The Affordable Care Act, which has survived more attacks than perhaps any law in American history, has been hit again by the Trump administration. And if you get your insurance on the ACA exchanges, you could become collateral damage.
As Republican congresspeople make repeated efforts to repeal Obamacare, the Trump administration has quietly targeted Obamacare in ways big and small. October brought some of the most damaging attacks yet, potentially putting Obamacare exchanges on course to become nothing more than costly high-risk pools -- if they survive at all.
What exactly has President Trump been doing to undermine Obamacare behind the scenes as we've all been focused on his tweeting? Let's take a look at six actions the administration has taken to hasten Obamacare's decline.
1. Announcing an end to cost-sharing subsidies
Most people know Obamacare subsidizes premiums for lower-income insurance buyers. But there's an additional form of assistance provided by Obamacare: cost-sharing reductions (CSRs).
CSRs, which are expected to total $9 billion this year, pay insurers to cover co-pays and deductibles for policyholders with incomes between 100% and 200% of the federal poverty level, who otherwise wouldn't be able to afford the high deductibles of Obamacare policies.
Here's the problem: Obamacare didn't make spending on CSRs mandatory. Congress -- the only branch of government with authority to authorize spending -- must appropriate funds. Congress hasn't done so since 2014, and the Obama administration kept paying, leading to a successful lawsuit by Republicans claiming Obama usurped the congressional power over the purse. A federal judge agreed and ruled that congressional action was required to continue paying CSRS, but suspended the ruling pending appeal.
CSRs continued to be paid, but once President Trump took office, he repeatedly threatened to cut them off before finally announcing on Oct. 12 that CSRs would end.
Per Obamacare, insurers still won't be able to charge deductibles -- but the government won't offset their costs any longer. Insurers will likely raise premiums to cover losses, or they may walk away from the Obamacare marketplace altogether.
2. A damaging executive order
Ending CSRs was the second of a one-two punch, with the first hit coming earlier on Oct. 12 when President Trump signed an executive order changing the rules for association health plans and short-term insurance coverage.
These changes will siphon off healthier people from Obamacare's markets, leaving sicker people behind to drive up premiums. Here's how.
Association health plans allow groups of people to join together to buy insurance. Before Obamacare, association plans could pick which state's insurance regulations applied to them. Their policies often weren't comprehensive, because they'd pick states with relaxed coverage rules. Obamacare made association plans subject to comprehensive coverage requirements by treating them as small businesses.
Trump has announced changes to allow association plans to form more easily -- even among individuals -- and to allow plans to offer cheaper, skimpier coverage. Younger, healthier people may flock to these plans, fleeing the Obamacare marketplaces.
Short-term insurance policies are also exempt from Obamacare's regulations, which is why short-term policies had average monthly premiums of $124 at the end of 2016, compared with $393 average premiums for Obamacare-compliant plans. The Obama administration made it harder for people to buy short-term policies by limiting the duration of coverage to three months and allowing insurers to decline to renew policies.
The Trump administration will change the rule to allow policies to last 364 days and be renewable. This makes these policies a viable Obamacare alternative, so healthier people may opt to buy this coverage and forgo more expensive plans available on Obamacare's marketplaces, which would ultimately raise the costs of insurers and consumers participating in the ACA.
3. Shortening open enrollment
Buyers of individual insurance are allowed to purchase Obamacare policies only during open enrollment. The longer this open enrollment period is, the more people will likely enroll.
Last year, open enrollment ran Nov. 1 to Jan. 31. This year, it will run from Nov. 1 to Dec. 15 -- less than half the time.
The Trump administration also announced it will shut down the federal Obamacare marketplace overnight on the first day of open enrollment, as well as from midnight to noon every Sunday except Dec. 10.
A shorter open enrollment period means fewer people will get coverage. Since the sickest people may rush to sign up, the pool of policyholders is likely to be more costly for insurers to cover.
4. Slashing advertising budgets
About 40% of uninsured Americans are still unaware of the Obamacare marketplaces, according to a recent Commonwealth fund survey, which means advertising is vital to getting healthy Americans to sign up for coverage.
In 2016, the Obama administration spent $100 million on advertising, and this year, only $10 million will be spent. In addition to this 90% cut in ad funding, the Centers for Medicare & Medicaid Services is slashing spending on "navigators," who help people sign up for coverage, by 41%.
As if this weren't enough to discourage new signups, the Trump Administration also spent funds intended to advertise Obamacare to instead make videos telling the stories of people who claim to have been harmed by the law. It goes without saying that these aren't likely to encourage more Obamacare signups.
5. Ending HHS cooperation with outreach groups
The Obama administration successfully partnered with outreach groups to target underinsured communities. Cooperation between Health and Human Services (HHS) and 13 national organizations helped to get more than 4 million Latinos covered. As a result, Latinos, who have a historically large uninsured population, experienced the biggest decline in the uninsured rate of any ethnic group.
Now, HHS is cooperating with outreach groups no longer. HHS has pulled out of events with both Hispanic organizations and others, including a health advocacy group in Mississippi. HHS officials aren't attending events, HHS isn't sending information, and outreach groups are shutting down -- which is likely to lead to fewer people enrolling in Obamacare.
6. Repeated attempts at repeal
"Repeal and replace" has become a legislative zombie as Republicans continually revive their efforts to end Obamacare despite repeated failures.
This has created uncertainty among insurers -- who are particularly averse to uncertainty -- and as a result, insurance companies were late in negotiating premiums in some states.
When their rate quotes came out, the news wasn't good. Concerns about repeal, the threats to CSRs, and questions about whether Trump will enforce Obamacare's mandate to force healthy people to get coverage all prompted premium increases. Some places, like Wilmington, Delaware, saw premiums rise by nearly 50% for 2018.
Insurers have explicitly said that uncertainty is largely responsible for these dramatic increases.
What does this mean for you?
What does all of this mean for you? Nothing good if you get insurance coverage on the individual market. The fewer people who sign up for Obamacare, the more likely it is that the pool of covered policyholders will be sicker. Insurers will lose money, premiums will keep rising, and healthier policyholders will keep heading for the hills.
Obamacare premium subsidies shield some insurance buyers from the immediate effects of Obamacare sabotage, because premiums are capped at 9.66% of household income or less for buyers with incomes between 100% and 400% of the federal poverty level.
However, if you're buying insurance on the Obamacare market without subsidies, Trump's efforts to undermine Obamacare will hit your family budget. Your monthly premiums may rise by hundreds of dollars as the insurance pool gets sicker. Even worse, insurers may leave the marketplace, leaving you with no coverage options at all.
If insurance through Obamacare becomes unaffordable or unobtainable, your only options may be to hope you have access to an association plan or short-term plan, go without coverage (perhaps the worst option), or start looking for a job that offers you insurance -- you may end up needing it soon.
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