As congressional Republicans this week crippled the Affordable Care Act’s requirement that most Americans carry health insurance, they simultaneously abandoned in the final politicking of 2017 a pair of measures that President Trump and the Senate’s GOP leader had promised to help cushion the law’s marketplaces.
The measures, pledged to a crucial Republican moderate in exchange for her support on Congress's massive tax overhaul, would have temporarily restored an ACA subsidy to health insurers that Trump ended this fall and would have given states several billion dollars to help buffer insurance companies from customers with especially high medical costs.
Sen. Susan Collins (R-Maine) took Majority Leader Mitch McConnell (Ky.) off the hook in the end, saying she would be satisfied if he brought up the two bills early next year — though it is unclear they will ever surmount a wall of opposition from House conservatives.
The turn of events amounts to a double whammy for the ACA. It means that lawmakers will end the first year of the Trump era having knocked down a fundamental pillar without allowing the compensatory protections that outside analysts and even some in the GOP consider critical.
The president sought Wednesday to equate the part of the tax legislation that undermines the individual mandate with repealing the entire 2010 health-care law, which was President Barack Obama’s prime domestic achievement. “We will come up with something much better,” Trump told a Cabinet meeting.
His assertion was a pronounced overstatement. Other central features of the ACA remain intact — including its insurance marketplaces, intended for Americans who do not have access to affordable health benefits through a job; the federal subsidies that help more than 80 percent of people with ACA health plans pay for their premiums; and the expansion of Medicaid in more than 30 states plus the District of Columbia.
Still, the administration has taken its own steps to undercut the law's insurance marketplaces and is pressing forward with more. As directed by an executive order Trump signed two months ago, officials are finishing a draft rule that will give insurers more room to sell meager but inexpensive health plans that skirt ACA requirements.
Despite such efforts, federal health officials on Thursday revealed that about 8.8 million people have enrolled in 2018 coverage through the federal HealthCare.gov website. The sign-up total, which excludes states operating their own ACA insurance exchanges, defied expectations of both supporters and opponents of the law that the marketplaces would attract far fewer people for the coming year.
Though large portions of the ACA remain intact, the executive branch's moves and what Congress has done and not done this week represent a reversal of fortune for Republicans, who repeatedly failed this year to pass bills to carry out their long-held goal of repealing much of it. While assembling the legislation for a massive tax overhaul, Senate Republicans narrowed their sights and added the language eliminating enforcement of the ACA's coverage requirement starting in 2019.
According to the most recent federal figures, 6.7 million Americans who flouted that requirement paid a total of about $3 billion in tax penalties in 2015. “This tax reform legislation is a major step toward real health-care freedom for our country, thanks to its repeal of the individual mandate,” acting health and human services secretary Eric Hargan said Wednesday after it had passed both chambers.
Ending the penalties will save the government an estimated $338 billion in the coming decade because fewer Americans will buy ACA health plans with federal subsidies, according to the nonpartisan Congressional Budget Office. The CBO estimates that 4 million additional people will be uninsured in 2019 and 13 million within a decade, while insurance premiums in the ACA marketplaces will rise an extra 10 percent most of those years.
Those escalating premiums are what the two measures that Collins was promised were designed to partly ward off.
One bipartisan bill, negotiated by Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.) and the panel’s ranking Democrat, Sen. Patty Murray (Wash.), would restore for two years the “cost-sharing reduction” payments that reimburse insurers for discounts they must give lower-income ACA customers to help them afford their health plans’ deductibles and other out-of-pocket costs.
The second bill, co-sponsored by Collins, would provide $5 billion each of the next two years to help states run high-risk pools or otherwise support insurers coping with customers who need especially expensive health care.
On Wednesday, with House conservatives sharply critical of both proposals and the Senate’s top Democrat resisting any piecemeal additions to a spending bill to prevent a government shutdown, Collins and Alexander conceded to the political reality in saying they would accept McConnell waiting until January to bring up the pair of measures.
“It looks like the Christmas present of lower health insurance premiums will now have to be a Valentine’s Day present,” Alexander said in a joint statement.
Exactly how much the measures would shore up the ACA, slowing the rise in insurance rates or deterring more insurers from withdrawing from its marketplaces, is a matter of debate. Two recent consultants' analyses concluded that they would be a considerable help.
Avalere Health estimates that restoring the cost-sharing payments and providing $5 billion to help buffer insurers from high-cost patients would translate into an extra 1.6 million people in the ACA exchanges by 2020 and premiums 18 percent lower than they otherwise would be.
Stopping enforcement of the individual mandate “is kicking the market when it is down,” said Chris Sloan, an Avalere senior manager. With insurers defecting, rates spiking and less time for consumers to enroll, he expects that the two bills would have a rare, positive effect on the market.
The consulting firm Oliver Wyman estimates a stronger effect, a forecast Collins has cited in contending that the combined legislation would more than offset the downsides of no longer penalizing people who violate the law’s insurance requirement.
Frederick Isasi, executive director of the liberal consumer lobby Families USA, said Wednesday that “90 percent of the negative impact” of undermining the insurance requirement would remain even if the bills pass. But “at the margins,” he said, they contain “important improvements that stabilize” the marketplaces.
Yet Gail Wilensky, a veteran Republican economist and senior fellow at the international health-care organization Project Hope, said that because the coverage requirement “was always kind of a crappy mandate lite,” ending its enforcement is not that significant. She favors Congress providing the cost-sharing-reduction payments but said that, even without them, the ACA’s premium subsidies will shelter most marketplace customers from higher coverage expenses.
As recently as Wednesday morning, Senate Republican leaders were searching for a political path to fulfill their commitment to Collins by attaching the ACA provisions to a spending bill Congress must pass to keep the government from shutting down on Friday.
But House GOP leaders were adamant that they had no intention of agreeing to that. “It’s pretty clear our conference has no appetite” for a spending extension that restores subsidies to insurers, said Rep. Kevin Cramer (R-N.D.).
Senate Minority Leader Charles E. Schumer (D-N.Y.) then threw another obstacle into McConnell's path, saying Democrats would not agree to anything beyond the basics needed to keep the government running, unless Republicans were open to discussions of each party's spending priorities.
At that point, Collins and Alexander issued their statement. “There is every reason to believe,” they wrote optimistically, “that these important provisions can and will be delivered as part of a bipartisan agreement.”