The Affordable Care Act’s worst enemies are now in charge of the vast range of health coverage the law created. They’re also discussing changes that could affect a wider net of employment-based policies and Medicare coverage for seniors.
Although Republicans failed last month in their first attempt to repeal and replace the ACA, President Donald Trump vows the effort will continue. And even if Congress does nothing, Trump has suggested he might sit by and “let Obamacare explode.”
Health insurance for the 20 million who benefited from the ACA’s expanded coverage is especially at risk. But they’re not the only ones potentially affected. Here’s how what’s going on in Washington might touch you.
A 3-year-old lawsuit threatens many health plans
A suit by the Republican-led House challenges some of the subsidies that support private plans sold to individuals and families through the ACA’s online insurance marketplaces (also called exchanges). The lawsuit has already gained one court victory. By many accounts, it would wreck the market if successful, leaving up to 12 million people without coverage.
“It’s the single-biggest problem facing the exchanges,” said Rachel Sachs, a health law professor at Washington University in St. Louis. “That would make insurers not only exit tomorrow but also not want to offer plans in 2018.”
The litigation involves lesser-known ACA subsidies that reduce out-of-pocket costs such as co-payments and deductibles for lower-income consumers. These are different from the law’s income-linked tax credits, which help pay for premiums.
Filed in 2014, when Barack Obama was president, the lawsuit could backfire by politically harming the Republicans now in charge. House leaders requested and were granted a delay of the litigation for now, and said they won’t drop the lawsuit but will continue the subsidies while it gets considered. The administration has not said how it plans to handle the lawsuit.
Policy confusion undermines coverage
Even if Congress doesn’t repeal the ACA, the continuing battle is making insurance companies think twice about offering marketplace policies for next year. The less clarity insurance carriers have about subsidies and whether the administration will promote 2018 enrollment, the likelier they are to bail or jack up premiums on the policies they offer, to cover themselves.
Preserving the subsidies, which limit out-of-pocket costs for lower-income consumers, “is essential,” said Kevin Lewis, CEO of Community Health Options, a nonprofit Maine insurer.
“Markets don’t like uncertainty,” Lewis said. “The ‘sword of Damocles’ hanging over our collective heads is unsettling, to say the least.”
Democrats say Republicans are sabotaging Obamacare
Shortly after taking power, Trump officials yanked advertising designed to maximize enrollment in marketplace plans just before a Jan. 31 deadline. It was partly restored after an outcry.
Then the administration said it would scrap an Obama-era plan of rejecting tax returns from individuals who decline to say whether they had health insurance. Scrapping that plan weakens the requirement that everyone have health coverage.
Trump aide Kellyanne Conway suggested in January the administration might entirely stop enforcing that requirement — it’s the part of the law most hated by many Republicans. If officials persist with that message, health plans might attract even fewer of the young and healthy members whose insurance premiums are needed to support the ill. That would cause more hikes in premiums and exits by insurers.
“More mischief can be done,” said Dr. Peter Kongstvedt, a health industry consultant and senior faculty member at George Mason University. “It is absolutely possible that some markets will end up with no carriers unless a combination of state and federal government act to preserve the market” with taxpayer money.
Trump officials will move to roll back ACA coverage even if Congress doesn’t repeal
Tom Price, secretary of the Department of Health and Human Services, has signaled his intent to reverse parts of the ACA through regulation even if Congress doesn’t repeal the law.
For example, Price couldn’t unilaterally eliminate coverage for birth control or maternity care, both of which many Republicans object to on moral grounds or because of cost. But birth control might no longer be free as a preventive benefit. Maybe the administration would let states limit the number of prenatal visits in maternity coverage. Perhaps more employers could gain religious exemption from providing birth control.
Medicaid coverage for people with low incomes could shrink
Obamacare’s coverage expansion included government Medicaid coverage for folks with lower incomes. Thirty-one states and the District of Columbia expanded Medicaid to most adults who have incomes below about $16,000 for singles and $28,000 for a family of three (although eligibility varies).
Republicans want to reduce the growth of Medicaid spending and give more control over the program to states. Discussions about a Medicaid overhaul have focused on replacing ACA provisions with less-generous federal grants to states.
But even if the ACA survives, it’s likely the administration will give states more say in who gets Medicaid coverage and how much. Many Republicans favor having work requirements for Medicaid recipients and raising out-of-pocket payments for patients.
Under the failed House replacement bill, the American Health Care Act, 9 million people in those states would have lost Medicaid coverage in 2020, according to estimates from the nonpartisan Congressional Budget Office.
At the same time, however, Republican support for the ACA’s Medicaid expansion is growing, which might mean overall cutbacks would be less severe or Medicaid coverage could increase among the 19 states that didn’t expand the program under the ACA.
Some Republicans want to overhaul Medicare for seniors
House Speaker Paul Ryan wants to restrain Medicare growth by giving members fixed, “premium support” payments to buy plans; he’d also like to raise the age of eligibility for Medicare. Both those ideas could lead to less coverage or greater out-of-pocket expense.
But those proposals weren’t part of the Republicans’ replacement bill. Changing Medicare likely would trigger loud objections from AARP and other powerful lobbies. And Trump doesn’t seem inclined to back a change.
“I don’t think … Trump wants to meddle with Medicare or Social Security,” White House chief of staff Reince Priebus told the press in January.
Job-based coverage could become less generous
Although ditching Obamacare would end the requirement for large employers to offer health insurance, most companies would keep their plans as a way to attract workers, analysts say.
But that coverage could become less generous. The ACA limits the annual out-of-pocket costs for members of employer-based plans, and also prohibits caps on annual and lifetime benefits. The ACA also prohibits waiting periods for covering a new worker’s preexisting illness.
Any replacement law signed by Trump might not include those protections.