He’s wrong — the Affordable Care Act (ACA) will survive 2018 at least semi-intact. It’s probably not going to thrive, though.
The worst-case scenario for the law — a partial repeal paired with deep cuts to Medicaid — was averted after the GOP couldn’t muster 50 votes for a series of bills in the Senate. The election of Doug Jones in Alabama and signals from Senate Majority Leader Mitch McConnell suggest another bite at that particular apple is not forthcoming.
But that was only a partial escape. The Trump administration’s treatment of the individual insurance market has ranged between neglect and sabotage.
It cut funding for ACA advertising and enrollment-assistance efforts, shortened the enrollment period, and stopped payment of an insurer subsidy. That was enough to help boost premiums — though it doesn’t appear to have hurt enrollment as much as some might have expected.
The toxic cherry on top was the GOP tax bill’s effective repeal of the ACA’s individual mandate.
This will be a blow starting in 2019. Fewer people will sign up for insurance on the exchanges (and in general). The people that do sign up and stick with their insurance will tend to be sicker. That will make exchange participation increasingly expensive and risky for insurers. The CBO projects mandate repeal will cut 13 million from insurance rolls by 2025.
That will heap pressure on insurers that are already having a tough time. Those who have participated in the individual exchanges have lost hundreds of millions of dollars over the past few years. Part of that is their own fault for misunderstanding the market or mis-pricing their insurance. After all, Centene Corp. has done just fine.
But GOP unwillingness to fix some of the ACA’s shortcomings and previous destabilizing efforts have not helped. The end of the individual mandate may be the largest disruption yet. That may cause more insurer exits from the exchanges.
Still, it’s important to acknowledge the parts of the law that have survived. Discussion of the ACA often focuses on the individual exchanges. But the law’s Medicaid expansion is arguably just as important. It has helped millions of vulnerable Americans gain health coverage, and it isn’t going anywhere just yet. Many insurers with a presence on the exchanges also participate in Medicaid.
Subsidies that help low-income people pay for exchange insurance will also continue. More than 80% of people who enrolled in the individual market in 2017 got subsidies. That assistance scales with rising premiums, so many people will be shielded from the impact of any enrollment declines, and insurers can be assured of at least some participation.
Protections for people with pre-existing conditions remain in effect as well, which is more of a mixed blessing. That’s great news for anyone who is or may get sick. But it compounds the risk-pool issues created by the individual mandate repeal.
The ACA has remained surprisingly resilient in the face of this year’s disruptions. It may withstand mandate repeal with similar elan.
There are even faint glimmers of possible upside. Health and Human Services Secretary nominee Alex Azar may not be the torch-bearing anti-ACA partisan his predecessor Tom Price was. There’s a chance insurer cost-sharing subsidies and a premium-lowering reinsurance bill may be funded — though hope dimmed with the news that those measures have been pushed out of a must-pass funding bill and into next year. States could create their own individual mandates, though it would be politically and practically difficult.
No matter what, the year ahead will be tough for insurers, tough for consumers who have fewer choices, and toughest of all for people who don’t qualify for subsidies and bear the full brunt of premium increases. But Obamacare will survive, which is more than some would have predicted a few months ago.
Unfortunately, it will likely remain in survival mode instead of becoming the stabilizing and increasingly profitable market it might have been.
— For more columns from Bloomberg View, visit http://www.bloomberg.com/view.