Rewriting the rules and regs – guess who bears the brunt
March 1, 2018
The frenetic pandemonium of Donald Trump’s first year as president has overshadowed his administration’s efforts through executive orders and regulation changes to reshape American life. Stymied by his failure to win congressional approval for most of his big-ticket campaign promises like a border wall with Mexico or the total repeal of President Barack Obama’s signature healthcare reform, Trump has turned to administrative action for his successes.
As he learned with the tax cuts, working with Congress on legislation often takes time. But a swipe of the pen in the form of an executive order from the White House can often enact broad changes in government policy and practices quickly.
Whether or not you agree with his goals, or the way he goes about governing – and of course, whether you like or dislike Trump himself – this is how he is getting things done. His administration has rewritten the rules for all kinds of industries from energy to airlines, and on issues from anti-discrimination protections for transgender students to campus sexual assault. He has remade the justice system, rewritten environmental rules, overhauled public lands policy and put in place advocates who will guarantee this ideological vision for decades to come.
It is these less-noticed regulations and executive orders that may cause even bigger difficulties for everyday Americans, particularly seniors.
Complicating retirement planning
One of those would roll back or delay Obama-era rules and regulations that protected retirement savings from unscrupulous financial advisers. Known as the fiduciary rule, a financial adviser who acts as a fiduciary would be required to take the time to learn about a client’s circumstances before making financial planning or investment recommendations, to make sure the advice is in the client’s best interests.
Retirement planning decisions become more complex for older workers approaching retirement, which is why the rules were promulgated in the first place – to protect retirement savers from unethical or unskilled financial advisers, some of whom are really no more than sales people. The Trump administration has delayed the date of the rule until mid-2019. They also ended a rule that allowed consumers to file class-action suits against financial companies and repealed a rule allowing states to create retirement savings plans for private-sector workers.
Rolling back the Affordable Care Act
Many business leaders have applauded the moves aimed at fulfilling Trump’s campaign promise to end policies he says are strangling the economy. But critics say his reductions in environmental and worker protections put corporate profits before public health and safety in direct contradiction to the populist campaign rhetoric that helped Trump win blue-collar votes.
Nowhere has this regulatory effort been more concentrated and focused than on trying to rid the government of every aspect of President Obama’s Affordable Care Act (ACA), known as Obamacare.
While Congress has been repeatedly unsuccessful in repealing and replacing the law, Trump started day one of his administration with an executive order to minimize Obamacare’s “economic burden.” While it had no real bite, it set the tone for what the administration wanted to do. Without much help from Congress, Trump’s efforts to kill off parts of the law have been moving forward in bits and pieces through administrative actions.
The president recently moved to end a key set of Obamacare subsidies that enabled lower-income enrollees to pay for their health care. These cost-saving reduction reimbursements for insurance had stabilized the Obamacare markets and helped 56 percent of those in the health program – or nearly 6 million enrollees. Threats to cut the subsidy payments that help cover expenses for low-income consumers have created enough uncertainty over the past year that major insurers have pulled out of some state markets or asked much higher monthly premiums for 2018.
Additionally, just before the enrollment period to register for 2018’s Obamacare program, the administration announced it would slash its ACA advertising budget by 90 percent. The Department of Health and Human Services (HHS) also said it would reduce spending on groups known as “Navigators” that help customers find the appropriate insurance plan.
When Congress approved the tax bill last December, Republican lawmakers, on party-line votes in the House and Senate, included a provision repealing the individual mandate, the requirement that most people have health insurance, which they couldn’t get approved in their more comprehensive repeal and replace efforts.
Of special importance to the growing number of the aging population (sometimes considered the “not quite ready for Medicare yet” set) include:
The latest move from the White House designed to make it easier for people to buy cheaper and skimpier health care coverage that doesn’t comply with the Obamacare rules. They want to do this by allowing small businesses to band together with an association so they can get more and cheaper coverage for their employees. This would also allow people to buy plans that do not include the pre-existing protections required under the ACA.
The Center for Medicare and Medicaid Services (CMS) has proposed some new rules that would weaken the “essential health benefits” requirements for insurance plans in the individual and small-group markets. It would exempt many association health plans from core Obamacare requirements like the coverage of certain essential benefits. These include prescription drugs, emergency care, mental health, rehab, preventive and wellness services, among other things, that all plans are required to cover. Under CMS’s plan, the states could set minimum requirements, allowing insurers to scale back prescription drug coverage, for example, as long as it ramped up coverage in another category.
That allows them to make plans less appealing to someone they don’t want to cover, such as someone with long-term conditions like diabetes or arthritis – in other words, older folks.
The Trump administration has been busy with all kinds of other regulations and executive orders that will affect seniors in many ways:
- Recently, CMS released landmark guidance aimed at allowing states to impose work requirements for Medicaid beneficiaries, a major shift in the design of the health insurance program for the poor and disabled. States have never been able to get the federal government’s okay to allow this. People will lose coverage for sure if this becomes policy, so expect lawsuits to come.
- On a brighter side, in February, Trump proposed lowering prescription drug costs for Medicare beneficiaries by allowing them to share in rebates that drug companies pay to insurers and middlemen as part of the 2019 budget plan. Drug companies now pay rebates to insurers and pharmacy benefit managers to help their medications gain a bigger slice of the market. Insurers apply savings from rebates to keep premiums more manageable. The administration’s idea is to let seniors covered by Medicare’s popular “Part D” prescription benefit be able to share in the rebates for individual drugs that they purchase at the pharmacy.
- Trump’s 2019 proposed budget plan would also expand Medicare’s “catastrophic” drug benefit so that many seniors with very high costs would not face copayments. Seniors with high drug bills are currently still responsible for 5 percent of the cost of their medications. With some new drugs costing $100,000 a year or more, patient costs add up quickly.
These ideas are sure to spark a nasty fight between the drug companies on one side and insurers and pharmacy benefit managers (PBM) on the other, with billions of dollars at stake. Insurers and PBMs like Express Scripts, CVS Health and United Health/OptumRx say the reason drug costs are so high is that drug companies are free to charge what the market will bear. The pharmaceutical industry says middlemen like the PBMs are the problem because they keep these rebates instead of passing them on to patients. Insurers counter that rebates are passed on through lower premiums for everyone.
- CMS ended mandatory bundled payments for cardiac and hip replacements, which the agency says will allow hospitals greater flexibility in how they care for patients.
- Medicaid has given states three extra years to carry out plans for helping more than 3 million elderly and disabled people receive Medicaid services without being forced to go into nursing homes. CMS announced that states will have until 2022 to find ways of delivering care to Medicaid enrollees in home and community-based settings;
- HHS plans to restore nursing homes’ ability to require that patients pre-emptively give up their right to sue for negligence – reversing a major win for consumer advocates – after saying that a 2016 ban on mandatory arbitration agreements “underestimated the financial burdens placed on providers” forced to defend themselves against lawsuits.
To follow ongoing executive orders and new regulations, you can track them in the Federal Register at http://www.federalregister.gov/executive-orders/donald-trump/2017 or read Politico’s The Agenda at http://www.politico.com/agenda/.
Contributing to this story were AP, Politico, Reuters, The Atlantic and the Washington Post.