"Let us not seek to fix the blame for the past. Let
us accept our own responsibility for the future."
–John F. Kennedy
GOP Failed to Repeal Obamacare in July
A major effort by Republicans to “repeal and replace” the Patient Protection and Affordable Care Act [1]—also known as the ACA or Obamacare—dramatically failed in the Senate at the end of July [2] just before Congress adjourned for summer recess.
During and after that political battle, the majority of the general public continued to have increasingly favorable views of the ACA at 52%, an all-time high since Obamacare was first enacted in 2010 [3].
Contrary to sensationalized claims amid continuous political wrangling, Obamacare is neither thriving nor imploding [4]. The mix of successes and drawbacks vary by region, where some serious flaws do need to be addressed.
However, on the whole, Obamacare has helped advance the American health care system compared to pre-ACA days [5,6], but there remains much room for improvement.
Trump Continues to Undermine Obamacare
Surprisingly, the ACA has been resilient to repeated attacks over the years by the Republican establishment [7] and now also Trump [8,9], who has frequently announced his desire to “let Obamacare fail”. Unfortunately, Trump could still do much more to undermine and damage the ACA if he wanted to abruptly cripple it [10]. Regardless, many legislative fixes and improvements are still needed.
Health care organizations, hospital associations, insurers, and state governors have commented on several areas where Trump could have a substantial and immediate impact on reaffirming (or eroding) confidence in the individual Marketplace, which is the central federal exchange of contracted private insurers where consumers may purchase non-group, non-employer-sponsored health insurance.
Two of those important areas of focus to stabilize the Marketplace in the near-term are paying insurer subsidies and enforcing the law on mandatory enrollment.
Trump is Cagey and Noncommittal Toward Paying Insurers
Trump has been unclear since inauguration whether he would continue to pay cost-sharing reductions (CSR), which are subsidies paid directly to insurers by the federal government to help lower the cost of deductibles and the share of services billed to low-income earners [11].
Notably, Trump has repeatedly claimed CSRs are a “bailout”, which is incorrect and highly misleading [12]. As a condition of Marketplace participation, the ACA requires insurers to provide higher-value plans—whether or not the government upholds its promise to defray the extra costs. This uncertainty makes insurers nervous because they are now exposed to greater financial risk.
Although this Administration has reluctantly paid CSRs on a month-to-month basis (while simultaneously and routinely threatening to stop doing so [13]), Trump has not yet committed to making the payments long-term. When asked last week how the Administration intends to proceed, a Trump official vaguely suggested they “will do the minimum necessary to comply with the law” [14].
As such, for insurers who have stayed in or recently joined the Marketplace, many have included an additional 13-20% increase in the cost of premiums for 2018 under the assumption Trump will not reimburse them [15,16].
Providing a higher standard of benefits, services, and coverage mandated by the ACA without adequate compensation would be a disincentive for insurers to participate in the Marketplace. Higher costs to consumers would also be a deterrent to signing up for health insurance.
The “Individual Mandate” is a Keystone of Obamacare
The Trump Administration has also been vague on whether they intend to enforce the individual mandate [14], which requires individuals to purchase health insurance or pay a penalty.
While the individual mandate is unpopular with some Democrats and many Republicans, informed health policy advocates have urged Trump to not scrap it before coming up with a more palatable bipartisan alternative [17]. Without the mandate, the proportion of healthy enrollees and the associated funds for the entire risk pool would shrink, thereby causing Marketplace prices to balloon out of control.
(To fund the risk pool in the Republican AHCA House bill, individuals who had a gap in coverage were penalized with a rate-hike in premiums upon their return to the Marketplace, while the Senate BCRA bill required a wait period between signing up and accessing health benefits for the first time. All of these mechanisms are designed to maintain funding reserves by preventing people from only signing up for insurance immediately after becoming ill. Everyone offsets financial risk to insurers by “paying into the system” via monthly premiums, for example.)
“Listen All of Y’all It’s a Sabotage”
(Orange Crushes ACA Outreach Efforts)
On August 31, just two months before the Marketplace begins enrollment, Trump has decided to cut spending on Obamacare advertising by 90%, from $100 million down to $10 million [18]. For comparison, California itself plans to spend $112 million on health law advertising.
Trump will be changing the type of ads and reminders too—switching from widespread TV and radio campaigns under Obama to simply emails and text messaging.
As with ads, Trump said he also plans to cut 41% of funds for the in-person community outreach and ACA sign-up “navigator” programs.
Currently, the assistance programs don’t have any funding; they ran out of grant money on September 1 [19]. Some local staff are being laid off at a time when they would otherwise be ramping up to prepare for the upcoming enrollment period. It’s unclear if Trump will continue to neglect this issue until September 30, the end of the fiscal year, although it’s not uncommon for grant letters to be sent out late.
Administration officials cited inefficient use of resources to justify their decision and noted 5% fewer people than expected signed up for Obamacare in January despite having spent more money. They failed to mention Trump pulled ACA advertising then, too—ads that were already paid for [20].
Advertisement and outreach funding are important because the highest rate of sign-ups occur right before the enrollment deadline [21].
Although sicker individuals are generally more vigilant about not missing the sign-up window—which Trump has shortened from 90 days to just 45 days this year (November 1 to December 15, 2017)—an estimated 40% of uninsured Americans are unaware of the Marketplace and its open enrollment dates [18].
Essentially, the fewer healthy people who sign up, the more Marketplace premiums will increase for everybody.
Some Insurers Retreat From the Marketplace While Others Enter and Expand
The deadline for insurers to file rates for their 2018 health plans was September 5, with any clarifications to be submitted by September 20 [22]. Insurers must decide whether to stay in the 2018 Marketplace by September 27 when their final signed agreements are due.
Despite significant turnover of insurer participation in the Marketplace [23]—in large part due to uncertainty of financial risks introduced by Trump [24]—by late August, no counties were left with zero insurers after Washington, Nevada, Missouri, Wisconsin, Indiana, Ohio, and Tennessee recruited at least one insurer to fill the remaining empty service regions for 2018 [25].
However, this preliminary information on insurer coverage by county is subject to change and is updated on a weekly basis [26,27].
Whether or not all counties are covered in 2018, there is still a large potential problem: almost 1,500 (47%) counties in the U.S. involving 2.7 million (29%) Marketplace participants are at risk of falling through the cracks due to having only one carrier at the moment.
(Case in point: While writing this post, Optima Health decided to scale back its participation in Virginia’s state markets leaving 63 of 95 counties that serve over 70,000 people now at risk of having no insurer for 2018.)
Maintaining Perspective on Obamacare
It’s important to note most of the health insurance landscape in America is stable [28].
Costs to families who purchase health insurance through their employer (156 million people) and costs incurred per enrollee in Medicare (55 million people), Medicaid, and Children’s Health Insurance Program (74 million people) increased by 1-4% over last year.
The non-group insurance market, which includes the ACA Marketplace and individuals who purchase health plans directly from insurers, covers 17.5 million Americans.
Of that subset of people, 10.3 million (~60% of the non-group market) get their insurance through Obamacare [29].
Of the people on Obamacare, 8.7 million (~84%) receive federal subsidies to lower the cost of their premiums. The amount of subsidies provided is tied to the cost of mid-tier plans on the Marketplace. As the cost of premiums grow, government subsidies do too—which is why if Trump doesn’t pay CSRs to insurers, his sabotage efforts could cost the government approximately $200 billion more over the next 10 years [30].
Unfortunately, the people who would suffer the brunt of premium spikes next year are the 6.7 million individuals who purchase their insurance outside the Marketplace Exchange (5.1 million people) or who don’t qualify for subsidies through Obamacare (1.6 million people) because their incomes are just above the cutoff to receive financial assistance—i.e., the middle class.
This group that is most at risk of large premium increases comprises only 3% of all insured Americans [31], but that’s still a lot of people.
Still, had Obamacare never existed, the likely cost of premiums for comparable mid-tier plans would have been 30-50% higher on average than they are now [32].
REFERENCES
1. Kaiser Family Foundation Health Reform (April 25, 2013). Summary of the Affordable Care Act. Retrieved from KFF.org on September 6, 2017.
2. Parlapiano, A., Andrews, W., Lee, J., and Shorey, R. (Updated July 28, 2017). How Each Senator Voted on Obamacare Repeal Proposals. Retrieved from NYTimes.com on September 6, 2017.
3. Hamel, L., Wu, B., Muñana, C., and Brodie, M. (August 24, 2017). Data Note: Strongly Held Views on the ACA. Retrieved from KFF.org on September 6, 2017.
4. Cox, C. and Levitt, L. (August 4, 2017). What’s the Near-Term Outlook for the Affordable Care Act? Retrieved from KFF.org on September 6, 2017.
5. Hiltzik, M. (January 4, 2017). Republicans call Obamacare a ‘failure.’ These 7 charts show they couldn’t be more wrong. Retrieved from LATimes.com on September 6, 2017.
6. Kamal, R. and Cox, C. (May 19, 2017). U.S. health system is performing better, though still lagging behind other countries. Retrieved from Kaiser Family Foundation HealthSystemTracker.org on September 6, 2017.
7. Norris, L. (May 17, 2017). 10 ways the GOP sabotaged Obamacare. Retrieved from HealthInsurance.org on September 6, 2017.
8. Center on Budget and Policy Priorities (Updated August 31, 2017). Sabotage Watch: Tracking Efforts to Undermine the ACA. Retrieved from CBPP.org on September 6, 2017.
9. Families USA Foundation (Updated September 2017). Affordable Care Act Attack Tracker. Retrieved from FamiliesUSA.org on September 6, 2017.
10. Cunningham, P. (August 30, 2017). The Health 202: Trump says Obamacare will implode. But his administration isn’t necessarily hurting it. Retrieved from WashingtonPost.com on September 6, 2017.
11. Committee for a Responsible Federal Budget. (2017, August 29). The ACA’s Cost-Sharing Reductions (CSRs): A Primer. Retrieved from CRFB.org on September 6, 2017.
12. Robertson, L. (August 2, 2017). Subsidies, Not Bailouts. Retrieved from FactCheck.org on September 7, 2017.
13. Pear, R. and Kaplan, T. (August 15, 2017). Trump Threat to Obamacare Would Send Premiums and Deficits Higher. Retrieved from NYTimes.com on September 6, 2017.
14. Pear, R. (August 30, 2017). Trump Administration Wants to Stabilize Health Markets but Won’t Say How. Retrieved from NYTimes.com on September 6, 2017.
15. Coombs, B. (August 10, 2017). Uncertainty over Trump’s health-care policies driving double-digit insurance price hikes. Retrieved from CNBC.com on September 6, 2017.
16. Sanger-Katz, M. (August 10, 2017). Obamacare Premiums Are Set to Rise. Thank Policy Uncertainty. Retrieved from NYTimes.com on September 6, 2017.
17. Smyth, J. and Anderson, J. (August 31, 2017). Governors urge keeping US health law’s individual mandate. Retrieved from ABCnews.com on September 6, 2017.
18. Kliff, S. (September 5, 2017). This is what Obamacare sabotage looks like. Retrieved from Vox.com on September 9, 2017.
19. Kliff, S. (September 8, 2017). This is the most brazen act of Obamacare sabotage yet. Trump has quietly stopped funding Obamacare’s outreach budget. Retrieved from Vox.com on September 9, 2017.
20. Demko, P. (January 26, 2017). Trump White House abruptly halts Obamacare ads. Retrieved from Politico.com on September 9, 2017.
21. Pollitz, K., Tolbert, J., and Semanskee, A. (June 8, 2016). 2016 Survey of Health Insurance Marketplace Assister Programs and Brokers. Section 2: In-Person Assistance During Open enrollment. Retrieved from KFF.org on September 9, 2017.
22. Hellmann, J. (August 11, 2017). ObamaCare deadline for insurers delayed by three weeks. Retrieved from TheHill.com on September 7, 2017.
23. Norris, L. (August 25, 2017). ‘Bare counties’ just got covered. Here’s why. Retrieved from HealthInsurance.org on September 7, 2017.
24. Alonso-Zaldivar, R. (August 10, 2017). Study says Trump moves trigger health premium jumps for 2018. Retrieved from APnews.com on September 7, 2017.
25. Bump, P. (August 24, 2017). An anti-Obamacare argument evaporates: No counties now lack exchange insurers. Retrieved from WashingtonPost.com on September 7, 2017.
26. Kaiser Family Foundation Health Reform (August 18, updated September 6, 2017). Counties at Risk of Having No Insurer on the Marketplace (Exchange) in 2018. Retrieved from KFF.org on September 7, 2017.
27. Centers for Medicare & Medicaid Services, Center for Consumer Information & Oversight (Updated September 6, 2017). 2018 Projected Health Insurance Exchange Coverage Maps. Retrieved from CMS.gov on September 7, 2017.
28. Altman, D. (August 31, 2017). How to keep ACA stabilization narrow. Retrieved from Axios.com (via KFF.org) on September 9, 2017.
29. Altman, D. (August 10, 2017). The ACA stability “crisis” in perspective. Retrieved from Axios.com (via KFF.org) on September 9, 2017.
30. Kliff, S. (August 15, 2017). CBO says Trump’s Obamacare sabotage would cost $194 billion, drive up premiums 20%. Retrieved from Vox.com on September 10, 2017.
31. Griggs, T., Yourish, K., and Sanger-Katz, M. (March 9, 2017). How Many People Are Affected by Obamacare Premium Increases? (Hint, It’s Fewer Than You Think). Retrieved from NYTimes.com on September 9, 2017.
32. Adler, L. and Ginsburg, P. (July 21, 2016). Obamacare Premiums Are Lower Than You Think. Retrieved from HealthAffairs.org on September 9, 2017.
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