Conclusion and Policy Implications
The findings of this study could inform both short- and long-term actions for policymakers seeking to improve the affordability of marketplace plans and reduce the number of uninsured people in the United States.
The most immediate concern for policymakers is ensuring that the 17 million to 18 million people with marketplace and individual market coverage are able to enroll this fall.
Congress could take the following three steps:
- The Trump administration has not made a long-term commitment to paying insurers for the cost-sharing reductions for low-income enrollees in the marketplaces, which insurers are required to offer under the ACA. Congress could resolve this by making a permanent appropriation for the payments. Without this commitment, insurers have already announced that they are increasing premiums to hedge against the risk of not receiving payments from the federal government. Since most enrollees receive tax credits, higher premiums also will increase the federal government’s costs.9
- While it appears that most counties will have at least one insurer offering plans in the marketplaces this year, Congress could consider a fallback health plan option to protect consumers if they do not have a plan to choose from, with subsidies available to help qualifying enrollees pay premiums.
- Reinsurance to help carriers cover unexpectedly high claims costs.10 During the three years in which it was functioning, the ACA’s transitional reinsurance program lowered premiums by as much as 14 percent.
The executive branch can also play an important role in two ways:
- Signaling to insurers participating in the marketplaces that it will enforce the individual mandate. Uncertainty over the administration’s commitment to the mandate, like the cost-sharing reductions, is leading to higher-than-expected premiums for next year.
- Affirming the commitment to ensuring that all eligible Americans are aware of their options and have the tools they need to enroll in the coverage that is right for them during the 2018 open enrollment period, which begins November 1. The survey findings indicate that large shares of uninsured Americans are unaware of the marketplaces and that enrollment assistance makes a difference in whether people sign up for insurance.
The following longer-term policy changes will likely lead to affordability improvement and reductions in the number of uninsured people.
- The 19 states that have not expanded Medicaid could decide to do so.
- Alleviate affordability issues for people with incomes above 250 percent of poverty by:
- Allowing people earning more than 400 percent of poverty to be eligible for tax credits. This would cover an estimated 1.2 million people at an annual total federal cost of $6 billion, according to a RAND analysis.11
- Increasing tax credits for people with incomes above 250 percent of poverty.
- Allowing premium contributions to be fully tax deductible for people buying insurance on their own; self-employed people have long been able to do this.
- Extending cost-sharing reductions for individuals with incomes above 250 percent of poverty, thus making care more affordable for insured individuals with moderate incomes.
- Consider immigration reform and expanding insurance options for undocumented immigrants.
In 2002, the Institute of Medicine concluded that insurance coverage is the most important determinant of access to health care.12 In the ongoing public debate over how to provide insurance to people, the conversation often drifts from this fundamental why of health insurance. At this pivotal moment, more than 30 million people now rely on the ACA’s reforms and expansions. Nearly 30 million more are uninsured — because of the reasons identified in this survey. It is critical that the health of these 60 million people, along with their ability to lead long and productive lives, be the central focus in our debate over how to improve the U.S. health insurance system, regardless of the approach ultimately chosen.