- The Trump administration is taking unilateral steps that could lead to the demise of the Affordable Care Act’s individual insurance markets. It comes as repeal efforts have failed at the legislative level repeatedly this year. Most studies show these exchanges have stabilized, but Trump’s actions
It will be months before the Republican Party can take another legislative whack at repealing and replacing the Affordable Care Act. But the Trump administration has continued to take steps to undermine the law.
President Donald Trump repeatedly asserted in the months before and after his election that Obamacare markets were collapsing on their own.
Most studies, however, have showed that the Obamacare exchanges were stabilizing – and that insurers participating in the market were seeing a turnaround. But the Trump administration’s recent moves, in the face of the failed repeal effort, could undermine these markets and make Trump’s prediction about their demise come to fruition.
The Department of Health and Human Services recently moved to significantly reduce the length of the Obamacare open enrollment period later this year. Instead of the typical three months for people to get insurance through the exchanges, there will only be a six-week open enrollment session in 2017 – cutting the time in half.
HHS also dramatically reduced the budget for Obamacare outreach programs that helped to drive enrollment for exchange plans. The department will spend $10 million on advertising for open enrollment, compared with $100 million last year. Additionally, the budget for navigators – groups that assist people in enrolling or reenrolling for exchange plans – plunged to $36 million from $62.5 million last year.
Vox’s Sarah Kliff also found that many of the navigator groups did not receive funding when the prior year’s money expired on September 1. Many groups went over a week with no funding and were forced to lay off employees as a result. Even when money did arrive, Kliff reported, some groups saw their grant amounts sliced by as much as 98%.
Even before the latest developments, the Trump administration yanked a significant portion of a $5 million ad buy for the end of open enrollment in January 2017. According to enrollment figures, a significant slowdown in enrollment ensued in the two weeks after the administration pulled the ads, though it is difficult to make a causal connection.
- Jim Young/Reuters
Even smaller moves, like scheduling significant maintenance for the Healthcare.gov platform during the shortened open enrollment period, suggests the Trump administration is trying to destabilize the marketplaces, experts say.
Together, the moves are likely to lead to lower enrollment, especially among younger and healthier people that are necessary to keep down costs in the marketplace, said Larry Levitt, senior vice president at the nonpartisan Kaiser Family Foundation.
“There’s little question that cutting back on outreach and advertising will result in more people uninsured,” Levitt told Business Insider. “Those who fail to sign up will be healthier than average, which will cause the risk pool to deteriorate and premiums to rise. This is not a signal that the administration is trying to make the law succeed.”
Cost-sharing reduction payments
The Trump administration has also continued to toy with the critical so-called cost-sharing reduction (CSR) payments, which help offset costs to insurers that offer plans with low out-of-pocket costs to poorer Americans.
The Trump administration has been doling out the payments on a month-to-month basis without providing a long-term plan. If Trump were to end the payments, insurers have said they would be forced to significantly increase their costs, though the degree to which this would destabilize the individual marketplace is a source of debate.
The payments are also the subject of a lawsuit between the House of Representatives and the executive branch. The Republican-controlled House sued the Obama administration, arguing that the CSRs bring funded by the executive branch was illegal.
A judge sided with the House in 2016, and the Obama administration appealed the ruling. Trump could drop the appeal or decide to end payments due to the lawsuit (though some states could step in to defend the case), adding another layer of uncertainty for insurers.
The combined concern over the future of CSR payments has already been cited by insurers as a reason for increased 2018 exchange premiums.
In the wake of the failed push on the Graham-Cassidy healthcare legislation in the Senate, Trump floated ideas for two new executive orders designed to go around Congress and allow him to act unilaterally.
One of the two orders Trump referenced would allow people in the individual market to group together and purchase group insurance. As BuzzFeed’s Paul McLeod laid out Friday, that process could cherry-pick healthy people out of the exchange market into these association plans, leaving a sicker pool of people on the exchanges.
Much like the impact of the open enrollment tweaks, more sick people would lead to higher costs and larger premium increases.
The administration has also made moves to try to prevent some states from attempting to stabilize the health law.
In Minnesota, the Republican-controlled legislature and Democratic governor both agreed to institute a new reinsurance program to help shore up their Obamacare markets. To do so, the state submitted a 1332 waiver, a request that if approved allows states to modify their exchanges to help reduce costs as long as it remains inside the law’s rules.
It was stymied by the Department of Health and Human Services and the Trump administration, Dayton charged in a heated letter late last month.
“Unfortunately, Minnesota’s experience with its 1332 Waiver application has been the opposite; it has been nightmarish,” Dayton wrote in the letter on September 20. “Despite repeated verbal assurances that our waiver application would be approved in August, and even though the deadline for 2018 rate-setting is fast approaching, we have still not received the formal approval upon which our entire state reinsurance program, at the insistence of CMS, depends.”
Oklahoma went as far as to pull their waiver request due to what they said was interference from the administration. A letter from Oklahoma Secretary of Health and Human Services Terry Cline cited a “federal department promise” that the waiver was going to be approved on September 25 – but ultimately was not.
“While we appreciate the work of your staff, the lack of timely waiver approval will prevent thousands of Oklahomans from realizing the benefits of significantly lower insurance premiums in 2018,” wrote Terry Cline, the Oklahoma health secretary.
And a similar issue popped up in Iowa, where the Republican-led government’s waiver request was denied, according to The Washington Post, even though it contained many reforms the GOP favored in its legislative push. The Post reported that Trump himself told HHS to deny the waiver.