I think it’s safe to say that over the last few days we saw an unprecedented defeat for the party in power. Despite having majorities in both houses of Congress and the Presidency, they were unable to fulfill a promise seven years in the making – instead, as put by Bill Gardner, The ACA Won.
Did you ever think you would hear Paul Ryan say, “Obamacare is the law of the land”?
Today I mostly want to talk about next steps, but before that, I’ll take a little space to discuss how we got here. Books and dissertations will be written about what went on, and I’m sure Tina Fey is already working on the movie version starring Alec Baldwin – but in the meantime, here’s my review (if you’ve already overdosed on coverage, feel free to skip down to the what’s next section).
WHAT JUST HAPPENED?
First, it’s important to remember that the AHCA was not really a healthcare bill, it was a bill designed to cut Medicaid to pay for a huge tax cut. And in case you forgot, here’s who would have benefited from those tax cuts:
After the initial introduction of the bill, it was clear that there was not enough Republican support for passage. Changes started to be made to the bill, including to how the Essential Health Benefits (EHB) package portion of the law works. As a reminder of why the EHB is so important, know that when last left to the states, only 12 required maternity coverage & only 17 states required mental health coverage.
Within the Republican party, there was opposition to the bill from both the left and the right. The eventual defeat exemplifies that it’s hard to get someplace when you can’t agree on where you’re going. In fact, as discussed by Jonathan Chait “It became the repeal bill because nobody in the Republican Party had a better idea.”
This lack of a better idea resulted in a bill that before it was pulled had just a 17% approval rating in national polls.
Unsurprisingly, The President did not take any responsibility for the bill's defeat. You can read here about the 6 ways President Trump tried to spin his total defeat on health care. And in case you want even more, the NY Times takes a look at How the Health Care Vote Fell Apart, Step by Step.
WHAT HAPPENS NEXT?
The Setup
The question now is what will the administration do. In remarks after the bill's defeat, the President said: “I’ve been saying for the last year and a half that the best thing we can do politically speaking is let Obamacare explode, it is exploding now.”
It is not exploding (we’ll get to that in a minute) but there are problems, and there are actions the administration can take to make those problems worse.
From NY Times reporter Margot Sanger-Katz:
The President seems to assume that even though Republicans control Congress and he is President, they won’t be blamed for what happens next – a dubious assumption some would say.
Before continuing, let’s talk about that “explosion”. Simply put, it’s just not happening. There is no death spiral. The way the ACA was designed, most covered individuals are shielded from premium increases because the subsidies are based on the premiums, not on other factors. It can be argued that is not a good way to control costs, but it’s still the way the law is written, meaning even if premiums were to go up significantly again this year, most individuals on the exchange would not feel the impact.
Don’t just believe me, the CBO considers the current market stable and rating agency S&P also believes the markets are stable. The NY Times looked at the issue and summed it up this way: Obamacare Isn’t in a ‘Death Spiral.’ (Its Replacement Probably Won’t Be Either.)
Outstanding Issues
However, as I said, there are outstanding issues. Insurers are deciding right now if they will offer products on the marketplace in 2018. Insurers and the actuaries that work for them hate uncertainty. Two looming areas of uncertainty are the cost-sharing subsidy lawsuit and the status of the risk adjustment programs.
Those purchasing coverage on the marketplace earning less than 250% of FPL are eligible to receive cost-sharing subsidies. However, those funds need to be allocated by Congress. Over the past several years, when Congress failed to do so, the Obama Administration paid them out of other funds resulting in the House suing the President. If the current administration decides not to pay these subsidies, insurers would be on the hook for the payments, resulting in large losses (the losses are theoretical, if the insurers do not receive the payments, they would pull out of the market).
The ACA had three risk adjustment programs designed to smooth out the impact of one company getting stuck with more sick people than another. One of the programs (risk corridors) relied on funding being allocated - which it wasn't. Failure to receive these payments would also result in insurers leaving the market.
These two issues feed into another immediate area of concern – there are some markets with no or only one insurer.
Administrative Action (Sabotage)
In addition to the existing issues, there are actions the administration can take to make matters worse. They’ve already made some changes that on the face are not game-changers, but they raise concern over how the law will be implemented.
Starting with the one of most concern, enforcement of the individual mandate. The mandate is needed to keep the system in balance – while the mandate is part of the law, how rigorously it is enforced is subject to the actions of the administration, and they’ve already said they will be less strict.
HHS has also announced changes to the enrollment process – making the enrollment period shorter and making it harder to enroll during special enrollment periods.
During the last open-enrollment period, the Administration pulled advertising during the final week (after Trump’s inauguration) resulting in a perceptible blip in enrollments. Advertising and the use of navigators are essential to successful enrollment periods – both activities that the Administration controls through HHS.
Still on the table
It’s worth remembering that two ideas beloved by conservatives are still floating out there – Medicaid work requirements and block granting. Both would be harmful to those who rely on the program. You can find more information here:
- Why Medicaid Work Requirements Won’t Work
- Everything You Need To Know About Block Grants — The Heart Of GOP’s Medicaid Plans
Last night, Rep. Keith Ellison (Deputy Chairman of the Democratic National Committee) tweeted out: Don't gloat, get ready for round 2
Addressing the issues outlined above as well as fixing known problems is the next battle.
“No federal benefits program -- not Medicare, not Medicaid, not the marketplace -- can thrive without constant adjustment, from administrators and legislators. Since inception, the ACA marketplace has been denied such essential adjustment, and has in fact had to withstand outright sabotage from Republicans -- who threw up hurdles to the training of enrollment counselors, undercut funding for a crucial risk adjustment program, and refused to fix obvious flaws, such as the so-called "family glitch" that renders many whose employers offer family coverage they find unaffordable ineligible for marketplace subsidies.” Xpostfactoid
Solutions
Will there be an opportunity to ensure the ACA continues to work and perhaps even make it better? The only answer to that is the one provided by my totem, shruggie ¯\_(ツ)_/¯
But just because we don’t know if we will be successful, does not mean we shouldn’t try.
Among the topics of conversation should be the addition of a public option (to address markets without enough insurers) and the possibility of a Medicare buy-in for 55+ (to address high premium costs for seniors).
Another avenue is to try and find middle ground with moderate Republicans. While I still find a lot not to like about Cassidy-Collins, can it be a starting point for negotiations? This NY Times op-ed looks at the possibility: The Democrats’ Next Move on Health Care.
Before I go, one more link – this one to a piece in Harvard Business Review written by the President and Vice President of the Commonwealth Fund:
- First, we need to create balanced risk pools that include both healthy and less healthy persons in individual insurance markets.
- Second, we need to extend subsidies higher up the income scale than the ACA’s limit of 400% of the federal poverty level.
- Third, if we want private insurers to participate in ensuring that Americans have access to affordable insurance, the business of selling this product must be viable.
- Fourth, and perhaps most important, public and private stakeholders must accelerate efforts to control the costs of health care services, which are the primary determinants of the cost of health insurance in all markets, including employer-sponsored, individual, and public.
(bullets excerpted from above link)
To sum up, we won a victory with the defeat of the AHCA, but there are many battles ahead to preserve (and expand on) the successes of the ACA.
