Trump Administration issues proposed rule to allow grandfathered plans to increase out-of-pocket costs

The Trump Administration has issued a proposed rule that would provide greater flexibility for certain grandfathered group health plans under the Affordable Care Act to make changes to cost-sharing requirements without causing a loss of grandfather status. 

It would allow these plans to stray from current pricing regulations and to raise out-of-pocket costs for enrollees.

Grandfathered group health plans and grandfathered group health insurance coverage would be allowed to increase fixed-amount cost-sharing requirements such as copayments, deductibles, and out-of-pocket limits at a somewhat higher rate than under a 2015 final rule. 

However, some employees might partially offset their increases in out-of-pocket payments through increased pre-tax contributions to health flexible spending arrangements such as FSAs or HSAs.

The proposal may also result in a premium reduction.                                                                                                                

WHY THIS MATTERS

Currently, if grandfathered plans violate pricing rules, they lose their grandfathered status and would have to follow all the mandates of the ACA. 

That the proposed rule would protect workplace health plans that don’t meet all of the Affordable Care Act’s regulations is cause for concern, according to House Ways and Means Chairman Richard E. Neal and other Democrats.

The proposed rule could increase costs to the point that some people forego healthcare during a time of economic hardship under the COVID-19 pandemic, opponents said.

Grandfathered health plans are subject neither to the requirement to cover certain preventive services without cost sharing, nor to the annual limitation on cost sharing. If a plan were to lose its grandfathered status, it would be required to comply with both provisions, in addition to several other requirements.

They are required to follow the ACA mandate to not discriminate against enrollees with pre-existing conditions.

THE LARGER TREND

The rule stems from a 2017 executive order issued by President Trump that allows regulatory changes to be made to the ACA. 

The administration is actively trying to overturn the ACA in the U.S. Supreme Court. 

Twitter: @SusanJMorse
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