In the wake of the surprise defeat of the Senate’s effort to repeal and replace the Affordable Care Act (ACA), President Trump tweeted: “As I said from the beginning, let ObamaCare implode, then deal. Watch!” The Trump administration does in fact have considerable ability to undermine and even “implode” the ACA’s insurance marketplaces, independent of Congress. Secretary Price has observed that the ACA says the words the “Secretary shall” or the “Secretary may” 1,442 times. With each mention, Congress delegated responsibility to the executive branch to interpret and implement key provisions of the law. The administration also has a fair amount of discretion to decide whether and how to enforce the law’s requirements on insurers, businesses, and consumers.
The executive branch has already begun to roll back or relax key ACA requirements, but more changes are likely to come. Some, such as the future of cost-sharing reduction payments and enforcement of the individual mandate, have been widely discussed, and many insurers are proposing double digit premium rate increases for 2018 as a result. Some insurers have even said that the I.R.S.’ failure to enforce the individual mandate is, in their view, tantamount to a repeal in terms of its incentive for healthy people to sign up for coverage.
The administration has also acted to depress consumer enrollment and sow confusion over the law’s future, by cutting advertising for the marketplaces during the last enrollment period and even re-purposing appropriated ACA funds to support anti-ACA messaging on the Department of Health & Human Services’ (HHS) website. More recently, HHS cancelled the contracts for two companies that had worked in 18 cities to conduct outreach and provide enrollment assistance to the uninsured.
Other potential administrative actions may receive less attention but are no less of a threat to the future stability of the ACA’s marketplace and affordability of coverage for consumers. These include (but are not limited to):
Encouraging “bare” counties. By actively calling for the law to implode, the Trump administration is sending a signal to insurers that it can’t be relied upon as a marketplace partner. For better or for worse, the ACA delivers a public entitlement – tax subsidies for health insurance – through the voluntary participation of private companies. Nothing compels these companies to offer plans through the marketplace. Yes, insurers can raise premiums if they know in advance that subsidies will be cut or the mandate won’t be aggressively enforced. But when premium rates have to be submitted months before plans are sold, mid-stream policy or operational changes by the government can have a detrimental impact on profitability. The current uncertainty about how this administration will operate the marketplaces is causing many insurers to question whether they can continue to participate.
To be sure, some major insurers pulled out of the marketplaces in 2016, while President Obama was in office. But the former head of the federal health insurance marketplace, Kevin Counihan, “called an insurance C.E.O every day…just to check in” and encourage them to maintain or expand their participation. He and other HHS officials did so in order to make sure that consumers in every county had coverage. There is no evidence that anyone under Secretary Price’s HHS is doing the same, even though 38 U.S. counties are at risk of having no insurer next year.
Hobbling Marketplace operations. Many ACA watchers still shudder when they think back on the disastrous rollout of healthcare.gov in 2013. The website was essentially non-functional, turning the marketplace enrollment experience into a nightmare for hundreds of thousands of consumers. The Obama administration was eventually able to turn that around, and each year the website shopping and enrollment experience improved. But managing the complicated IT infrastructure involved is no small task, and requires continued maintenance, testing, and upgrades. Without that care and feeding, consumers who visit the site this November could once again encounter a slow and balky website and long waits for personal assistance from call centers and navigators due to lack of funding. This, in turn, could lead to a smaller and sicker risk pool for insurers because those with greater health care needs are more likely to endure a poor customer experience in order to get coverage.
Weakening coverage standards. The ACA’s essential health benefits (EHB) have been in the cross-hairs of ACA opponents, many of whom argue that the minimum benefit standard makes coverage too expensive (although estimates suggest they add only pennies to the premium dollar). Only Congress can remove one of the ten benefit categories prescribed by the ACA, but HHS is charged with periodically “updating” the benefit standards, and the agency could grant insurers considerably more flexibility over what items and services they cover within each benefit category. Although diluting coverage for services could lead to lower premiums, consumers who need those services will face fewer plan options and higher out-of-pocket costs.
Weakening what “counts” as coverage. The ACA requires people to maintain “minimum essential coverage” or MEC or pay a tax penalty. This is commonly called the individual mandate. While the ACA lists certain types of coverage that meet the MEC standard, such as Medicare, employer-based plans, and Medicaid, it grants HHS considerable flexibility to determine what counts as MEC. Under Obama-era rules, it had to be coverage that complies with “substantially all” of the ACA’s consumer protections. But HHS could relax that standard, for example by including short-term policies that can screen out people with pre-existing conditions and do not have to cover EHB. These plans would then become more attractive to healthy people, and they could charge significantly lower premiums than ACA-compliant plans. This would, in turn, given insurers an incentive to stop offering ACA-compliant plans and leave consumers with pre-existing conditions or who need more comprehensive coverage with fewer options and significantly higher prices.
The above and other actions would weaken the ACA’s marketplaces by reducing enrollment, making the risk pool sicker, and rendering them a less attractive place for insurers to do business. At the same time, administrative actions are less likely to garner the same media furor and energy among ACA advocates than the congressional repeal efforts. But for those who wish to maintain the gains made under the law – 20 million newly insured and increased financial security for low- and moderate-income families – the looming regulatory efforts to roll back the ACA will require as much, if not more, resources and attention.