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Grandmothered Individual-Market Plans

It is reported that the Trump Administration will allow consumers and insurers to extend for an additional small group and individual health plans, which do not comply with the coverage rules of the Affordable Care Act.

The latest guidance from CMS allows grandmothered plans to work until December 31, 2018. It is reported that less than a million users remain in the grandmothered individual-market plans in about 12 states that still allow for these plans. The remaining states, which include New York and California, have already stopped the sale of the non-ACA compliant plans to concentrate on the ACA-regulated markets.

The Obama Administration originally decided to allow grandmothering of plans, but the decision was blamed by many experts, due to problems in some of the individual markets. The decision lead to widespread criticism of President Obama, as he failed to live up to his promise that if users liked their health plan, they could continue with the plan. Under the administration of Obama, the grandmothered plans would have ended by December 31, 2017.

Ceci Connolly, who is the CEO of the Alliance for Community Health Plans representing not-for-profit insurers, said that over the long term, it is very important to get more and more healthy users into the general insurance plans. “But given the confusion and uncertainty in Washington over (healthcare reform),” she added. “We believe reducing disruption is important to consumers.”

Tim Jost, who is an emeritus law professor at Lee and Washington University and a supporter of ACA, has a different opinion. “It’s hard to see how this contributes to the stability of marketplace coverage, although it is apparently what the insurers want,” he said.

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“The policy is consistent with giving states flexibility, but it does mean that some of the best risks will remain outside the standard risk pool,” said Joel Ario, who is the managing partner at Manatt Health. He has served in the Obama Administration to setup the ACA exchange rules.

Healthcare industry has urged the Trump Administration to take measures to stabilize the individual insurance market while they work on revoking and replacing the Affordable Care Act. The administration has released mixed messages on whether they would steady the ACA markets or replace them. However, President Trump had earlier issued an executive order, in his first week at office, which instructs the federal agencies to try hard legally to stop the ACA.