ACA: Five tactics could lead to implosion


With legislative efforts to repeal and/or replace the Affordable Care Act shelved for now, President Trump has tweeted that he wants to “let ObamaCare implode, then deal.” But just what can – and is – his administration doing to foster an implosion? Policy experts help us count the ways:

1. Lax enforcement of the individual mandate

Shortly after he took office, President Trump issued an executive order aimed at “minimizing the economic burden” of the ACA. The order directed all federal agencies to take legal steps to waive, defer, grant exemptions from, or delay the implementation of any ACA provision or requirement that would impose a fiscal burden on states, patients, providers, or health insurers.

As a result, the Internal Revenue Service announced that it would not reject tax returns that do not indicate whether the taxpayer has health insurance. That question is included to determine whether taxpayers will incur a financial penalty under the individual mandate.

Dr. Howard Forman

As passed, the ACA’s individual mandate was not that strong to begin with, said Howard P. Forman, MD, professor of diagnostic radiology, health policy, and economics and management at Yale University in New Haven, Conn.

“What the Trump administration has done has weakened it even further by effectively saying that they will not enforce the mandate if anyone challenges it,” said Dr. Forman, a practicing radiologist and operational chief for radiology at Yale New Haven Hospital. “So if an individual claims that they shouldn’t have to face the mandate for religious reasons or other objections, that they would be allowed out. By encouraging that, you’re basically weakening the mandate even more, [which] hurts the exchanges and ultimately drives up prices.”

2. Little advertising, outreach

The Trump administration canceled advertising and outreach efforts in the final week of the 2017 open enrollment period. As many as half a million people missed out on enrolling in a health insurance plan as a result, Joshua Peck, former chief marketing officer for healthcare.gov, estimated in a recent blog post.

In the past, the federal government has played a significant role in informing the public about marketplace coverage, their rights and responsibilities under the ACA, and the process of enrollment, said Sarah Lueck, a senior policy analyst for the Center on Budget and Policy Priorities, a nonpartisan research and policy institute. The last week of enrollment is known as a critical time to enroll patients, she said. In 2016 for example, about 700,000 people enrolled during the final week. It’s often the healthiest patients who wait until the last minute, Ms. Lueck added.

Sarah Lueck, a senior policy analyst for the Center on Budget and Policy Priorities

Sarah Lueck

“One way you discourage healthy people from enrolling is by pulling back on advertising at the very moment they may be paying attention,” she said in an interview. “It sends a bad signal. Now as the next enrollment period is about to come up in November, it raises a concern about – what are the plans for outreach?”

Without sufficient promotion, the number of patients who learn about the ACA and enroll could drop off, and the percentage of sicker enrollees in the marketplace could rise, according to analysts. The Trump administration has not said whether it plans to advertise or promote enrollment during the upcoming November enrollment period. The Centers for Medicare & Medicaid Services recently shortened open enrollment from the previous 3 months to 45 days.

In a final rule issued in April, the CMS stated the change will “improve individual market risk pools by reducing opportunities for adverse selection ... and will encourage healthier individuals who might have previously enrolled in partial year coverage after December 15th to instead enroll in coverage for the full year.”

3. Highlight what’s “wrong” with the ACA

In addition to pulling positive advertisements about ACA, the Trump administration has also launched a campaign that criticizes the law.

Since January, the Department of Health & Human Services has published more than 20 videos featuring stories about how the ACA has harmed patients. The HHS has also used its Twitter account to advocate repeal and replacement of the ACA. Sen. Ron Wyden (D-Ore.), ranking member of the Finance Committee, and other legislators have raised concerns that the HHS is misusing federal resources to advance partisan legislation by funding the messages.

“It’s not just pulling advertisements and going dark and not telling people [information], but it’s also putting things out there that talk about people who don’t like the law,” Ms. Lueck said. “It’s counterproductive propaganda if you’re coming from the perspective of wanting people to sign up for coverage. The agencies that have been very engaged in trying to get people through the process and covered, are now working in cross purposes with that.”

Ms. Lueck said that the federal government is also putting a negative spin on the current participation of marketplace insurers and the future of the exchanges. On Aug. 2, the CMS released a map on projected insurer participation in the ACA’s 2018 health insurance exchanges. The map shows that 19 counties are projected to have no insurers in 2018, meaning that patients in those counties could be without marketplace options.

“For 2018, at least 13,008 Americans currently enrolled for health coverage on the exchanges live in the counties projected to be without coverage in 2018,” according to the CMS announcement. “In addition to overall issuer participation, increasing rates have also been a concern for the health insurance exchanges. ... A number of insurers in several states requested rate increases of 30% or more. Consumers in the 39 healthcare.gov states have already seen their premiums increase more than 100% since 2013.”

Unmentioned however, is that the number of potential “bare counties” has dropped in half from about a month ago. A similar map by the Kaiser Family Foundation shows that in June, 44 counties were at risk of having no marketplace insurer in 2018, a number that fell to 17 counties as of Aug. 4, according to Kaiser’s most recent map.

Kristine Grow, senior vice president of communications for America’s Health Insurance Plans (AHIP), noted that based on CMS’ projections thus far, the overall percentage of enrollees without an insurer for 2018 is 0.15%.

Kristine Grow, senior vice president of communications for America’s Health Insurance Plans (AHIP)

Kristine Grow

“We’re talking pretty small numbers, that’s about 15,000 people out of 10 million or so who get their coverage through an exchange,” Ms. Grow said in an interview. “It’s important for those people to have options, so the health plans have been working very hard to try to get into those counties.”

4. Work for Medicaid recipients

Potential work requirements for Medicaid beneficiaries may harm the Medicaid expansions that were part of the ACA.

On March 14, the HHS sent a letter to 50 U.S. governors encouraging states to come up with innovative ideas for their Medicaid programs, including the possibility of work requirements. The letter included specific suggestions, such as introducing plans that include health savings account–like features, encouraging Medicaid patients to secure employer-provided insurance, and requiring small premiums or other contributions from patients to encourage personal responsibility. The letter noted that the HHS would be open to states proposing work requirements for some Medicaid recipients, an approach that has “produced proven results for Americans enrolled in other federal, state, and local programs.”

Four states – Arizona, Indiana, Kentucky, and Pennsylvania – have formally submitted waiver requests to the HHS that would require work as an eligibility condition. To date, none has been approved. Arkansas also recently announced that it would seek changes to its waiver, including a work requirement.

Imposing work requirements would hurt access to Medicaid for patients who need health assistance, but who cannot work, Dr. Forman said. Under the ACA, 31 states and the District of Columbia have expanded their Medicaid coverage to people previously uncovered. Dr. Forman stresses that the bulk of Medicaid funding is spent on elderly, disabled, and mentally ill patients.

5. Withhold cost sharing reduction payments

For months, President Trump has threatened to stop making cost saving reduction (CSR) payments to insurers in the marketplace, a move that analysts say would raise premiums and cause insurers to exit the marketplaces. Most recently, the President on July 29 tweeted, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!”

Under the ACA, the federal government provides CSR payments to insurers to offset the costs for providing discount plans to patients who earn up to 200% of the federal poverty level. Plans on the individual exchanges are required to cover a package of essential benefits with pricing limitations to ensure that out-of-pocket costs are low enough for poorer patients. Because insurers lose money on these plans, the ACA provides about $7 billion to insurers through CSR payments.

Republican members of the House of Representatives sued the HHS over the CSR payments under the Obama administration, claiming the funding was illegal because it was never appropriated by Congress. A court ruled in favor of the House in 2016, but an appeal filed by the Obama administration allowed the CSR payments to continue.

President Trump has not indicated whether he plans to drop the appeal or carry on the case. But if he fails to continue the suit, the move would immediately end the CSR payments.

“If the funding for the CSR benefits goes away, premiums will go up, taxpayer dollars will go up, and choices will go down,” Ms. Grow of AHIP said in an interview. “The benefits as we understand them are still required to be offered on the exchanges. In order to cover those benefits, the premiums for everybody in the individual market will have to go up, and they will go up by about 20%.”

While the federal government would save money by ending the CSR payments, it would face increased costs for tax credits that subsidize premiums for marketplace enrollees with incomes that are 100% to 400% of the poverty level, according to an analysis by the Kaiser Family Foundation.

Following President Trump’s most recent threat to stop the CSR payments, AHIP issued a joint statement with the American Academy of Family Physicians, the American Medical Association, and several others underscoring the importance of the payments.

“Cost-sharing reductions are used to help those who need it most – low- and moderate-income consumers,” the associations said in the Aug. 2 statement. “Without these funds, consumers’ access to care is jeopardized, their premiums will increase dramatically, and they will be left with even fewer coverage options ... As medical professionals, insurers providing health care services and coverage to hundreds of millions of Americans, and business leaders concerned with maintaining a stable health insurance marketplace for consumers, we believe it is imperative that the administration fund the cost-sharing reduction program.”

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