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After weeks of talking about repealing and replacing the Affordable Care Act or Obamacare, the Trump administration made a move today. The Department of Health and Human Services proposed tightening rules on how and when people can buy coverage. That's so insurance companies will stay in the market during the transition to a new system. NPR's Alison Kojak reports the changes could mean fewer people get coverage.
ALISON KODJAK, BYLINE: The proposed changes are aimed at making the individual health care market less vulnerable to manipulation by consumers. Insurance companies have complained that people sign up only when they're sick and drop coverage after getting care. Just yesterday, insurance giant Humana announced it was dropping out of the ACA exchanges altogether next year because not enough healthy people are buying insurance. And this morning, Aetna CEO Mark Bertolini told an audience at a conference sponsored by the Wall Street Journal that the health insurance market under Obamacare is failing.
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MARK BERTOLINI: And in the first look at this quarter, it's not going to get any better. It's getting worse.
KODJAK: His company lost millions last year on its Obamacare business. The changes proposed by HHS to shore up the exchanges include cutting the annual open enrollment period to about six weeks instead of three months. They'd also require people who want to sign up for coverage during so-called special enrollment periods to first prove they qualify because of a life change like losing a job or getting divorced. But those changes may not have the desired effect says Sabrina Corlett, a research professor at Georgetown University's Center on Health Insurance Reforms.
SABRINA CORLETTE: The overall effect of many of the policies in here would actually, over time, I think, shrink enrollment, not grow enrollment.
KODJAK: That's because making it harder to enroll and adding more paperwork will just turn off more people.
CORLETTE: You're healthy people are the ones who are going to be more likely to say this is too much of a pain in the neck. I'm not going to go through with this.
KODJAK: But Caroline Pearson, a senior vice president at Avalere Health, says some change is needed.
CAROLINE PEARSON: The special enrollment period is a real problem in the market.
KODJAK: Her research shows that people who buy insurance during special enrollment period spend a disproportionate amount of money on health care. The HHS proposal makes other changes to help insurers, too. It allows them to increase deductibles and co-payments, and it says insurance companies can demand consumers pay off any missed premiums before they get a new policy.
PEARSON: In total, I think that the rule is helpful for insurers but probably not enough to change any given health plan's mind about how to approach the exchange markets.
KODJAK: So Humana is unlikely to rethink its decision because of these changes. While HHS is working to stabilize Obamacare as Congress debates its fate, the IRS is relaxing its plans to enforce the ACA tax penalty. The agency says it's responding to President Trump's executive order directing it to ease the burden of the health care law. Pearson says that could lead healthy people to drop their health plans.
PEARSON: In total, I actually think that the exchange market is going to shrink in size dramatically as a result of both the rule and the IRS move.
KODJAK: Alison Kojak, NPR News, Washington.
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