, particularly against those patients with serious and chronic health conditions,” said Carol Schmid, deputy executive director of the AIDS Institute.
Some groups were also upset they couldn’t weigh in on the shift.
“Neither patient groups nor anyone else from the public was able to comment on this new guidance,” said Beatriz Duque Long, senior director of government relations for the Epilepsy Foundation.
The Department of Health and Human Services did not return a request for comment.
The change comes as the Trump administration takes the reins of a healthcare law that the president campaigned against.
The White House and the Republican-controlled Congress are continuing to work toward a deal that would gut Obamacare and partially replace it, but it hasn’t been finalized. The plan would give states more options on what they had to cover on the individual market, which is for people that don’t get insurance through work and includes Obamacare’s marketplaces. But that move could lead to some benefit requirements of Obamacare being weakened, which doesn’t sit well with centrist Republicans or patient advocacy groups.
