In his speech after withdrawing the Republican health care bill from consideration on Friday, Speaker of the House Paul Ryan said that “Obamacare is the law of the land” and will remain so “for the foreseeable future.” But law professors who have followed the Affordable Care Act (ACA) for the past seven years ago know that its future is not yet secure. President Trump has said that “the best thing we can do politically speaking is let Obamacare explode,” and there’s a lot he can do to make that explosion a reality.
It doesn’t have to come to that. Contrary to GOP reports, the ACA is not collapsing. The Medicaid expansion will continue chugging along and we’re even seeing other states—Kansas and North Carolina most recently—move toward their own expansions. The individual markets in some states are fragile, but they are not in a death spiral. As the Congressional Budget Office noted in its first score of the GOP bill just two weeks ago, the marketplaces would “probably be stable in most areas” under current law.
Without question, however, President Trump and HHS Secretary Price have the ability to radically destabilize the individual marketplace. The only question is whether they attempt to do so through active sabotage, incompetence, or purposeful ambivalence.
One of us (Nick Bagley), along with Harvard PhD student Adrianna McIntyre, has already compiled a preliminary list of executive actions President Trump could take that would reshape the ACA. Many of these will not be news, but we write here to focus on two actions with the greatest potential to disrupt the market: ending cost-sharing payments to insurers and declining to enforce the individual mandate.
The largest concern facing the individual markets is the fate of House v. Price, a lawsuit brought by the House of Representatives against President Obama’s HHS Secretary (Sylvia Burwell) in 2014. The House argued that the administration was acting illegally in making cost-sharing payments to insurers because Congress had not specifically appropriated those funds. A judge on the District Court for the District of Columbia ruled both that the House had standing to sue (wrong) and that the administration’s spending violated the Appropriations Clause (right).
The Obama administration appealed the case to the DC Circuit, but, of course, on November 7, 2016, there was an intervening event: the election of President Trump. The GOP-led House then asked the court to stay the litigation to see what the future might hold for health reform. The case is being held in abeyance, with the next status report due at the end of May, just days before insurers must file their insurance plans for 2018.
Here’s why the case is such a big deal for the individual markets: The ACA instructs insurers to limit the out-of-pocket expenses for enrollees who make less than 250% of the federal poverty level. This cost-sharing cap thus plays a key role in keeping insurance affordable for the low-income population. The federal government is then supposed to reimburse insurers for cutting those low-income customers a break.