How the Survival of the Affordable Care Act Could Affect You

Senate Majority Leader Mitch McConnell says he has sent a new version of the Better Care Reconciliation Act bill to the Congressional Budget Office for review.

CBO analysts, and analysts at outside groups, will try to predict how the Senate’s bill might change federal revenue, federal spending, the number of people with health coverage, and the overall state of the commercial health insurance market over the next 10 years.

The analysts will do their best to compare their Better Care bill projections for the “baseline projections” they make based on the assumption that the Affordable Care Act will stay in place, and work roughly the way the drafters expected.

(Related: Will Trump Kill the Affordable Care Act?)

Of course, the Affordable Care Act has often worked differently than drafters, implementers and budget analysts have expected.

In November 2008, for example, analysts at a PricewaterhouseCoopers LLP think tank predicted that the health system changes Barack Obama had proposed would help get about 30 million uninsured people get covered, at a cost of about $2,500 per newly insured individual.

Between 2013 and 2017, the Affordable Care Act Medicaid expansion program, the premium tax credit subsidy program, the cost-sharing reduction subsidy program and the ban on medical underwriting have helped cut the number of uninsured people by 13 million.

The federal government spent about $66 billion on Medicaid expansion support for states in 2016, according to the 2016 Medicaid actuarial report. Milliman estimates the federal government spent about $14 billion on the premium tax credit subsidy program and the cost-sharing reduction subsidy program in 2016. Actual federal Affordable Care Act subsidy spending amounted to $80 billion, for an actual 2016 average of about $6,000 per newly insured individual.

Republicans are now trying to pass a budget bill that would repeal many Affordable Care Act taxes and penalties, and replace the existing subsidy programs with new state grant and tax credit subsidy programs.

It’s possible that the Republican efforts to change the Affordable Care Act could peter out. The Affordable Care Act could stay on the books, more or less as is.

Here are four ideas about how the Affordable Care Act could, possibly, change life for individuals, employers, and agents and brokers in 2018, just by continuing to be the law of the land.

1. Knowing what the rules are in any given market could be harder.

One of the guiding principles floating in the air when policymakers were working on health system change proposals from 2000 through 2009 was that making state insurance rules more uniform would probably help bring down costs, by reducing compliance costs.

The Affordable Care Act eliminated state-to-state differences in underwriting rules and greatly reduced differences in benefits package rules, but it added new types of differences. Since January 2014, when major Affordable Care Act rules took effect, some states have had state-based Affordable Care Act exchange programs, and some have had exchange programs operated by the U.S. Department of Health and Human Services’ HealthCare.gov system. Some states have helped HHS implement the Affordable Care Act major medical standards rules, such as the rate review rules. Other states have refused to have much, or anything, to do with enforcing the Affordable Care Act standards.

Under the administration of former President Barack Obama, efforts by HHS to ease some Affordable Care Act rules without wrestling rule changes through Congress increased state-to-state differences.

(Photo: Thinkstock)

Obama signed the main Affordable Care Act bill into law March 23, 2010. A “grandfathering” provision in the law explicitly let people hold on to individual major medical policies that were in effect on March 23, 2010. Some consumers said they should also be able to keep any policies they bought between March 23, 2010, and Jan. 1, 2014.

The Centers for Medicare and Medicaid Services, the HHS arm in charging of running the Affordable Care Act commercial health insurance programs, took a sideways approach to handling that controversy.

CMS did not try to get Congress to pass a new law. CMS did not develop a formal regulation.

Instead, in November 2013, CMS issued a memo saying it would refrain from enforcing certain Affordable Care Act standards. CMS said it would look the other way if a state let insurers keep individual policies written after March 23, 2010, under the pre-Affordable Care Act rules, stay in effect after Jan. 1, 2014. The non-enforcement memo gave each state the freedom to do what it wanted about “transitional” policies, which are also known as ”grandmothered” policies.

The method CMS used to create individual policy grandmothering set an important precedent: One way to change how the Affordable Care Act works is to let states go their own way.

In other cases, CMS worked with the Internal Revenue Service and the Employee Benefits Security Administration to tweak and flesh out Affordable Care Act rules by issuing different types of “informal guidance,” including memos, rulings on specific proposals, and batches of answers to frequently asked questions.

If the current Affordable Care Act framework stays intact, and Trump administration tries to operate within that framework as well as it can, Trump’s CMS may end up dealing with Affordable Care Act controversies and operational problems by issuing its own non-enforcement letters, and its own batches of informal guidance, that give states more freedom to do what they want to do.

Trump’s HHS has already notified states that it wants to make the Affordable Care Act Section 1332 waiver program, which lets states apply to adjust some Affordable Care Act rules, as flexible as possible.

Trump’s CMS has told states that it wants to find ways to defer more to state insurance regulators. CMS has already decided to rely more on state insurance regulators’ efforts to review 2018 rates, instead of conducting its own reviews.

For agents, brokers and clients, Trump administration efforts to give states more flexibility could lead to programs and rules that do a better job of meeting local needs.