Obamacare survived the first year of President Donald Trump, but it’s badly damaged.
The sweeping Republican tax bill on the verge of final passage would repeal the individual mandate in 2019, potentially taking millions of people out of the health insurance market. On top of that, the Trump administration has killed some subsidies, halved the insurance enrollment period, gutted the Obamacare marketing campaign, and rolled out a regulatory red carpet for skimpy new health plans that will change the insurance landscape in ways that are harmful to former President Barack Obama’s signature health care law.
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None of these individually represent a death blow. But in aggregate, the past year adds up to a slow, stealthy erosion of the law.
“They obviously couldn’t kill it, so they’re trying to starve it slowly,” said Rep. Bill Pascrell (D-N.J.), who sits on the House Ways and Means Committee, which helped write the original law.
Advocates acknowledge that Obamacare is weakened, but they also take heart that it has so far survived the onslaught, though in a stripped-down form. In fact, one poll after another has found that the health law is increasingly popular with the American public. Some insurers are finding their footing in the Obamacare markets — although whether the health plans ride out the ongoing turmoil or make a run for the exits will help determine if the law survives, and in what form.
“It’s wounded,” said Jon Kingsdale, who ran the Massachusetts health exchange, the prototype for Obamacare. Yet he and other policy experts noted that the basic framework of the Affordable Care Act — the online marketplaces, the consumer protections, the subsidies that help millions afford insurance — remain in place, as does the Medicaid expansion, which brought insurance to about 12 million newly eligible people. As long as that core survives, it can be rebuilt, Kingsdale said, should such a political moment arrive.
For the Republicans who spent a hamster-wheel of a year trying and failing to repeal and replace Obamacare, their swift dispatch of the unpopular mandate in the tax bill is a sweet and surprising victory. Americans didn’t like being told to get health coverage or pay a fine. Now, Republicans can tell them, they won’t have to.
And with the mandate out of the way, Republicans hope it will be easier to unravel even more of the ACA. If they can’t get the votes to repeal it, they can still try to force its collapse.
“Getting rid of the individual mandate, that’s one of the keys that opens the door for us,” said Rep. Michael Burgess (R-Texas), calling the mandate “the obstacle that prevented any rational discussion on health policy.”
Several Republican senators met Tuesday to lay out their 2018 strategy for picking up repeal efforts where they left off.
“I think we’re all going to say that we ripped the heart out of Obamacare with the individual mandate,” said Sen. Lindsey Graham (R-S.C.), who with Sen. Bill Cassidy (R-La.) has pushed to dismantle Obamacare and turn it over to the states. “It’s pretty hard to rip the heart out of it and not replace it.”
“Once you’ve repealed individual mandate,” Graham added, “politically, you own this thing.”
The CBO estimates the loss of the mandate would mean 13 million fewer people would be insured a decade from now. Not all health policy experts agree that it would have that destructive an effect. For all its political toxicity, the mandate didn’t impose a big enough financial penalty on individuals to do what it was intended to do — namely, push enough young and healthy customers into the new insurance market to spread around the cost of covering the older and sicker ones.
The true impact will be clear soon enough. The repeal of the mandate penalty wouldn’t go into effect until 2019. But because many people think it’s immediate, they may skip getting covered for 2018, further dampening sign-ups, or not pay their premiums, incorrectly thinking that the tax bill gives them a “get-out-of-insurance-free” card.
Yet for all the attention lavished on the mandate, including the Supreme Court test of its constitutionality in 2012, its repeal is only one of several heavy blows to the health law since Trump and the GOP swept in nearly a year ago. Those involve enrollment, cost-sharing subsidies and loosened regulations. Another wave, giving states more leeway to reshape Medicaid, including imposing work requirements, is in the pipeline for 2018.
Immediately upon taking office, the Trump administration pared enrollment advertising, outreach and assistance. Sign-ups for 2017 ended on a flat note last January, rather than with the customary surge. Final numbers for the 2018 open enrollment that ended Friday aren’t available yet but all signs point to a drop-off. Enrollment moved at a brisk clip, but there were just six weeks this year, versus three months in the past.
Higher premiums also cast a cloud over enrollment — and that, in turn, stemmed in part from another Trump administration action, according to the independent CBO. Trump created months of drama about whether he would keep making “cost-sharing reduction” payments to insurers, which they use to bring down out-of-pocket costs for lower-income ACA customers. Facing such uncertainty, many health plans simply fled the market. That meant less competition, less consumer choice — and higher premiums — among the plans that remained.
Certainty arrived abruptly in October. Trump halted the payments — though Congress may reluctantly restore them in its end-of-year spending bill, if Sen. Susan Collins (R-Maine) gets her way. Ironically, many states figured out how to make up for the lost payments in a way that let subsidized Obamacare customers get zero-premium insurance. But the rising premiums — even if most people didn’t pay the sticker price — and the health plan exodus fueled a narrative of doom. Even if Congress does restore the payments for a year or two, it’s not likely to be enough to lure all those health plans back into battered, shrinking markets.
Trump didn’t stop there. In October, he issued an executive order so that states can allow two new kinds of plans to compete with Obamacare insurance policies — without having to abide by the law’s rules. That means they don’t have to offer the full complement of Obamacare health benefits — maternity, mental health, state-of-the-art cancer care, for instance — and they don’t have to offer the same consumer protections, which is bad news for anyone with a pre-existing condition. Both of these plans — association health plans for the small-group market, and yearlong “skinny” stopgap plans — will probably draw the younger and healthier, leaving older and sicker people reliant on Obamacare plans, and driving up the price even more.
“That’s potentially the most destabilizing part of the executive order,” said the Kaiser Family Foundation’s Larry Levitt, referring particularly to the stopgap plans. How much destabilization depends on who buys them. If most customers are young and healthy people who are uninsured, it won’t matter as much. But if they are young and healthy people who flee the ACA market for this cheaper alternative, it could skew the markets even more — at least in the states that exercise these new options.
Some conservative health policy experts don’t think Congress and Trump have gone far enough. They fear scrapping the mandate but leaving many rules intact would prove disastrous, possibly setting in motion an inevitable “bailout” from Congress that would let Obamacare live to see another day. Conservative thinker Chris Jacobs, for instance, wrote in The Federalist recently that lawmakers need to get the rest of the job done. Mandate repeal, he wrote, is like “pruning back the fruit of the poisonous tree” when what’s needed is an attack on its roots.
Yet the end of the individual mandate, combined with these other Trump policies, are likely to make comprehensive health insurance even more expensive. And if fewer people are covered, its constituency may be diluted. Yet if there’s one thing that Obamacare has proven since its enactment in 2010, it is that it is resilient, despite perpetual attack. Its protections for people with pre-existing conditions and the working poor earned it a late-blooming popularity.
The Obamacare wars aren’t over, and the law is in worse shape than it’s ever been — but it’s still here and may produce yet more political surprises. Sen. John Cornyn (R-Texas) even raised one post-mandate scenario that’s not on anyone’s horizon right now: bipartisanship.
“Arguably, doing away with the individual mandate makes the Affordable Care Act unworkable — not that it was particularly great beforehand,” he said. “So I think ultimately this will precipitate a bipartisan negotiation on what we need to do as an alternative.”
Adam Cancryn and Jennifer Haberkorn contributed to this report.