Since the Affordable Care Act was signed into law by President Barack Obama in March 2010, Republicans have made its repeal a central piece of their party platform. Since gaining full control of the White House, the Senate and the House of Representatives, various Republicans have made multiple attempts at repeal, falling just a few Senate votes short each time.
But that hasn’t stopped President Donald Trump from utilizing the full capabilities of the executive branch to dismantle the program and undermine its effectiveness. His administration has cut the open enrollment period for the individual marketplace in half (and during said period shuts down the healthcare.gov website for 12 hours every Sunday), indicated the IRS will not enforce the individual mandate penalty for people eligible to enroll in the marketplace, drastically cut funding for navigator groups helping people enroll and declined to guarantee cost-sharing reduction payments to insurance companies, among other things.
The effect of all this is particularly notable in Michigan, a state that has enjoyed relative success in health insurance coverage under the ACA. From 2009 to 2011, the uninsured rate in Michigan among those under 65 (those not covered by Medicare) was 14.6 percent.
Part of this drop was due to the expansion of Medicaid — the government’s health insurance program for some of the nation’s poorest, targeted mainly at children and parents — to make more people eligible to enroll. The ACA initially required every state complete its own Medicaid expansion, but when that was ruled unconstitutional by the Supreme Court, each state had to decide for itself. Michigan was one of a handful of completely Republican-controlled states that opted in.
Public Health professor Peter Jacobson explained the expansion of Medicaid was economically efficient because it reduces the number of emergency medical procedures necessary.
“The goal of expanding Medicaid to a population with a higher percentage of income for eligibility was because these are the people who are getting their care at emergency departments, which is the most expensive way to provide health care,” he said. “By expanding Medicaid to more people, it reduces the overall cost of providing health care, first, and second, it provides insurance so that people can get the health care they need.”
Another major part of the statistical drop in the uninsured was driven by the ACA’s regulation and facilitation of enrollment in the individual insurance marketplace for people not on Medicare, Medicaid or employer-provided insurance. The ACA increased incentives for enrollment by prohibiting insurers from denying coverage for pre-existing conditions and requiring every plan cover certain “essential health benefits,” and also increased disincentives for non-enrollment via the individual mandate, which places a tax on eligible individuals who do not enroll.
Individual Marketplace Enrollment
One of the most significant actions the Trump administration is taking to roll back Obama-era enrollment in the individual marketplace is slashing funding to navigator groups — nonprofits that assist individuals in finding and enrolling in individual market plans. Enroll Michigan, one of the largest such groups in the state, just saw its funding cut 90 percent for 2018. In an interview with The Daily Beast, Enroll Michigan Director Dizzy Warren said she wasn’t certain what the organization’s capabilities would now be.
“It’s a true and major disservice to Michigan consumers,” Warren said. “To the best of our ability, we will be there. With that kind of reduction, there’s no way I can say we will definitely be there.”
Any resulting reduction in enrollment could be dangerous for the stability of the market, Jacobson said, as it could upset the balance of healthy and sick people enrolled.
“Basically the idea behind the insurance exchange is you have a mix of healthy and sicker patients. Ideally, you would have a lot of millennials signing up — you’re basically healthy, you don’t use a lot of health care and those premiums can offset the costs of older, sicker patients,” he said. “When you have fewer young people enrolling, it destabilizes the market because insurers now have to raise premiums on people who are sicker. That’s the so-called death spiral, because the insurers have left the market filled with a bunch of sick people, and you can’t raise rates high enough.”
According to Megan Foster Friedman, a health care policy analyst for the University-based Center for Healthcare Research and Transformation, young and healthy people are exactly who will be affected most by the reduction in navigator funding.
“Health insurance is complicated,” she said. “And I think folks who are relatively healthy, folks that are young and haven’t had a whole lot of experience signing up for coverage, they need that extra bit of assistance to really understand why they need health insurance, and what’s out there for them.”
Additionally, Foster Friedman said the effect of a much shorter enrollment period, which many people are not aware of, could be devastating.
“We’ve seen data from previous open enrollment periods that has shown that a lot of people wait until the very last minute to sign up for coverage,” she said. “And we’ve seen that people who wait until the very last minute, by and large, they’re young, they’re healthy, they’re the exact people that you need in that pool. Without funding for navigators and advertising, are all of these young and healthy people going to know that they have half the amount of time this year to sign up for coverage than they have before?”
Engineering sophomore Lincoln Merrill, Press Correspondent for the University’s chapter of College Republicans, said keeping people off of Obamacare would help them in the long run.
“I think the administration’s response is an attempt to wean more people off of Obamacare by not pushing new people to enroll in the massively flawed program,” he said. “They are doing the best they can with what they were left from the previous administration and are trying their best to overhaul the program as soon as possible. President Trump hinted this morning that major changes are on the way soon, and hopefully any new plan will improve on all of Obamacare’s faults.”
In an email to the Daily, Public Policy senior Rowan Conybeare, the College Democrats’ chairwoman, said Republicans’ insistence on repealing Obamacare was about personal disdain for President Obama rather than specific policy.
“These efforts only provide further evidence that Republicans have prioritized undermining the Obama-era policy over the actual health and well-being of their constituents,” she wrote.
Though there hasn’t yet been any similar administrative assault on Medicaid expansion, it’s still unclear whether there will be. Though none passed, all the proposals to repeal the ACA have ended Medicaid expansion, threatening those who enrolled under it, and have dramatically reduced federal funding for Medicaid overall.
John Ayanian, a professor of medicine and director of the Institute for Healthcare Policy and Innovation, leads a team of 15 University faculty and researchers, collaborating with Michigan’s Department of Health and Human Services to collect and analyze data on the Healthy Michigan plan — Michigan’s form of Medicaid expansion. Some of the actions of the Trump administration, he said, could be interpreted as interfering with Medicaid expansion.
“The state of Oklahoma, which has not expanded Medicaid, submitted a waiver application to redesign their health care system in a way that might have extended coverage to more low-income enrollees in the Medicaid income range, but the Trump administration did not reach a decision in time for the state to move forward, and so they withdrew that application,” he said. “I don’t think we’ve seen any overt effects on Medicaid expansion yet, but there may be some steps in delaying requests for state flexibility around Medicaid programs that could interfere with the expansion.”
Foster Friedman, however, sees an opposite trend: Leading figures in the Department of Health and Human Services and the Centers for Medicare and Medicaid Services are allowing greater flexibility around Medicaid in a way that will reduce the program’s effect.
“Those new leaders are signaling a willingness to allow for greater state flexibility in how they operate their Medicaid programs,” she said. “And what that could mean is things like allowing states to impose work requirements for Medicaid, or allowing states to make some changes to the way they’re running their Medicaid program.”
Flight of Insurance Companies
The Health Alliance Plan, an insurance provider in Michigan, announced in September it would be leaving the state’s individual marketplace at the end of the year, forcing about 9,100 Michiganders to find new insurance or go without.
In a statement, HAP President and CEO Terri Kline attributed the decision to uncertainties in the market.
“Market volatility and uncertainties have made it difficult for insurers to effectively plan for and provide affordable individual health plans,” Kline said. “We believe our decision is in the best interest of all of our members. As a nonprofit health plan with the mission of enhancing the health and well-being of the lives we touch, we need to be responsible with our members’ health care dollars.”
One such uncertainty is the Trump administration’s equivocation on whether it will enforce the individual mandate. Another more pressing uncertainty is the administration’s refusal to guarantee cost-sharing reduction payments to insurers.
Cost-sharing reductions are a form of subsidy for people enrolled in individual market plans that earn an income below 250 percent of the federal poverty line to cover deductibles and copays. Insurance companies pay them for their enrollees, and then the federal government reimburses them at the end of each month. But while insurers are required to keep paying them until their contracts end at the end of the year, they don’t know if the government will hold up their end of the bargain.
In 2014, House Republicans under then-Speaker John Boehner filed a lawsuit saying cost-sharing reduction payments were unconstitutional because the ACA did not include an explicit appropriation granting the Treasury authority to make the payments. A federal judge ruled in the Republicans’ favor, but the Obama administration immediately appealed, and the judge put a stay on the order pending appeal — meaning payments would have to be stopped, but only once the stay was up.
Charles Gaba, founder of ACASignups.net — a website that tracks and analyzes health care data — said Republicans expected the impending halt of CSR payments to be the Democrats’ problem.
“The Republicans were thrilled about this at first, because they figured, ‘Aha, Hillary Clinton will be president and it’ll be dumped in her lap, and she’ll have to take the heat over it,’ ” Gaba said. “The problem is that’s not what happened.”
House Republicans since then have consistently requested the judge extend the stay every time it’s about to expire — most recently in August.
Much of the uncertainty, Gaba said, has come directly from President Trump’s Twitter account.
“He starts tweeting out, ‘Obamacare’s a disaster, it’s exploding, I’m going to let it explode,’ he says,” Gaba said. “He’s openly admitting that he’s going to sabotage and undermine the ACA, and he at a couple points actually says, ‘I’m going to stop these bailouts.’ He’s talking about the (cost sharing reduction) payments — these are not bailouts, but that’s what he calls them.”
While some companies like HAP have responded by simply exiting the marketplace, most others are instead raising their premiums steeply. Across the statewide individual marketplace this year, the average premium increase insurance companies proposed was 27.6 percent, nearly 17 percent last year.
The most frustrating part, Gaba said, is that all the uncertainty is due to a technicality.
“In order to solve this particular problem, it would take about five minutes,” he said. “All Congress would have to do — it’s like one paragraph, 87 words. It’s a one-paragraph fill that basically says, ‘The Treasury Secretary is hereby authorized to appropriate such and such funds to cover cost sharing under section whatever of the Affordable Care Act.’ That’s all it needs. But they won’t do it.”