Before Congress left Washington for the year, Republicans finally made good on their determination to knock big holes in the Affordable Care Act, crippling its requirement that most Americans carry health insurance and leaving insurers without billions of dollars in promised federal payments.
At the same time, public support for the perennially controversial law has inched up to around its highest point in a half-dozen years. Nearly 9 million people so far have signed up for ACA health plans for 2018 during a foreshortened enrollment season, far surpassing expectations.
This dual reality puts the sprawling ACA — prized domestic legacy of the Obama era, whipping post of the Trump administration — at a new precipice, with its long-term fate hinging on the November midterm elections certain to consume Washington once the new year begins. If Democrats win a majority in either chamber of Congress, the law would be protected; a GOP sweep could further embolden repeal attempts.
“It’s right on the balance there,” said Robert J. Blendon, a Harvard professor of health policy and political analysis. “The viability of the program is heavily dependent on the outcome of the election, not the changes in between.”
With recent polls showing health care remains a top concern among voters, both major political parties have an incentive to wield it as an election issue. Democrats are likely to argue that the GOP wants to take coverage away from millions of Americans, with Republicans focusing on escalating insurance prices.
What happens in the interim, health policy analysts say, depends on how events play out in three arenas — Capitol Hill, the White House and the insurance industry.
After a year of full GOP control, congressional Republicans and the White House have damaged the ACA but fallen short of their vehement goal of dismantling broad swaths of it. More ambiguous is whether their end-of-year victory — removing tax penalties starting in 2019 for people who violate the insurance mandate — will whet the GOP’s appetite for taking apart more of the law.
“To those who believe — including Senate Republican leadership — that in 2018 there will not be another effort to repeal and replace Obamacare — well you are sadly mistaken,” Sen. Lindsey O. Graham (R-S.C.) tweeted last week.
Graham's vow was a rejoinder to Senate Majority Leader Mitch McConnell (R-Ky.), who suggested in an NPR interview that "we'll probably move on to other issues." He also noted that the chamber's slender GOP majority will shrink to one senator once the Democratic winner of a special election in Alabama is sworn in next month.
McConnell reiterated his intention to try to coax the Senate early in the year to adopt two measures, promised to a crucial Senate Republican moderate in exchange for her support of the massive tax overhaul enacted last week, that would help cushion ACA insurance marketplaces.
One bill would restore for two years the payments that the law guarantees insurers — estimated at $8 billion in 2018 — to reimburse them for discounts that ACA health plans must give lower-income customers for deductibles and other out-of-pocket expenses. President Trump cut off the payments in October.
The other bill would provide about $10 billion over two years to help states create high-risk pools or otherwise help insurers cope with customers with especially high medical costs. House conservatives fiercely opposed both measures.
Meanwhile, the administration is pressing forward with at least one more jab at the ACA marketplaces. As directed by an executive order that President Trump signed this fall, officials are finishing a draft rule to make it easier for insurers to sell meager but inexpensive health plans that skirt the law’s coverage requirements.
The ground-level effect of such changes for consumers rests in large part on how the insurance industry responds. Without the measure to help stabilize the law’s marketplaces and with greater availability of skimpy health plans, “we risk the individual market on the exchanges becoming a de facto high-risk pool,” said one industry official not authorized to speak on the record. That means premiums would soar, causing those exchanges to shrink and become the province of sick, expensive customers.
On the other hand, said Joseph Antos, a health-care scholar at the American Enterprise Institute, more expensive premiums could “move in the opposite direction of knocking down the ACA” because the law’s premium subsidies would rise to keep pace. For the more than 80 percent of ACA customers who qualify for those subsidies, he said, more generous subsidies could make it easier to afford higher tiers of coverage, motivating more people to sign up.
Such hard-to-predict boomerang effects could be true of the insurance mandate as well. The requirement has always been the least popular part of the law. So at a time when the most recent polls show that slightly more than half the public regards the ACA favorably, removing the most objectionable feature “could even be a blessing in disguise” for supporters, said Larry Levitt, senior vice president of the Kaiser Family Foundation.
Trump sought last week to equate the part of the tax legislation that undermines the individual mandate with repeal of the entire law. His assertion at a Cabinet meeting 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 expansion of Medicaid in more than 30 states plus the District of Columbia; and the premium subsidies.
In fact, health-policy analysts say ending the penalties for violating the mandate will be a real-world test of a debate that has simmered for years: whether a legal requirement to be insured motivates people to get coverage, or whether the ACA’s subsidies are a stronger incentive.
According to the most recent federal figures, 6.7 million Americans who flouted the requirement paid a total of about $3 billion in tax penalties in 2015. Ending the penalties will cause an additional 4 million people to be uninsured in 2019 and 13 million within a decade, according to the nonpartisan Congressional Budget Office. Insurance premiums in the ACA marketplaces will rise an extra 10 percent in most of those years, the CBO estimates.
If this happens, it will feed the talking points of both political parties, Blendon, the Harvard professor, predicts. “The big-picture issues will be premiums increasing and dropping coverage,” he said.
But for now, Antos says, the unexpectedly high number of people enrolling in ACA plans, in a year when insurance choices shrank, premium costs rose and the White House became a megaphone for criticism of the law, suggests that the law remains “durable.”
“I don’t see big lurches in either direction for both political and practical reasons,” he added. “It’s hard to move the ship once it’s moving.”