Without Repeal Trump Seeks to Accelerate ACA Decline By Nicky Riordan
Close on the heels of the latest major failure of Congressional Republicans to repeal the Affordable Care Act (ACA), the Trump Administration has taken significant steps in recent days to undermine and destabilize the current marketplace system. President Trump’s announcement last week that the federal government will end cost sharing payments to insurers as laid out in the ACA is the third damaging administrative blow to the law in recent months.
As I have previously discussed, the nearly nine-month battle to fix healthcare has already accelerated a disintegration of the individual marketplace and inspired potential premium hikes in some states for 2018, but these latest moves threaten the entire structure of the ACA moving forward.
Along with the uncertainty that Congress has brought to the healthcare debate, the effort began in earnest in August, when Health and Human Services (HHS) officials announced their decision to cut advertising for the ACA marketplace during open enrollment by $90 million. In addition, they announced plans to cut enrollment assistance in half for 2018. President Obama understood that outreach and enrollment assistance were key to the law’s success, and this move by HHS under the direction of Tom Price was an easy first step to undermine future enrollment, especially that of young and healthy consumers.
Now, as Congressional Republicans are finally opening up to the idea of a bipartisan fix to the ACA, President Trump signed an Executive Order on Thursday to encourage federal agencies to expand the access to and use of alternative health plans that can avoid ACA regulations such as the inclusion of the 10 essential health benefits. This means that less comprehensive, and therefore less expensive, plans could be attractive to the remaining ACA holdouts and healthier customers - leaving the current marketplace with fewer insurers and higher premiums. Experts with the Kaiser Family Foundation argue that this order may create a parallel insurance market and by proxy, turn the ACA marketplace into a high-risk pool by another name.
That same evening, Trump announced that the federal government will stop paying cost-sharing reduction payments to insurers that make the ACA subsidies possible. Nearly 57 percent of enrollees in the individual marketplace qualify for these subsidies, and without them, an annual cost burden of approximately $7 billion will be shifted to the insurance companies. These cost-sharing reduction payments were used as a bargaining chip under the Obama Administration to get insurance companies on board with the marketplaces, acknowledging that it would take time to bring down prices through healthier consumers entering the insurance pools. President Trump has been threatening to end these payments for months, but this decision will have long-ranging impacts beyond 2018, as insurance companies will increase premiums in order to make up the difference, by some estimates, up to 20 percent.
Many analysts see these moves as a signal to Republicans in Congress that if they cannot act to repeal the ACA as promised, President Trump will ensure that the law becomes untenable and force a solution. Trump has foreshadowed since his inauguration that the ACA will fail if action is not taken, but there are significant ways that he and his Administration can improve the system until a more permanent fix is made by Congress.
The actions made in recent months and weeks seem to be encouraging more of a self-fulfilling prophecy and they put pressure on a process that needs to slow down, not speed up at this crucial time. Considering the fact that a majority of Americans prefer an ACA fix to repeal at this point in time, it remains to be seen whether this strategy will play to Trump’s advantage or leave the blame for a marketplace collapse in his lap into 2018.
Nicky Riordan (@nriordan120), Political Analyst, Utica College Center of Public Affairs and Election Research