ACA lawsuit puts GOP in an awkward position

https://www.axios.com/affordable-care-act-lawsuit-republicans-2c0aff0e-e870-49af-a15e-554d34d3ad62.html

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A lawsuit that threatens to kill the entire Affordable Care Act could be a political disaster for the GOP, but most Republicans aren’t trying to stop it — and some openly want it to succeed.

Between the lines: The GOP just lost the House to Democrats who campaigned heavily on health care, particularly protecting people with pre-existing conditions, but the party’s base still isn’t ready to accept the ACA as the law of the land.

The big picture: A district judge ruled last month that the ACA’s individual mandate is unconstitutional and that the whole law must fall along with it. That decision is being appealed.

  • A victory for the Republican attorneys general who filed the lawsuit — or for the Trump administration’s position — would likely cause millions of people with pre-existing conditions to lose their coverage or see their costs skyrocket.

Some Republicans want the lawsuit to go away.

  • Rep. Greg Walden, ranking member of the Energy and Commerce Committee, supports fully repealing the ACA’s individual mandate, which the 2017 tax law nullified. That’s what sparked this lawsuit, and formal repeal would likely put the legal challenge to rest.
  • Sen. Susan Collins laughed when I asked her whether she hopes the plaintiffs win the case. “No. What a question,” she said.

But other Republicans say they see an opportunity.

  • If the lawsuit prevails, “it means that we could rebuild and make sure that we have a health care system that is going to ensure that individuals are in charge of their health care,” Rep. Cathy McMorris Rodgers said.
  • Sen. David Perdue said that “of course” he wants the challengers to win, which would “give us an opportunity to get at the real problem, and that is the cost side of health care.”
  • Sen. Shelley Moore Capito said she views the lawsuit “as an opportunity for us to assure pre-existing conditions and make sure that we fix some of the broken problems,” but that she doesn’t know if it’d be good if the plaintiffs win.

The bottom line: “The longer we’re talking about preexisting conditions, the longer we’re losing. We need to focus on a message that can win us voters in 2020. The debate of preexisting conditions was a stone-cold loser for us in 2018,” said Matt Gorman, the communications director for House Republicans’ campaign arm during the 2018 cycle.

 

 

10 Notable Health Care Events of 2018

https://www.commonwealthfund.org/blog/2018/10-notable-health-care-events-2018?omnicid=CFC%25%25jobid%25%25&mid=%25%25emailaddr%25%25

2018

Between the fiercely competitive midterm elections and ongoing upheaval over the Trump administration’s immigration policies, 2018 was no less politically tumultuous than 2017. The same was true for the world of health care. Republicans gave up on overt attempts to repeal and replace the Affordable Care Act (ACA) through legislation, but the administration’s executive actions on health policy accelerated. Several states took decisive action on Medicaid and some of the struggles over the ACA made their way to the courts. Drug prices remain astronomically high, but public outrage prompted some announcements to help control them. At the same time, corporate behemoths made deeper inroads into health care delivery, including some new overtures from Silicon Valley. Here’s a refresher on some of the most notable events of the year.

1. The ACA under renewed judicial assault

Texas v. Azar, a suit brought by Texas and 19 other Republican-led states, asked the courts to rule the entire ACA unconstitutional because Congress repealed the financial penalty associated with the individual mandate to obtain health insurance that was part of the original law. District Judge Reed O’Connor ruled in favor of the plaintiffs, creating confusion at the end of the ACA’s open enrollment period, and setting up what may be a years-long judicial contest (yet again) over the constitutionality of the ACA. To learn more about the legal issues at stake, see Timothy S. Jost’s recent To the Point post.

2. Turnout for open enrollment in health insurance marketplaces surged at the end of the sign-up period

The federal and state-based marketplaces launched their sixth enrollment season on November 1 for individuals seeking to buy health coverage in the ACA’s individual markets for 2019. Insurer participation remained strong and premiums fell on average. While some states have extended enrollment periods, HealthCare.gov, the federal marketplace, closed on December 15. After lagging in the early weeks, enrollment ended just 4 percent lower this year than in 2017.

3. The administration continues efforts to hobble ACA marketplaces

While the reasons behind lower enrollment cannot be decisively determined, executive action in 2018 may have contributed. The Trump administration dramatically cut back federal investments in marketplace advertising and consumer assistance for the second year in a row. The federal government spent $10 million on advertising for the 34 federally facilitated marketplaces this year (the same as last year but an 85 percent cut from 2016) and $10 million on the navigator program (down from $100 million in 2016), which provides direct assistance to hard-to-reach populations.

4. Insurers encouraged to sell health plans that don’t comply with the ACA

Another tactic the Trump administration is using to undercut the ACA is increasing the availability of health insurance products, such as short-term health plans, that don’t comply with ACA standards. Short-term plans, previously available for just three months, can now provide coverage for just under 12 months and be renewed for up to 36 months in many states. These plans may have gaps in coverage and lead to costs that consumers may not anticipate when they sign up. By siphoning off healthy purchasers, short-term plans and other noncompliant products segment the individual market and increase premiums for individuals who want to — or need to — purchase ACA-complaint insurance that won’t discriminate against people with preexisting conditions, for example.

5. Medicaid expansion in conservative states

Few states have expanded Medicaid since 2016, but in 2018, a new trend toward expansion through ballot initiatives emerged. Following Maine’s citizen-initiated referendum last year, Idaho, Nebraska, and Utah passed ballot initiatives in November to expand Medicaid. Other red states may follow in 2019. Medicaid expansion not only improves access to care for low-income Americans, but also makes fiscal sense for states, because the federal government subsidizes the costs of newly eligible Medicaid enrollees (94 percent of the state costs at present, dropping to 90 percent in 2020).

6. Red states impose work requirements for Medicaid

A number of states submitted federal waivers to make employment a requirement for Medicaid eligibility. Such waivers were approved in five states — Arkansas, Kentucky, Wisconsin, New Hampshire, and Indiana — and 10 other states are awaiting approval. At the end of 2018, lawsuits are pending in Arkansas and Kentucky challenging the lawfulness of work requirements for Medicaid eligibility. About 17,000 people have lost Medicaid in Arkansas as a result of work requirements.

7. Regulatory announcements respond to public outrage over drug prices

Public outrage over prescription drug prices — which are higher in the U.S. than in other industrialized countries — provided fodder for significant regulatory action in 2018 to help bring costs under control. Of note, the Food and Drug Administration announced a series of steps to encourage competition from generic manufacturers as well as greater price transparency. The U.S. Department of Health and Human Services in October announced a proposed rule to test a new payment model to substantially lower the cost of prescription drugs and biologics covered under Part B of the Medicare program.

8. Corporations and Silicon Valley make deeper inroads into health care

Far from Washington, D.C., corporations and technology companies made their own attempts to alter the way health care is delivered in the U.S. Amazon, Berkshire Hathaway, and J.P. Morgan Chase kicked 2018 off with an announcement that they would form an independent nonprofit health care company that would seek to revolutionize health care for their U.S. employees. Not to be outdone, Apple teamed up with over 100 health care systems and practices to disrupt the way patients access their electronic health records. And CVS Health and Aetna closed their $69 billion merger in November, after spending the better part of the year seeking approval from state insurance regulators. In a surprise move, a federal district judge then announced that he was reviewing the merger to explore the potential competitive harm in the deal.

9. Growth in health spending slows

The annual report on National Health Expenditures from the Centers for Medicare and Medicaid Services estimates that in 2017, health care spending in the U.S. grew 3.9 percent to $3.5 trillion, or $10,739 per person. After higher growth rates in 2016 (4.8%) and 2015 (5.8%) following expanded insurance coverage and increased spending on prescription drugs, health spending growth has returned to the same level as between 2008 to 2013, the average predating ACA coverage expansions.

10. Drug overdose rates hit a record high

Continuing a tragic trend, drug overdose deaths are still on the rise. The Centers for Disease Control and Prevention reported 70,237 fatalities in 2017. Overdose deaths are higher than deaths from H.I.V., car crashes, or gun violence, and seem to reflect a growing number of deaths from synthetic drugs, most notably fentanyl. 2018 was the first year after President Trump declared the opioid crisis a public health emergency. National policy solutions have so far failed to stem the epidemic, though particular states have made progress.

As we slip into 2019, expect health care issues to remain front and center on the policy agenda, with the administration continuing its regulatory assault on many key ACA provisions, Democrats harassing the executive branch with House oversight hearings, both parties demanding relief from escalating pharmaceutical prices, and the launch of health care as a 2020 presidential campaign issue.

 

 

Short-Term Health Plans Hold Savings For Consumers, Profits For Brokers And Insurers

https://www.thelundreport.org/content/short-term-health-plans-hold-savings-consumers-profits-brokers-and-insurers?mc_cid=87537ae734&mc_eid=1d14ffb322

Sure, they’re less expensive for consumers, but short-term health policies have another side: They’re highly profitable for insurers and offer hefty sales commissions.

Driven by rising premiums for Affordable Care Act plans, interest in short-term insurance is growing, boosted by Trump administration actions to ease Obama-era restrictions and possibly make federal subsidies available to consumers to purchase them.

That’s good news for brokers, who often see commissions on such policies hit 20 percent or more.

On a policy costing $200 a month, for example, that could translate to a $40 payment each month. By contrast, ACA plan commissions, which are often flat dollar amounts rather than a percentage of premium, can range from zero to $20 per enrollee per month.

“Customers are paying less and I’m making more,” said Cindy Holtzman, a broker in Woodstock, Ga., who said she gets 20 percent on short-term plan commissions.

Large online brokers also are eagerly eyeing the market.

Ehealth, one such firm, will “continue to shift our focus to selling short-term plans and non-ACA insurance packages,” CEO Scott Flanders told investors in October. The firm saw an 18 percent annual jump in enrollment in short-term plans this year, he added.

Insurers, too, see strong profits from plans because they generally pay out very little toward medical care when compared with the more comprehensive ACA plans.

Still, some agents like Holtzman have mixed feelings about selling the plans, because they offer skimpier coverage than ACA insurance. One 58-year-old client of Holtzman’s wanted one, but he had health problems. She also learned his income qualified him for an ACA subsidy, which currently cannot be used to purchase short-term coverage.

“There’s no way I would have considered a short-term plan for him,” she said. “I found him an ACA plan for $360 a month with a reduced deductible.” (A federal district court judge in Texas issued a ruling Dec. 14 striking down the ACA, which would among other things impact the requirements of ACA coverage and subsidies. The decision is expected to face appeal.)

Short-term plans can be far less expensive than ACA plans because they set annual or lifetime payment limits. Most exclude people with medical conditions, they often don’t cover prescription drugs, and policies exclude in fine print some conditions or treatments. Injuries sustained in school sports programs, for example, often are not covered. (These plans can be purchased at any time throughout the year, which is different than plans sold through the federal marketplaces. The open enrollment period for those ACA plans in most states ends Dec. 15.)

Consequently, insurers providing short-term plans don’t have to pay as many medical bills, so they have more money left over for profits. In forms filed with state regulators, Independence American Insurance Co. in Ohio shows it expects 60 percent of its premium revenue to be spent on its enrollees’ medical care. The remaining 40 percent can go to profits, executive salaries, marketing and commissions.

A 2016 report from the National Association of Insurance Commissioners showed that, on average, short-term plans paid out about 67 percent of their earnings on medical care.

That compares with ACA plans, which are required under the law to spend at least 80 percent of premium revenue on medical claims.

Short-term plans have long been sold mainly as a stopgap measure for people between jobs or school coverage. While exact figures are not available, brokers say interest dropped when the ACA took effect in 2014 because many people got subsidies to buy ACA plans and having a short-term plan did not exempt consumers from the law’s penalty for not carrying insurance.

But this year it ticked up again after Congress eliminated the penalty for 2019 coverage. At the same time, the premiums for ACA plans rose on average more than 30 percent.

“If I don’t want someone to walk out of the office with nothing at all because of cost, that’s when I will bring up short-term plans,” said Kelly Rector, president of Denny & Associates, an insurance sales brokerage in O’Fallon, a suburb of St. Louis. “But I don’t love the plans because of the risk.”

The Obama administration limited short-term plans to 90-day increments to reduce the number of younger or healthier people who would leave the ACA market. That rule, the Trump administration complained, forced people to reapply every few months and risk rejection by insurers if their health had declined.

This summer, the administration finalized new rules allowing insurers to offer short-term plans for up to 12 months — and gave them the option to allow renewals for up to three years. States can be more restrictive or even bar such plans altogether.

Administration officials estimate short-term plans could be half the cost of the more comprehensive ACA insurance and draw 600,000 people to enroll in 2019, with 100,000 to 200,000 of those dropping ACA coverage to do so.

And recent guidance to states says they could seek permission to allow federal subsidies to be used for short-term plans. Currently, those subsidies apply only to ACA-compliant plans.

Granting subsidies for short-term plans “would mean tax dollars are not only subsidizing commissions, but also executive salaries and marketing budgets,” said Sabrina Corlette of Georgetown University Center on Health Insurance Reforms.

No state has yet applied to do that.

For now, brokers are focusing on getting their clients into some kind of coverage for next year. Commissions on both ACA and short-term plans are getting their attention.

After several years of declining commissions for ACA plans — with some carriers cutting them altogether a couple of years ago — brokers say they are seeing a bit of a rebound.

Among Colorado ACA insurers, “it’s gone from about $14 to $16 per enrollee [a month] to $16 to $18,” said Louise Norris, a health policy writer and co-owner of an insurance brokerage.

Rector, in Missouri, said an insurer that last year paid no commissions has reinstated them for 2019 coverage. For her, that doesn’t really matter, she said, because once carriers started reducing or eliminating commissions, she began charging clients a flat rate to enroll.

Norris noted that some states changed their laws so brokers could do just that.

At least one state, Connecticut, ruled that insurers had to pay a commission, which she thinks is protective for consumers.

“Insurance regulators need to step in and make sure brokers are getting paid,” said Norris, or some brokers, “out of necessity,” might steer people to higher-commission products, such as short-term plans, that might not be the best answer for their clients.

Her agency does not sell short-term or some other types of limited-benefit plans.

“I don’t want to have a client come back and say I’ve had a heart attack and have all these unpaid bills,” she said.

 

 

 

20% of Americans are deferring healthcare because of cost, poll finds

https://www.beckershospitalreview.com/finance/20-of-americans-are-deferring-healthcare-because-of-cost-poll-finds.html?origin=rcme&utm_source=rcme

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Americans are delaying medical care as they struggle with its affordability, according to the latest NPR-IBM Watson Health poll.   

The survey of more than 3,000 U.S. households in July found about 20 percent of respondents or someone in their household had postponed or canceled a healthcare service due to cost in the prior three months. 

Younger respondents were more likely to put off their healthcare needs. Thirty-four percent of respondents under 35 said they deterred care because of cost, compared with 8 percent of respondents 65 and older.

The poll also found 26 percent of respondents or someone in their household had difficulty paying for some type of healthcare service in the prior three months.

Again, younger respondents were more likely to experience trouble. Forty-one percent of respondents under 35 said they or a member of their household struggled to pay for a healthcare service, compared to 11 percent of respondents 65 and older and 26 percent of respondents ages 35 to 64.

The poll found 66 percent of respondents said they received a prescription in the prior three months, and 97 percent of those respondents had it filled. Of the respondents who said they had a prescription filled, 19 percent reported they had trouble paying for it.

Access the full poll results here.

 

Middle-income Americans paying more for health insurance

https://www.healthcaredive.com/news/middle-income-americans-paying-more-for-health-insurance/543903/

Dive Brief:

  • Middle-income families are spending more of their incomes on health insurance as average premiums skyrocketed in 2017 after modest rate increases earlier this decade, The Commonwealth Fund found in a new report.
  • Average employee contributions rose to nearly 7% of median income for single and family plans compared to 5.1% a decade ago. Premium contributions were 8% of median income or more in 11 states, including Louisiana, which had the highest percentage (10.2%).
  • The contributions and potential out-of-pocket spending for single and family policies was $7,240 in 2017. That was 11.7% of median income and an increase from 7.8% a decade ago.

Dive Insight:

Cost and price variations between areas aren’t anything new. A recent Network for Regional Healthcare Improvement found healthcare usage and pricing drive variation between states’ total healthcare costs. The report also found vast differences in costs between five states studied.

Overall, national health spending has slowed in recent years. The CMS Office of the Actuary reported this month that national health spending grew 3.9% ($10,739 per person) in 2017. It was the second consecutive year of slower healthcare spending growth. The slower cost growth is connected to fewer people receiving care.

The Commonwealth Fund found large differences between states. For instance, the average annual premium contributions for single-person plans ranged from $675 in Hawaii to $1,747 in Massachusetts. Michigan saw the cheapest premiums in family plans at $3,646 while Delaware had the highest at $6,533.

The average annual deductible for single-person policies increased to more than $1,800 in 2017. The gap was between $863 (Hawaii) and about $2,300 (Maine and New Hampshire). Three states (Florida, Mississippi and Tennessee) had average deductibles more than 6% of median income.

Premiums for employer health plans, which is how most Americans get coverage, increased 4.4% for single plans and 5.5% for family plans in 2017. All but five states saw higher single-person premiums with eight states averaging more than $7,000 (Alaska, Connecticut, Delaware, Massachusetts, New Jersey, New York, Rhode Island and Wyoming).

Meanwhile, family premiums increased in 44 states and were $20,000 or more in seven states (Alaska, Connecticut, Massachusetts, New Jersey, New York, West Virginia and Wyoming) and the District of Columbia.

The cost of health insurance is increasing faster than wage growth — and the Commonwealth Fund found that the added cost isn’t leading to higher-quality health insurance. The issue is especially a problem in southern states with lower median incomes, such as Mississippi.

The group suggested policymakers could tackle the problem of rising healthcare costs in a couple of ways.

Congress could provide more tax credits to people with employer-sponsored insurance, require businesses to improve plan benefit design to cover more services before employees reach their deductibles and offer refundable tax credits to offset out-of-pocket costs.

Other potential efforts include connecting provider payments to value and outcomes, addressing the concentration of payer and provider markets and slowing prescription drug cost growth. “Policymakers will need to recognize that the increasing economic strain of healthcare costs facing middle-income and poor Americans is driven by multiple interrelated factors and will require a comprehensive solution,” according to the report.

 

Federal Subsidies Could Expand to Health Programs That Violate Obamacare

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 The Trump administration said Thursday that states could bypass major requirements of the Affordable Care Act by using federal funds for a wide range of health insurance programs that do not comply with the law.

Federal officials encouraged states to seek waivers from provisions of the law that specify who is eligible for premium subsidies, how much they get and what medical benefits they receive.

It was “a mistake to federalize so much of health care policy under the Affordable Care Act,” Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, told state officials at a conference in Washington.

The new policy outlined by the administration on Thursday upends a premise of the Affordable Care Act: that federal subsidies can be used only for insurance that meets federal standards and is purchased through public marketplaces, also known as insurance exchanges.

Under the new policy, states could use federal subsidies to help people pay for employer-sponsored insurance. Consumers could combine federal funds with employer contributions to buy other types of insurance.

Under the Affordable Care Act, premium tax credits are available to people with incomes up to four times the poverty level, roughly $83,000 a year for a family of three. With a waiver, states could provide assistance to higher-income families.

The Trump administration laid out templates for state programs — waiver concepts — that could significantly depart from the model enacted by Congress in 2010.

Alex M. Azar II, the secretary of health and human services, said states could use the suggestions to “create more choices and greater flexibility in their health insurance markets, helping to bring down costs and expand access to care.”

Democrats assailed the initiative as an audacious effort to undermine the Affordable Care Act. And they said the administration was ignoring the midterm election success of Democrats who had promised to defend health care that they said was threatened by President Trump and Republicans in Congress.

“The American people just delivered an overwhelming verdict against Republicans’ cruel assault on families’ health care,” said the House Democratic leader, Nancy Pelosi of California. “But instead of heeding the will of the people or the requirements of the law, the Trump administration is still cynically working to make health insurance more expensive and to leave more Americans without dependable coverage.”

Senator Ron Wyden of Oregon, the senior Democrat on the Finance Committee, said the administration was creating a fast lane for swift approval of “junk insurance.”

The Affordable Care Act prohibits insurers from denying coverage or charging higher premiums to people with pre-existing medical conditions. At campaign rallies this fall, Mr. Trump repeatedly promised: “We will always protect Americans with pre-existing conditions. Always.”

Ms. Verma said Thursday that “the A.C.A.’s pre-existing condition protections cannot be waived.

But states could use federal funds to subsidize short-term plans and “association health plans,” in which employers band together to provide coverage for employees. Such plans are free to limit or omit coverage of benefits required by the Affordable Care Act, such as mental health care, emergency services and prescription drugs.

A provision of the Affordable Care Act allows waivers for innovations in state health policy. The federal law stipulates that state programs must provide coverage that is “at least as comprehensive” as that available under the Affordable Care Act and must cover “at least a comparable number” of people.

Two powerful House Democrats said the new guidance issued by the Trump administration was illegal because it did not meet the standards for waivers set forth in the Affordable Care Act.

“It is contrary to the plain language of the statute, and it appears to be part of the administration’s ideologically motivated efforts to sabotage the Affordable Care Act,” said a letter sent to Mr. Azar by Representatives Frank Pallone Jr. of New Jersey and Richard E. Neal of Massachusetts.

In issuing the guidance, they said, Mr. Azar also violated the Administrative Procedure Act, which generally requires agencies to provide an opportunity for public comment before adopting new rules.

Republican governors have been pleading with federal officials to give states more authority to regulate health insurance.

Paul Edwards, a deputy chief of staff to Gov. Gary Herbert of Utah, a Republican, said, “Utah welcomes all efforts that give us maximum flexibility to structure our health care programs to the unique needs of our citizens.” State officials “will look closely at how these new rules could benefit Utahns,” he said.

Brenna Smith, a spokeswoman for Gov. Kim Reynolds of Iowa, a Republican, said the governor “has a proven track record of expanding health care options for Iowans and is eager to see the new opportunities this proposal might open up.”

Iowa tried last year to get a waiver under Obama-era guidance, seeking essentially to opt out of the Affordable Care Act marketplace by offering customers a single plan with lower premiums and a high deductible.

Ms. Reynolds ultimately withdrew the request in frustration, saying at the time that “Obamacare’s waiver rules are as inflexible as the law itself.”

One option for states is to take federal funds and put the money into accounts that consumers could use to pay insurance premiums or medical expenses.

Likewise, Ms. Verma said: “States can develop a new state premium subsidy structure and decide how premium subsidies should be targeted. States can set the rules for what type of health plan is eligible for state premium subsidies.”

She was speaking Thursday at a conference of the American Legislative Exchange Council, a conservative group that promotes limited government and drafts model legislation.

 

New insurance guidelines would undermine rules of the Affordable Care Act

https://www.washingtonpost.com/national/health-science/new-insurance-guidelines-would-undermine-rules-of-the-affordable-care-act/2018/11/29/ff467f46-f357-11e8-aeea-b85fd44449f5_story.html?utm_term=.c279fcb895a6&wpisrc=al_news__alert-hse–alert-national&wpmk=1

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The Trump administration is urging states to tear down pillars of the Affordable Care Act, demolishing a basic rule that federal insurance subsidies can be used only for people buying health plans in marketplaces created under the law.

According to advice issued Thursday by federal health officials, states would be free to redefine the use of those subsidies, which began in 2014. They represent the first help the government ever has offered middle-class consumers to afford monthly premiums for private insurance.

States could allow the subsidies to be used for health plans the administration has been promoting outside the ACA marketplaces that are less expensive because they provide skimpier benefits and fewer consumer protections. In an even more dramatic change, states could let residents with employer-based coverage set up accounts in which they mingle the federal subsidies with health-care funds from their job or personal tax-deferred savings funds to use for premiums or other medical expenses.

If some states take up the administration’s offer, it would undermine the ACA’s central changes to the nation’s insurance system, including the establishment of nationwide standards for many kinds of health coverage sold in the United States.

Another goal of the ACA, the sprawling 2010 law that was President Barack Obama’s preeminent domestic accomplishment, was to concentrate help on the individual insurance market serving people who do not have access to affordable health benefits through a job. Prices were often out of control and discrimination against unhealthy people was more prevalent before the ACA imposed required benefits, prohibited insurers from charging more to people with preexisting conditions and created a federal health exchange and similar state-run marketplace in which private insurance companies compete for customers.

The ACA health plans have been the only ones for which consumers can use the subsidies, designed to help customers with incomes up to the middle class — 400 percent of the federal poverty line — afford the premiums.

The new advice, called “waiver concepts” because they are ideas for how states could get federal permission to deviate from the law’s basic rules, stray from both of those goals. And it would allow states to set different income limits for the subsidies — higher or lower than the federal one.

The day before they were released by Seema Verma, administrator of the Department of Health and Human Services’ Centers for Medicare and Medicaid Services, an analysis by the Brookings Institution questioned the legality of the content and method of these concepts. The analysis by Christen Linke Young, a Brookings fellow and HHS employee during the Obama administration, contends that “there are serious questions” about whether the changes are allowable under the law and that “at the very least, it is likely invalid” for CMS to issue the advice to states without going through the formal steps to change federal regulations.

In a statement Thursday, HHS Secretary Alex Azar said: “The Trump administration is committed to empowering states to think creatively about how to secure quality, affordable healthcare choices for their citizens.” He said the four recommendations issued Thursday, including new accounts in which consumers could pool federal subsidies and other funds, are intended to “show how state governments can work with HHS to create more choices and greater flexibility in their health insurance markets, helping to bring down costs and expand access to care.”

In a midday speech before a gathering of the conservative American Legislative Exchange Council, Verma delivered a broadside against the health-care law in explaining the rationale for freeing states to rework health policies on their own. “It was such a mistake to federalize so much of health care in the ACA,” said Verma, who worked as a consultant to states before becoming one of Trump’s senior health-care advisers. While the law sought to make health coverage more available and affordable, she said, “the insurance problem has not been solved. For many Americans it’s even been made worse.”

In urging states to consider the changes, CMS is renaming a provision of the law, known as 1332, which until now has mainly been used to give states permission to create programs to ease the burden on insurers of high-cost customers. CMS is switching the name to “State Relief and Empowerment Waivers,” emphasizing the administration’s desire to hand off health-care policies to states.

The changes go beyond a variety of other steps Trump administration health officials have taken in the past year to weaken the ACA, which the president has opposed vociferously.

Until now, they have focused on bending the ACA’s rules for health plans themselves. The administration has rewritten regulations to make it easier for Americans to buy two types of insurance that is relatively inexpensive because it does not contain all the benefits and consumer protections that the ACA typically requires.

The new steps go further by undercutting the basic ACA structure of the individual insurance marketplaces created for those who cannot get affordable health benefits through a job.

During a conference call with journalists, Verma said that no state would be allowed to retreat from a popular aspect of the ACA that protects people with preexisting medical conditions from higher prices or an inability to buy coverage.

She said that, in evaluating states’ proposals, CMS would focus on several considerations, including whether changes would foster comprehensive coverage and affordability and would not increase the federal deficit. She said federal officials would favor proposals that help, in particular, low-income residents and people with complex medical problems.

Verma reiterated an administration talking point that insurance rates have escalated since the ACA was passed and that health plan choices within ACA marketplaces have dwindled. However, the current ACA enrollment period, lasting until mid-December, is different from the previous few because prices for the most popular tier of coverage have stabilized in many places and more insurers are taking part in the marketplaces.