Last week, the Trump Administration announced a set of sweeping rule changes for health plans offered through the Affordable Care Act (ACA) marketplace that, after a public comment period, will be finalized in spring and go into effect next year. The anticipated proposal comes after the expiration of enhanced ACA subsidies at the end of last year.
One of the primary changes is the focus on catastrophic coverage.
Catastrophic plans through Healthcare.gov – the federal health exchange platform that Montanans use to enroll in marketplace plans – cover preventative care and three primary care doctor visits. Any care outside of that, the deductible must be hit before coverage kicks in.
Such plans have low premiums, making them more affordable to consumers on a month-to-month basis. The trade-off is high annual out-of-pocket costs. As such, catastrophic plans are usually intended for healthier people who need access to healthcare on a less frequent basis.
The Centers for Medicare & Medicaid Services (CMS) and Health and Human Services’ (HHS) proposal solidifies the administration’s move last year to allow anyone below the poverty line (annual income of $15,650) or 2.5 times above the line to join catastrophic plans. The rule change would also allow insurers to offer up to 10-year-long catastrophic plans.
I’m Zoë Buhrmaster, here to break down the shifting insurance marketplace.
The proposal also includes a 130% increase to the annual out-of-pocket maximum – from $10,600 for individuals and $21,200 for families to $15,600 for an individuals and $27,600 for a family next year. According to HHS, the move is intended to reduce some of the marketplace pressure driving increasing premiums.
Health research nonprofit KFF estimates that 54,000 people nationwide enrolled in catastrophic plans last year. In Montana, out of the 77,221 people that selected marketplace plans, only about 300 people enrolled in catastrophic plans.
HHS officials wrote in the proposal that the changes serve as a way to distinguish catastrophic plans from bronze plans, the next level of coverage on marketplace, and could help increase enrollment in the low-premium, high-deductible plans. While they estimate that the changes will decrease marketplace enrollment by up to 2 million people in 2027, HHS officials say other policies in the rule packet, like special enrollment verification, will ultimately lower premiums by 1.8%.
In the Feb. 9 announcement, HHS Secretary Robert F. Kennedy Jr. applauded the proposed rule for lowering premiums and expanding consumer choice.
U.S. Sen. Steve Daines echoed the sentiment. On Tuesday, Daines spokesperson Gabby Wiggins said that Daines “supports President Trump’s effort to offer more choices and lower premiums for consumers and accountability for bad actors.”
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