Shortly after the end of his inaugural parade, President Donald Trump issued his first executive order: instructions for the federal government to dismantle the Affordable Care Act “to the maximum extent permitted by law.”
The executive order is a powerful political statement about the health care law, one that directs agencies to “waive, defer, grant exemptions from, or delay” any taxes or penalties they possibly can. The order doesn’t give Trump any new powers, but does suggest that he wants to move quickly on dismantling major parts of the health overhaul.
“This order doesn’t in and of itself do anything tangible,” says Larry Levitt, vice president at the Kaiser Family Foundation. “But it directs federal agencies to start taking steps to use their administrative authority to unwind the ACA in all sorts of ways. This is a signal that the Trump administration is not waiting for Congress to start making big changes.”
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Republicans are pitching Obamacare “repeal and delay”—the idea of quickly repealing the ACA, but leaving it in place for three years as they craft a replacement. But one key health care expert threw cold water on that idea. Robert Laszewski, president of Health Policy and Strategy Associates, warned the strategy could send the market into “death throes.” He argues that to stabilize the insurance market and ensure that health insurers don’t flee is for the federal government to guarantee to cover their losses. But the politics of that aren’t easy because it would mean funding the three R’s— (risk adjustment, reinsurance, and risk corridors, all programs that subsidize insurance carriers that have significant losses.)
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Bob Kocher and Ezekiel Emanuel, who worked in the Obama White House on health care reform, argue that it’s “misleading” to raise concerns about the fact that individual market health insurance premiums have nearly doubled under Obamacare. “Premiums today,” they say, “are 20% lower than the Congressional Budget Office predicted when the ACA was passed.” Their argument is nonsensically out of touch, and it illustrates why the designers of the ACA got so many things wrong. The unaffordability of exchange-based insurance is the ACA’s most serious problem. As research from Avalere Health has shown, enrollment in ACA-based insurance is alarmingly low among those whose incomes exceed 200% of the federal poverty level.
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Health and Human Services Secretary Sylvia Mathews Burwell recently told reporters that in the marketplace, “85 percent of folks receive subsidies.”
This leaves out something important: that there are millions of people buying their own coverage outside of the marketplace. And none of them receive subsidies. So they don’t have any financial cushion to protect against the larger premium increases most observers expect to see in 2017.
“They are the red-haired stepchildren of American health reform,” says Kevin Coleman, head of research and data at HealthPocket. “They don’t have strong sympathy within the government and have typically been ignored.”
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Six and a half years after the ACA was signed into law, health reform no longer feels like a steady forward march toward progress. It feels more like World War I: dotted with landmines, lined with trenches, and ending inconclusively. In 2010, the Congressional Budget Office predicted that 21 million people would be enrolled in the ACA’s insurance exchanges by 2016; as of now, only 12 million are. That gap between hype and reality is likely to further expand over time.
What happened? It’s a long story, of course. But the simple answer is that the ACA’s exchanges were designed poorly and implemented poorly, by overconfident advocates who dismissed any and all criticism, no matter how well-reasoned.
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Three years ago, health economists believed Obamacare’s soon-to-launch marketplaces would grow to replace much of America’s fractured, complex employer-based health insurance system.
Predictions for the employer-sponsored insurance system’s collapse ran rampant. The question around companies shifting workers to the new public marketplaces was often framed not as if but when. University of Pennsylvania’s Zeke Emanuel pegged it at 2025. MIT’s Jonathan Gruber estimated 2050.
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Competition on the Obamacare marketplaces will decline next year. There will be significantly more places in the country where customers have no choice of health insurance because just one company signed up to sell coverage.
This is the conclusion that health policy experts have increasingly gravitated toward in recent months and weeks, as major insurance companies have announced hundreds of millions of dollars in financial losses on the Obamacare marketplaces.
“Under any likely scenario, there will be less insurer participation in the exchanges in 2017 than there was in 2016,” says Michael Adelberg, a senior director at FaegreBD Consulting who previously worked in the Obama administration helping to manage the marketplaces’ launch.
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