Last Friday, Speaker of the House Paul Ryan pulled the American Health Care Act (AHCA) from the floor, sparing his members a recorded vote on a flawed bill, and sparing the country the consequences of advancing a proposal that would have resulted in the loss of health insurance coverage for 24 million Americans.
It was reported this week that Ryan, the Freedom Caucus and the White House held closed-door conversations about how and whether they will take another run at the thorny problem of health reform. Given the challenges of finding a middle path that will satisfy ultraconservatives and moderates and win the approval of the Senate, this seems a nearly impossible task.To paraphrase the President, “health care is complicated.”
Whether or not Congress comes up with a new proposal, the future of the Affordable Care Act (ACA) is still an open question. The President has said again and again that the ACA will ultimately “explode.” While there is no evidence that this will happen, there are certainly steps the administration can take that will make that prospect more (or less) likely:
Cost sharing reductions and the impact on the market – In 2014, Congress filed a lawsuit, House of Representatives v. Price (originally, House v. Burwell), challenging the Obama administration’s payments to insurers to support cost sharing reductions (CSR) that were created by the ACA. The plaintiffs argued that the funds to support the program were never appropriated by Congress. CSR helps to make insurance more affordable by reducing out-of-pocket costs for those who earn under 250 percent of the Federal Poverty Level who receive an ACA premium subsidy through a health insurance exchange.
Without a Congressional appropriation, insurers are responsible for bearing the cost of CSR, a total estimated expense to insurers participating in exchanges of $130 billion over 10 years. If required to bear this burden, insurers likely would either stop participating in exchanges or raise health insurance premiums to cover their costs. Either choice would undermine the stability of the exchanges.
The lower court judge in the CSR lawsuit ruled in Congress’s favor, but allowed CSR payments to insurers to continue pending the outcome of an appeal. The appeal is pending before the federal Circuit Court in Washington D.C. Unknown at this point, is whether the Trump Administration will defend the lawsuit; typically it would be the job of the administration to defend a suit against an executive agency – in this case, the U.S. Department of Health and Human Services. Some beneficiaries of CSR have filed a motion to intervene in the suit so that they can defend the payment structure in the event the Trump Administration does not. The intervenors’ motion was filed in December.The bottom line: If the plaintiffs lose, Congress will take action to eliminate CSR altogether, harming millions of lower-income exchange enrollees. Meanwhile, insurance companies will pass on the cost of CSR to their customers, raising the cost of insurance in the individual market, or insurance companies will withdraw from the exchanges in which they participate.
Failure to enforce the individual mandate will increase costs — The very first executive order signed by President Trump included broad language ordering federal agencies to “ease the regulatory burdens” of the ACA. There have been questions since regarding what this means, but what is clear is that the IRS is relaxing enforcement of the individual mandate. The mandate is an essential component of the ACA, and while the penalties have been criticized as being too low to bring people in to the insurance market, relaxation of their enforcement is likely to undermine participation in insurance.Sicker people will participate in insurance because they need care, and younger healthier people will be even more likely to stay out of the market.This kind of adverse selection drives up health insurance costs and is unsustainable over time.
Regulatory changes that limit exchange enrollment — The first set of ACA regulatory changes, proposed after meetings with the nation’s insurance companies, has already gone through a 30-day comment period. Among other things, the proposed changes would shorten the open enrollment period to six weeks and make it harder for people to qualify for special enrollment periods. What effect will this have? A shortened open enrollment period may well pose particular problems in Colorado where IT and customer service infrastructure may not be able to keep up with significantly increased workloads occasioned by a compressed timeframe. In addition, requiring 100 percent of people claiming eligibility for a Special Enrollment Period to prove rather than certify their eligibility, will make it more difficult for them to apply for and enroll in insurance.
SEP’s are available when personal circumstances change — for example, upon the loss or change of a job or as a result of a change in family circumstance such as divorce, marriage, birth or adoption of a child. What we know about application processes is that the more burdensome they are the less likely people are to complete them. Insurance companies claim people are falsely claiming eligibility under SEPs; the evidence does not support that claim. And, according to the Urban Institute, only about 15 percent of people eligible for an SEP enroll in insurance outside of open enrollment periods. We should be making it easier, not harder, for people to enroll.
So, what can we do? Here are a few ideas:
Don’t let Congress or the White House destabilize insurance markets — We need to let our Congressional delegation know that we should build on the ACA, not tear it down and, while we acknowledge the ACA needs work, its structure is sound. The CSR lawsuit, proposed regulations and the failure to enforce the individual mandate hurt all of us by destabilizing the insurance market and increasing premium costs.
Ensure Colorado takes advantage of state flexibility to strengthen the marketplace — We should oppose regulatory changes that undermine the insurance market and use whatever flexibility the state may have when new regulations are approved, to keep our marketplace strong. For example, if the open-enrollment period is limited to just six weeks, we should explore whether Colorado may seek a waiver to extend that period if we are unable to manage a high volume of enrollments within such a short timeframe.
Fix the “family glitch” — The so-called family glitch prevents family members of people with employer sponsored health insurance from being eligible for premium assistance for individual coverage on the exchange. Allowing family members to be eligible for the exchange would bring more people into coverage and increase the number of young and healthy people in Connect for Health Colorado and other exchanges.The family glitch has been a known problem since before the ACA was implemented.It continues to keep people out of coverage.We should fix it.
-By Elisabeth Arenales