WASHINGTON — The Obama administration continues to alter the Affordable Care Act and propose changes to Medicaid funding as it seeks to increase the number of Americans who have health insurance and slow the pace of medical cost inflation.
In a nudge to get more healthy people into the insurance pool, the government increased the penalty people must pay for remaining uninsured.
The minimum penalty rises to $695 this year from $325 last year. The law sets the penalty as the greater of $695 or 2.5% of taxable income, with the fine collected through the tax returns of uninsured individuals.
In another alteration, the administration has responded to complaints from insurance companies by making it harder for Americans to obtain health insurance after the close of the open enrollment period, which for 2016 ended on January 31.
Insurers said that many people took advantage of so-called special enrollment periods last year to belatedly buy an insurance policy after becoming sick and needing health care.
The ACA’s special enrollments are meant to give consumers flexibility under circumstances such as a marriage, a new baby or a job change. The administration last year actively urged uninsured Americans to use special enrollments to become covered, though insurers complained that the government was lax in making sure newcomers were eligible to enter the public marketplace after the regular enrollment period had ended.
By reducing the number of special enrollment periods, the administration hopes to persuade insurers to stay in the public insurance marketplace and slow the rate of premium increases in future years.
UnitedHealth Group Inc., the nation’s biggest health insurer, recently raised its estimate of the losses it will sustain in 2016 on ACA plans, to more than $500 million.
Earlier, the company projected a loss of between $400 million and $425 million. UnitedHealth last year said it was considering withdrawal from the health law marketplace, which represents a small part of its business. The company last month said its overall insurance business is robust, generating $157 billion in revenue in 2015, a 20% increase from a year earlier.
The White House is also proposing to increase federal funding for states that opt to expand Medicaid for low-income residents. The administration’s budget for 2017 will have the federal government picking up the entire cost of the expansion for three years, regardless of when a state decides to accept the expansion.
Currently, the federal government is picking up 100% of the total cost through 2016 and then gradually reducing its share to 90%, with the states required to pick up the rest. The proposed tweak is part of the administration’s effort to weaken resistance to Medicaid expansion by 19 states.