Tag Archives: Individual Mandate

5 Outside-The-Box Ideas For Fixing The Individual Insurance Market

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With Republican efforts to “repeal and replace” the Affordable Care Act stalled, tentative bipartisan initiatives are in the works to shore up the fragile individual insurance market that serves roughly 17 million Americans.

The Senate Health, Education, Labor and Pensions Committee launches hearings the week Congress returns in September on “stabilizing premiums in the individual insurance market” that will feature state governors and insurance commissioners. A bipartisan group in the House is also working to come up with compromise proposals.

Both before and after implementation of the federal health law, this market — serving people who don’t get coverage through work or the government — has proved problematic. Before the law, many people with preexisting health conditions could not get insurance at any price. Now, consumers in the individual market often face higher out-of-pocket costs and fewer choices of health care providers and insurers than in past years. More than 12 million people buy that insurance through the ACA’s marketplaces, while another 5 million buy it outside of the exchanges.

Policymakers generally agree on what immediate efforts to stabilize the market might include. At the top of most lists is ensuring federal payment of subsidies to insurers to pay the out-of-pocket expenses — such as deductibles and copayments — to protect customers with the lowest incomes. Insurers also want the federal government to continue enforcing the requirement that most Americans either have insurance or pay a tax penalty, and continuing efforts to get uninsured people to sign up for coverage during the upcoming open enrollment period, from Nov. 1 to Dec. 15. Those efforts are essential, insurers say, to help keep healthy customers in their risk pools to defray the costs of beneficiaries with medical needs.

But what about ideas that go beyond the oft-repeated ones? Here are five proposals that are more controversial but generating buzz.

Special Report—How to fix the Affordable Care Act

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Click to access FierceHealthcare-HowtofixtheAffordaleCareAct.pdf

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As Congress prepares to get back to business, the industry is holding its collective breath to see if healthcare reform will fall off the agenda. It’s pretty clear that rushing through repeal, replace or repair legislation or letting the Affordable Care Act fail isn’t the answer. In this special report, FierceHealthcare’s editors—experts on the business of healthcare—outline ways to fix the nation’s healthcare system.

Time Crunch Among Hurdles for Bipartisan Senate Push to Bolster ACA

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The leaders of a key Senate committee say they are cautiously optimistic about reaching a deal to shore up the Affordable Care Act’s individual marketplaces, but even with a bipartisan effort, it is far from certain whether they can hash out an agreement in time.

The Senate Health, Education, Labor and Pensions Committee leaders of both parties have set a self-imposed mid-September deadline for a bipartisan agreement. To keep lingering animosity from the Obamacare repeal fight from seeping into negotiations, Chairman Lamar Alexander has made clear that what he’s seeking is far from comprehensive.

The bill will have to be “small, bipartisan and balanced,” the Tennessee Republican said in a statement Wednesday.

Above all, Democrats want to make sure insurers continue to receive payments that help them cover out-of-pocket costs for some low-income patients. President Donald Trump has threatened to cut off the payments, and the administration has kept insurers on tenterhooks by making them only on a month-to-month basis.

Without the subsidies, known as cost-sharing reductions, some insurers warn they’ll be forced pull out of the ACA markets or hike premiums. The companies need certainty about payments at the latest by Sept. 27, the final deadline for them to decide whether to sell Obamacare plans in 2018.

If the committee can reach agreement next month, it would still be a challenge to get a bill through the full Senate and House before the key deadline for insurers. And Trump would still have to sign a bill into law that extends payments he is loath to continue.

The potential for chaos was highlighted this week when the nonpartisan Congressional Budget Office released a report estimating average premiums would rise 20 percent next year and the federal deficit would grow by $194 billion by 2026 if the administration stops paying.

While some conservative hard-liners want to cut off the CSRs, Alexander and other top Republicans have shown they’re willing to work with Democrats to have Congress extend the payments.

Sen. Patty Murray of Washington, the panel’s ranking Democrat, on Thursday called for quick action.

“People across the country are facing much higher premiums next year because of uncertainty driven by the Trump Administration, so I hope Republicans will join Democrats to act quickly to protect patients and families from paying more for care they need — and then continue working in a bipartisan way to make health care more affordable, accessible, and higher quality for all,” Murray said in a statement.

Democrats also want some sort of reinsurance program, an idea that has bipartisan support and would help insurers pay for their most expensive enrollees.

But in return for extending CSRs and including reinsurance, Republicans want to give states more authority over their health care systems, and Democrats could balk at some of their proposals.

Alexander has specifically pointed to changing the ACA’s 1332 waiver program, which allows states to opt out of key ACA regulations as long as it doesn’t lead to reduced coverage, skimpier benefits, more expensive insurance or a higher federal deficit.

In remarks to reporters earlier this month, Alexander noted a proposal that would eliminate all of those requirements besides increasing the federal deficit, in order to give states “more of an opportunity to approve insurance plans.” The plan, which was included in Senate Republicans’ health overhaul bill, would also bar the administration from rejecting a waiver as long as it doesn’t increase the federal deficit.

Democrats would likely oppose that proposal, wary of allowing states to undercut key Obamacare requirements without those other conditions in place.

Sen. Tim Kaine (D-Va.) said he’s interested in a proposal from Sens. Bill Cassidy (R-La.) and Susan Collins (R-Maine) to let states replace Obamacare’s most contentious provision — the mandate requiring people to purchase health insurance or pay a penalty — with a system that automatically enrolls individuals in low-cost coverage if they don’t do so on their own.

Backers of this approach argue it would offer comparable coverage to the individual mandate while being less intrusive, allowing people to opt out.

“I think that’s intriguing,” Kaine said earlier this month in a brief interview. “We ought to have that discussion, but you can’t blow the mandate without something to bring people into the program and do what insurance needs to do, which is to spread risk.”

But auto-enrollment has raised concerns among some liberal health care analysts, including over how to implement and administer such a system. The outstanding questions cast doubt on whether it could garner enough backing to be included in the stabilization bill.

What’s the Near-Term Outlook for the Affordable Care Act?

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If Congress abandons efforts to repeal and replace the Affordable Care Act (ACA), President Trump has said he would “let Obamacare fail.” This Q&A examines what could happen if the Affordable Care Act, also called “Obamacare,” remains the law and what it might mean to let Obamacare fail.

Is Obamacare failing?

The Affordable Care Act was a major piece of legislation that affects virtually all payers in the U.S. health system, including Medicaid, Medicare, employer-sponsored insurance, and coverage people buy on their own. One of the biggest changes under the health reform law was the expansion of the Medicaid program, which now covers nearly 75 million people, about 14 million of whom are signed up under the expansion. Most Americans, including most Republicans, believe the Medicaid program is working well.

When people talk about the idea of the ACA failing, they are usually referring to the exchange markets, also called Marketplaces. These markets, which first opened in 2014, are part of the broader individual insurance market where just 5-7% of the U.S. population gets their insurance. People who get insurance from other sources like their work or Medicaid are not directly affected by what happens in the individual insurance market.

The exchange markets have not been without problems: There have been some notable exits by insurance companies and premium increases going into 2017, and in the early years of the exchanges, insurers were losing money. The structure of the ACA’s premium subsidies – which rise along with premiums and cap what consumers have to pay for a benchmark plans a percentage of their income – prevents the market from deteriorating into a “death spiral.” However, premiums could become unaffordable in some parts of the country for people with incomes in excess of 400% of the poverty level, who are ineligible for premium assistance.

Insurer participation in this market has received a great deal of attention, as about 1 in 3 counties – primarily rural areas – have only one insurer on exchange. Rural counties have historically had limited competition even before the ACA, but data now available because of the Affordable Care Act brings the urban/rural divide into sharper focus. On average at the state level, competition in the individual market has been relatively stable – neither improving nor worsening.

Premiums in the reformed individual market started out relatively low and remained low in the first few years – about 12% lower than the Congressional Budget Office had projected as of 2016 –before increasing more rapidly in 2017. Most (83%) of the 12 million people buying their own coverage on the exchange receive subsidies and therefore are not as affected by the premium increases, but many of the approximately 9 million people buying off-exchange may have difficulty affording coverage, despite having higher incomes. As might be expected, after taking into account financial assistance and protections for people with pre-existing conditions, some people ended up paying more and others paying less than they did before the ACA. Our early polling in this market found that people in this market were nearly evenly split between paying more and paying less. About 3 millionpeople who remain uninsured are not eligible for assistance or employer coverage and many of them may be going without coverage due to costs.

Our recent analysis of first quarter 2017 insurer financial results finds that the market is not showing signs of collapse. Rather, insurers are on track to be profitable and the market appears to be stabilizing in the country overall. In other words, those premium increases going into 2017 may have been enough to make the market stable without discouraging too many healthy people from signing up. However, there are still markets – particularly rural ones – that are fragile.

How would administrative actions affect market stability?

Despite signs that the individual insurance market is generally stabilizing on its own, certain administrative actions could cause the market to destabilize again. Actions the Administration might take that would weaken the market include:

STOP ENFORCING OR WEAKEN THE INDIVIDUAL MANDATE

The individual mandate is the Obamacare requirement that most people either have insurance or pay a penalty. The purpose of it is to get young and healthy people into the market to bring down average costs. If there are not enough young and healthy people signing up, insurers have to raise premiums. If the administration signals it will either stop enforcement of the individual mandate or give broad exemptions, insurers will respond by raising premiums or exiting the market. The Congressional Budget Office (CBO) estimates that without the individual mandate, premiums in the individual insurance market could rise by 20%.

SCALE BACK OUTREACH AND CONSUMER ASSISTANCE

The individual market is often a transitional source of insurance when life circumstances change. People who are temporality unemployed, in school, or early retirees make up a substantial share of the individual market. Additionally, people in this market often experience income volatility and may cycle between Medicaid and subsidized exchange coverage. Those who are sick will be most likely to seek insurance coverage on their own when they go through a change in life circumstances, but outreach and consumer assistance programs – particularly those targeted at young and healthy individuals – can help balance out the risk pool and bring down average costs.

This coming open enrollment period (November 1 – December 15, 2017) is shorter than previous periods and may require more outreach to get people signed up before the deadline. This will also be the first enrollment period run from start to finish by the Trump administration and it is not yet clear how much outreach the administration will take on. Toward the end of the last open enrollment period, the Trump administration cut marketing and more recently has used outreach funds for messages critical of the health care law.

STOP MAKING COST-SHARING SUBSIDY PAYMENTS

Under the Affordable Care Act, insurers are required to offer low-deductible plans to low-income people (58% of marketplace enrollees benefit from these cost-sharing subsidies). For the lowest-income enrollees, these subsidies can bring down the deductible from a few thousand dollars to a couple hundred dollars (Figure 2 below). Providing these higher-value plans to low-income enrollees costs insurers more money (an estimated $10 billion dollars in 2018), so under the ACA the federal government reimburses insurers in the form of a cost-sharing subsidy payment. However, these payments are the subject of a lawsuit and the Administration has signaled they might stop making payments.

If these payments stop, we estimate that insurers would need to raise rates on silver-level plans – which are the only plans where consumers can access cost-sharing reductions – by 19 percent, with states that did not expand Medicaid (primarily red states) facing higher premium increases (Figure 3 below). Lower-income marketplace enrollees receiving premium subsidies would be protected from premium increases because subsidies would rise as well. However, higher-income enrollees not receiving premium subsidies would face higher premiums if insurers expect cost-sharing subsidy payments to end.

The combined effect of these policy changes (not enforcing the individual mandate and defunding cost-sharing subsidies) could cause some insurers to raise premiums on some plans by as much as 40 percentage points higher than they otherwise would. Because premium subsidies increase as premiums rise, administrative actions that cause premiums to rise can also cause taxpayer costs to increase. For example, we estimate that ending cost-sharing subsidy payments could increase net federal costs by about $2.3 billion per year.

Insurers have already submitted their preliminary premiums for the upcoming calendar year to state regulators. Since there has not been clarity on these issues, some insurers are already assuming that the Trump Administration or Congress may take an action that would destabilize the market. Some companies have either significantly raised premiums for next year, scaled back their footprints, or made plans to exit the exchange or individual market all together. Insurers are still negotiating rates for 2018, so if they do not get clarity soon, premiums could go up even more or more insurers could leave.

Again, these premium increases would only affect people who buy their own insurance (particularly middle-income or upper-middle-income people who buy their own insurance without a subsidy to offset the costs), and this group does not make up a large share of the American public. Nonetheless, more insurer exits or large premium increases on the exchange markets could be seen as Obamacare failing. It is worth noting, though, that a majority (64 percent) of the public – including 53 percent of Republicans – say that because President Trump and Republicans in Congress are now in control of the government, they are responsible for any problems with the ACA moving forward.

What happens if the market fails?

Following some announcements of 2018 exits by major insurers, there are some counties at risk of having no insurer on the exchange next year. This would be a first; thus far, all counties have had at least one insurer on the exchange. As negotiations between insurers and state regulators are still underway, there is still time for other insurers to come in and fill these gaps. Thus far, in most cases, a new or expanding insurer has already moved in to cover counties once thought to be “bare.” However, administrative actions that destabilize the market could encourage more insurers to exit.

If no exchange insurer ultimately moves in to some of these counties, people buying their own insurance will not be able to get subsidies and would have to pay full price for insurance. Paying for unsubsidized insurance would be particularly difficult for low-income and older adults living in high-cost areas like many rural parts of the country. Our subsidy calculator can show the difference in cost. For example, in Knox County Ohio, a low-income 60-year-old could get a silver plan for $83 per month but would have to pay $775 per month if he bought that plan without a subsidy, plus he would have a higher deductible because he would no longer benefit from cost sharing subsidies that are only available on the exchange. That same person would also qualify for a free ($0 premium) bronze plan if he buys on exchange, but off-exchange without a subsidy he would have to pay more than $600 per month for a similar plan. People shopping for coverage off-exchange in a county left without an exchange insurer – particularly lower income or older exchange shoppers – may not be able to afford any option and may drop their coverage.

If the market becomes destabilized, and particularly if the individual mandate is not enforced, insurers may decide to exit the off-exchange market as well. This would mean that people in these counties who would otherwise buy their own insurance may not have any option even if they could afford to pay full price.

What might be done to strengthen the Marketplaces?

Although the individual health insurance market is stabilizing on average, insurer financial performance varies and some companies in some states are still struggling. Additionally, some insurers have already decided to increase premiums significantly or exit the market in 2018 on the assumption that the Trump Administration or Congress will take actions that destabilize the market. Although there are many ideas on both the left and the right for how to improve these markets, there are not many options that have bipartisan support.

One possible policy response that could receive bipartisan support would be to reestablish a reinsuranceprogram. Reinsurance programs provide funds to insurers that enroll high-cost (sicker) individuals and can work to lower premiums. The Affordable Care Act included a reinsurance program but it was temporary and phased out in 2016. Republicans in Congress and the Administration have also signaled a willingness to establish reinsurance programs: Both the House and Senate repeal bills included stability funds for reinsurance and Health and Human Services Secretary Price has supported Alaska’s request for a waiver to support its reinsurance program. Though such a program could receive bipartisan support, it would require additional funds (for example, taxing insurers in other markets).

Additional state flexibility to address local challenges in implementing the health care law may also receive some bipartisan support. The challenge of attracting insurers to rural areas or certain states, for example, may warrant state-specific solutions – either as part of the ACA’s waiver program or by Congress giving states additional flexibility.

Healthcare Triage News: The Trump Administration Has Many Options to Undermine Obamacare

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Healthcare Triage News: The Trump Administration Has Many Options to Undermine Obamacare

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While the Senate and the House haven’t been very effective in passing a repeal of Obamacare, the ACA’s provisions are still at risk. There’s a lot that Donald Trump’s administration can do (or not do) to undermine Obamacare’s provisions and marketplaces.

An Early Look at 2018 Premium Changes and Insurer Participation on ACA Exchanges

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An Early Look at 2018 Premium Changes and Insurer Participation on ACA Exchanges

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Each year insurers submit filings to state regulators detailing their plans to participate on the Affordable Care Act marketplaces (also called exchanges). These filings include information on the premiums insurers plan to charge in the coming year and which areas they plan to serve. Each state or the federal government reviews premiums to ensure they are accurate and justifiable before the rate goes into effect, though regulators have varying types of authority and states make varying amounts of information public.

In this analysis, we look at preliminary premiums and insurer participation in the 20 states and the District of Columbia where publicly available rate filings include enough detail to be able to show the premium for a specific enrollee. As in previous years, we focus on the second-lowest cost silver plan in the major city in each state. This plan serves as the benchmark for premium tax credits. Enrollees must also enroll in a silver plan to obtain reduced cost sharing tied to their incomes. About 71% of marketplace enrollees are in silver plans this year.

States are still reviewing premiums and participation, so the data in this report are preliminary and could very well change. Rates and participation are not locked in until late summer or early fall (insurers must sign an annual contract by September 27 in states using Healthcare.gov).

Insurers in this market face new uncertainty in the current political environment and in some cases have factored this into their premium increases for the coming year. Specifically, insurers have been unsure whether the individual mandate (which brings down premiums by compelling healthy people to buy coverage) will be repealed by Congress or to what degree it will be enforced by the Trump Administration. Additionally, insurers in this market do not know whether the Trump Administration will continue to make payments to compensate insurers for cost-sharing reductions (CSRs), which are the subject of a lawsuit, or whether Congress will appropriate these funds. (More on these subsidies can be found here).

The vast majority of insurers included in this analysis cite uncertainty surrounding the individual mandate and/or cost sharing subsidies as a factor in their 2018 rates filings. Some insurers explicitly factor this uncertainty into their initial premium requests, while other companies say if they do not receive more clarity or if cost-sharing payments stop, they plan to either refile with higher premiums or withdraw from the market. We include a table in this analysis highlighting examples of companies that have factored this uncertainty into their initial premium increases and specified the amount by which the uncertainty is increasing rates.

Discussion

A number of insurers have requested double-digit premium increases for 2018. Based on initial filings, the change in benchmark silver premiums will likely range from -5% to 49% across these 21 major cities. These rates are still being reviewed by regulators and may change.

In the past, requested premiums have been similar, if not equal to, the rates insurers ultimately charge. This year, because of the uncertainty insurers face over whether the individual mandate will be enforced or cost-sharing subsidy payments will be made, some companies have included an additional rate increase in their initial rate requests, while other companies have said they may revise their premiums late in the process. It is therefore quite possible that the requested rates in this analysis will change between now and open enrollment.

Insurers attempting to price their plans and determine which states and counties they will service next year face a great deal of uncertainty. They must soon sign contracts locking in their premiums for the entire year of 2018, yet Congress or the Administration could make significant changes in the coming months to the law – or its implementation – that could lead to significant losses if companies have not appropriately priced for these changes. Insurers vary in the assumptions they make regarding the individual mandate and cost-sharing subsidies and the degree to which they are factoring this uncertainty into their rate requests.

Because most enrollees on the exchange receive subsidies, they will generally be protected from premium increases. Ultimately, most of the burden of higher premiums on exchanges falls on taxpayers. Middle and upper-middle income people purchasing their own coverage off-exchange, however, are not protected by subsidies and will pay the full premium increase, switch to a lower level plan, or drop their coverage. Although the individual market on average has been stabilizing, the concern remains that another year of steep premium increases could cause healthy people (particularly those buying off-exchange) to drop their coverage, potentially leading to further rate hikes or insurer exits.

Outside Of Washington, There Is A New Vital Center In Health Care Reform

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Larissa Pisney of Denver joins others during a protest outside the office of U.S. Rep. Mike Coffman, R-Colo., over the health care overhaul bill up for a vote in the U.S. House Thursday, May 4, 2017, in Aurora, Colo. (AP Photo/David Zalubowski)

Republicans in Congress are mired in political quicksand. Following passage of the Affordable Care Act (ACA) in 2010, they locked themselves into a promise to repeal and replace it at the behest of ultra-conservative donors and party activists who control the GOP’s nomination process. Since 2010, however, Americans and rank-and-file Republicans increasingly came to expect help meeting the rising costs of medical care and insurance and to accept the ACA’s tangible programs to address these concrete challenges.

The Democrats created their own political trap. They passed the ACA on the promise of making health care affordable but deductibles and rising premiums continued to present a burden to many Americans.

Both parties are missing, however, the vital center on health reform that has formed since 2010. Americans are frustrated with Democrats for not delivering on their promise of affordability, and they are now alarmed with Republican efforts to repeal—instead of improve—the ACA’s coverage of costs.

Tracking Changes In Public Opinion

Most public opinion polls are unable to track these changes in opinion about health care because they are only snapshots, drawn from a moment in time. To remedy this, we have been gathering panel data, tracking the views of the same group of Americans every two years since the ACA’s passage in 2010. This equips us to study how individuals respond to the ACA as they experience or learn more about the law’s provisions over time. Specifically, we conducted four waves of interviews in the two-month period leading up to national elections from 2010 to 2016 when health reform received heightened attention; this avoided the risk of choosing an arbitrary month when health reform might have arbitrarily lost or gained salience.

The first wave was conducted by the Survey Research Institute (SRI) at Cornell University and consisted of a national sample of 1,200 adults. Abt SRBI (now part of Abt Associates) conducted the last three waves, returning to the same individuals. All waves asked identical questions and were administered by telephone, using only landlines in 2010 and adding mobile phones in 2012, 2014, and 2016. Forty-nine percent of the original 2010 survey (587 individuals) responded to all four waves. Survey weights were applied to each survey to match representative demographic targets and allow us to generalize from our panel to the adult population in the United States.

Why Americans Dislike Health Reform

Republicans have been eager to highlight the unpopularity of the Affordable Care Act, also known as “Obamacare.” Exhibit 1 shows that unfavorable assessments of the ACA have steadily increased since its passage. Unfavorability rose from 44 percent in 2010 to 58 percent in 2016.

Exhibit 1: Increasingly Unfavorable Views Of The Affordable Care Act (Percent)

Question: “As you may know, a major health care bill was signed into law in 2010. Given what you know about this law, do you have a generally favorable or generally unfavorable opinion of it, or do you have a neutral opinion, neither favorable nor unfavorable?” Exhibit 1 presents the “unfavorable” responses.

Why are Americans increasingly disenchanted with the ACA? The public’s displeasure emanates to a large extent from frustrations with health care costs. Democrats promised to lower the costs of medical care and insurance with the enactment of the ACA. They did succeed to slow the rate of increase in national health care spending and insulate most subsidized enrollees in its insurance Marketplace from premium increases, as the Congressional Budget Office reports (Note 1). Yet, the costs of medical care remain high, and premiums and deductibles are out of the reach of some Americans.

The source of the public’s rising frustration with health care costs is picked up in Exhibit 2. The first grouping of bars on the left shows increasing frustration with costs for medical treatments that are not covered by insurers. By 2016, 14 percent expressed dissatisfaction with the amount and number of treatments that their insurance covered, a 6-point increase from 2014. One-third of Americans also expressed dissatisfaction in 2016 with the out-of-pocket costs that they were forced to pay because of gaps in their insurance coverage, as shown in the middle cluster. This is an 8-point increase from 2014.

Exhibit 2: Rising Concerns About Affordability (Percent)

Question: Several questions asked respondents to indicate their satisfaction or dissatisfaction with individual features of the health care system—“The number and kind of treatments your health insurance will cover” and “The amount you spend out of pocket on health care costs your insurance doesn’t cover.” A separate item asked respondents to indicate their agreement or disagreement with the statement: “Public officials care about making health care more affordable for people like me.” (Exhibit 2 shows “disagreement” with the statement.)

The public’s disappointment with the persistent burden of health care costs leads it to blame lawmakers for a lack of responsiveness. The bars on the right in Exhibit 2 indicate that a growing majority of Americans disagree with the statement that, “Public officials care about making health care more affordable for people like me.” Fifty-eight percent of Americans disagreed with this statement in 2016, a 10-point increase since 2012.

In addition, the sense that the ACA has not delivered the affordability that Democrats promised may help account for the sharply stronger conclusion in recent years that the ACA’s taxes present a heavier burden. Exhibit 3 shows that the proportion of Americans who believe that their taxes have increased a lot or a little has risen from 43 percent in 2012 to 56 percent in 2016. This growing perception that the ACA has increased taxes rests on inaccurate assumptions. The ACA’s financing primarily relies on two taxes on individuals whose yearly income exceeds $200,000 or for married couples earning more than $250,000—an increase in Medicare’s tax on earnings by 0.9 percent and a new 3.8 percent tax on capital gains from investments. These taxes fall on less than 2 percent of tax filers, according to the non-partisan Tax Policy Center (Note 2).

Exhibit 3: Growing Perception That The Affordable Care Act Increased Taxes (Percent)

Question: “Do you think that the new health care law enacted in 2010 has increased the taxes that you pay, decreased the taxes that you pay, or has it had no impact on the taxes that you pay?”

Americans Oppose Repeal Because They Appreciate The Effects Of Health Reform

Considering the strong public disapproval of repeal, President Donald Trump and congressional Republicans are discovering that it is a mistake to equate the public’s frustrations with the ACA with support for repealing its programs. When respondents reported “unfavorable” views of the law, we followed up with a question asking them whether they would prefer either “repeal[ing] [the ACA] as soon as possible,” or “giving the law more time to have a chance to work, with lawmakers making necessary changes along the way.” In Exhibit 4, we combined those who favored giving it “a chance to work” with those who expressed “favorable” overall views of the law. This shows that since 2010 more Americans favored the law or wanted to give it time to be improved than backed repeal. Although support for repeal inched up since 2010, a greater percentage of Americans consistently favored the ACA and improving it over repeal by a 41-to-37 margin in 2010 and by 49-to-43 in 2016.

Exhibit 4: More Americans Prefer To Keep And Improve The Affordable Care Act Than Repeal It (Percent)

Question: This figure is based on two survey questions. The first is the following: “As you may know, a major health care bill was signed into law in 2010. Given what you know about this law, do you have a generally favorable or generally unfavorable opinion of it, or do you have a neutral opinion, neither favorable nor unfavorable?” Respondents who had an unfavorable view were asked a second question about their view about the law’s future: “The law should be given more time to have a chance to work, with lawmakers making necessary changes along the way, OR the law should be repealed as soon as possible?” The repeal bar reports responses from the second question; the other bar adds together favorable responses in the first question with the “law should be given more time” responses.

Support for keeping and improving the ACA stems from a growing appreciation for its concrete effects. Exhibit 5 shows that rising percentages pinpoint the ACA’s tangible programs as having either “a great deal” or “quite a bit” of an impact on themselves and their family (other options included “some,” “a little,” and “none”). There is greater recognition in 2016 compared to 2010 or 2012 of the impact of allowing parents with insurance to continue to cover their children until they are 26 years old. More than one in five Americans now report that the ACA expanded their access to health insurance. In addition, nearly one in four Americans, 24 percent, voiced appreciation for the impact of the ACA’s assistance to seniors to pay for prescription medications. Moreover, recognition of a personal impact resulting from the ACA’s tax credits and other subsidies to help people purchase health insurance has remained stable since 2014 and is higher than in earlier years.

Exhibit 5: Rising Appreciation Of The Impact Of The Affordable Care Act (Percent)

Question: “I’m going to read to you a list of some of the features of the health care law that was enacted in 2010. For each one, please answer this question: “How much of an impact has this feature had on you and your family: a great deal, quite a bit, some, a little, none?” Respondents are asked about the following features of health reform: coverage of adult children on their parents’ insurance plans until they are 26 years old; access to health insurance or medical care supported or provided by government; help for seniors to pay for prescription drugs; and tax credits and other subsidies to help people pay for health insurance. Exhibit 5 combines “a great deal” and “quite a bit.”

The New Vital Center On Health Reform

Overall evaluations of the ACA follow the partisan pattern that is familiar today: 68 percent of Democrats have favorable views versus 9 percent of Republicans. What stands out, however, is that the ACA’s tangible effects are starting to loosen rigid partisan dividing lines. Exhibit 6 shows the percentage of Americans reporting a personal impact from at least one of the four provisions presented in Exhibit 5. Democratic elected officials enacted the ACA, and, not surprisingly, majorities of rank-and-file Democrats have generally singled out the law’s effects from early on: 51 percent of Democrats reported an impact from at least one of the law’s features in 2010; by 2016, this recognition remained largely stable, inching up to 54 percent. Strikingly, however, the percentage of Republicans perceiving an impact on themselves or their families has increased by 8 percentage points, from 26 percent in 2010 to 34 percent in 2016 despite vociferous GOP attacks on the ACA. Among independents, the proportion soared by 23 points, from 28 percent to 51 percent. These findings indicate that appreciation for the ACA has expanded beyond the ranks of Democratic partisans who were predisposed to favor it; growing numbers of Americans across the political spectrum increasingly value the impacts of health reform in their own lives.

Exhibit 6. Widening Appreciation Of The Affordable Care Act’s Impact (Percent Reporting Impact Of A New Benefit)

Exhibit 6 presents the percentage of respondents who reported that at least one of the four provisions presented in Exhibit 5 had a “great deal” or “quite a bit” of impact on themselves or their family.

The crux of the public discontent with the ACA—and the repeal proposals by Republicans—is the amount paid for insurance coverage. Respondents to the survey appear to share the complaint of ACA critics that insurance costs are too high. After high expectations following the ACA’s enactment, satisfaction with the cost of health coverage has dropped by 10 points—from 73 percent satisfied in 2010 to 63 percent in 2016. This general assessment misses, however, a crucial condition—whether or not individuals are covered by government programs such as Medicare, Medicaid, or a subsidy financed by the ACA. We found a striking pattern among Republicans, Democrats, and independents: By a margin of 20 points or more, individuals with government coverage were consistently more satisfied with the cost of insurance than those who rely on private health plans. For instance, 79 percent of Republicans with government coverage were content with insurance costs as compared to 56 percent without this coverage. Independents outside the sway of either major party expressed the highest satisfaction when experiencing government coverage (100 percent) and exhibit the largest gap between those covered and those without coverage (41 points).

In short, Republican public officials continue to spotlight what they perceive as the disappointment of Americans with ACA coverage, but the reality is that the most dissatisfied are those who lack government insurance. In fact, most Americans (including Republicans) who benefit from government insurance are content with their coverage.

Health Reform’s New Vital Center

Public opinion toward the ACA has been poorly understood because of an apparent contradiction. On the one hand, a growing share of the public harbor unfavorable views of the ACA as a whole, and proponents of repeal have seized on this dissatisfaction to claim a popular mandate. On the other hand, the discontent of Americans stemmed from disappointment with the ACA for not satisfying their expectations of genuine protection from the burden of costs. Far from wanting to be rid of the ACA, Americans are looking to it to deliver more effective protection.

In the immediate aftermath of World War II, the historian Arthur Schlesinger, Jr., wrote of the “vital center” about the direction of America that was supported by both major political parties and most Americans. Despite today’s fractiousness in Washington over health reform, everyday Americans are converging toward a new vital center of support for health care reform.

Awareness of the ACA’s tangible impacts fits into a robust notion of collective responsibility instead of the individualist approach advocated by conservatives. Since the ACA’s passage, nearly nine out of 10 Americans have consistently embraced access to health care as a “basic right.” Not surprisingly, nearly all Democrats embrace the principle of health care as a right. What stands out is that rank-and-file Republicans overwhelming and increasingly hold the same view—rising from 64 percent in 2010 to 72 percent in 2016. Contrary to the position of Washington Republicans, establishing health care as a birthright owed to Americans is now widely shared. Republican proposals, such as those that would allow states to opt out of some of the ACA’s core consumer protections (including those guaranteeing coverage for individuals with preexisting medical conditions), may well tap into this strain of public opinion and provoke broad opposition.

Elected officials in Washington and, particularly, steadfast opponents of health reform are sliding to the margins of public opinion. The daily problems that Americans face in paying for medical care and insurance mean that pragmatism is trumping ideology. In the past, federal lawmakers responded to broad public agreement and worked across the aisle to improve the flaws in the original legislation that produced Social Security in 1935 and Medicare in 1965. The question today is whether Washington can return to that pragmatic tradition and catch up to the emerging vital center in Americans’ attitudes toward health reform.

Note 1

Congressional Budget Office. American Health Care Act: cost estimate. Washington (DC): CBO; 2017 Mar 13.

Note 2

Tax Policy Center. Tax units above and below the $250,000/$200,000 threshold, 2013–2022. Washington (DC): TPC; 2012 Nov 26

What’s the Near-Term Outlook for the Affordable Care Act?

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If Congress abandons efforts to repeal and replace the Affordable Care Act (ACA), President Trump has said he would “let Obamacare fail.” This Q&A examines what could happen if the Affordable Care Act, also called “Obamacare,” remains the law and what it might mean to let Obamacare fail.

Is Obamacare failing?

The Affordable Care Act was a major piece of legislation that affects virtually all payers in the U.S. health system, including Medicaid, Medicare, employer-sponsored insurance, and coverage people buy on their own. One of the biggest changes under the health reform law was the expansion of the Medicaid program, which now covers nearly 75 million people, about 14 million of whom are signed up under the expansion. Most Americans, including most Republicans, believe the Medicaid program is working well.

When people talk about the idea of the ACA failing, they are usually referring to the exchange markets, also called Marketplaces. These markets, which first opened in 2014, are part of the broader individual insurance market where just 5-7% of the U.S. population gets their insurance. People who get insurance from other sources like their work or Medicaid are not directly affected by what happens in the individual insurance market.

The exchange markets have not been without problems: There have been some notable exits by insurance companies and premium increases going into 2017, and in the early years of the exchanges, insurers were losing money. The structure of the ACA’s premium subsidies – which rise along with premiums and cap what consumers have to pay for a benchmark plans a percentage of their income – prevents the market from deteriorating into a “death spiral.” However, premiums could become unaffordable in some parts of the country for people with incomes in excess of 400% of the poverty level, who are ineligible for premium assistance.

Insurer participation in this market has received a great deal of attention, as about 1 in 3 counties – primarily rural areas – have only one insurer on exchange. Rural counties have historically had limited competition even before the ACA, but data now available because of the Affordable Care Act brings the urban/rural divide into sharper focus. On average at the state level, competition in the individual market has been relatively stable – neither improving nor worsening.

Premiums in the reformed individual market started out relatively low and remained low in the first few years – about 12% lower than the Congressional Budget Office had projected as of 2016 –before increasing more rapidly in 2017. Most (83%) of the 12 million people buying their own coverage on the exchange receive subsidies and therefore are not as affected by the premium increases, but many of the approximately 9 million people buying off-exchange may have difficulty affording coverage, despite having higher incomes. As might be expected, after taking into account financial assistance and protections for people with pre-existing conditions, some people ended up paying more and others paying less than they did before the ACA. Our early polling in this market found that people in this market were nearly evenly split between paying more and paying less. About 3 millionpeople who remain uninsured are not eligible for assistance or employer coverage and many of them may be going without coverage due to costs.

Our recent analysis of first quarter 2017 insurer financial results finds that the market is not showing signs of collapse. Rather, insurers are on track to be profitable and the market appears to be stabilizing in the country overall. In other words, those premium increases going into 2017 may have been enough to make the market stable without discouraging too many healthy people from signing up. However, there are still markets – particularly rural ones – that are fragile.

Republicans learn the limits of reconciliation with failed ACA repeal

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https://www.brookings.edu/blog/fixgov/2017/07/28/limits-of-reconciliation-and-failed-aca-repeal/?utm_campaign=Governance%20Studies&utm_source=hs_email&utm_medium=email&utm_content=54885356

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With late night drama not often seen on the Senate floor, Republicans’ latest attempts to pass a bill repealing the Affordable Care Act failed last night, thanks in part to a divide the party’s congressional leaders, especially in the Senate, could simply not bridge.

In Congress, we expect that the majority party’s choices about what to work on and how to work on it will be guided, in large part, by their desire to maintain and grow their majority in the future. As the process went on over the past several months, it became increasingly clear that, for the current GOP leadership, what they thought was best for the party’s collective fortunes was adopting something that they could credibly claim “repeals Obamacare.” After all, doing so has been one of their central campaign promises since the law was adopted in 2010—and what helped account for some of their electoral success since that time. The content of the narrow bill to which Senate Republicans retreated in an attempt to keep the process moving reflects this priority, in that it contained symbolic provisions that would be easy for voters to understand as “Obamacare repeal” should the bill have ultimately become law. Chief among these provisions was the repeal of the requirement that individuals purchase health insurance, known as the individual mandate. This provision is among the law’s best known and the change in the Senate bill would have been easy for voters to understand. Under Obamacare, they were required to do something; under the Republican bill, they would not have been.

At the end of the day, however, individual Senate Republicans concluded that even if leaders had judged that “repealing Obamacare” was in the best interests of the party collectively, they could not support the different proposals drafted to actually get there. This was perhaps most true of Senators Susan Collins (R-Maine) and Lisa Murkowski (R-Alaska), who opposed beginning debate and all three alternative proposals considered this week. There were also, however, 11 other senators who voted no on at least one of the alternatives offered this week. While some of those votes may have been strategic, as members knew that the proposal would not ultimately be enacted, they do help illustrate the persistent divides within the Republican Party about the best way to proceed on health policy. In an era of high party polarization and a well-sorted electorate, this kind of cross-pressuring, where what’s good for the party is not necessarily good for the individual member, is less common than it once was. But as the experience of the last few months suggests, those situations can still and do arise.

While the choice by Republicans to pursue their collective goal of “repealing Obamacare” through the fast-track budget reconciliation process meant that Senate Majority Leader Mitch McConnell (R-Ky.) only needed to find 50 votes, it also constrained his task in important ways. The rules of the budget process, including the Byrd Rule, place restrictions on the content of reconciliation bills and amendments to them. While it can be difficult to know exactly how these rules shape a particular piece of legislation, one consequence of them is that leadership does not necessarily have as much room to maneuver in terms of deal-making as they might have on other bills. What’s more, by turning to a process that did not require the support of any Democrats to move forward, Republicans could not rely on the opposition of the other party as a useful foil while they sought to build a winning coalition. Instead, all attention was focused on the party’s internal conflicts and inability to reach agreement—a task made harder by the presence of a same-party president without the policy expertise or interest to help broker the necessary deals. Special legislative procedures that prevent filibusters, in sum, can help majority parties get legislative wins, but only if the party agrees internally on the policy particulars of what that win should look like.

As an agenda item, health care generally and Obamacare specifically aren’t going anywhere any time soon. The Children’s Health Insurance Program, which covered about 9 million children in 2016, needs to be reauthorized by the end of September, and uncertainty about the continued payment of certain subsidies for some Obamacare enrollees on the individual marketplace remains. But with a range of other major issues needing action in the coming weeks—including spending bills and the debt ceiling—Republicans appear ready to move on from their legislative pursuit of their biggest collective goal of recent years.

States Have Already Tried Versions Of ‘Skinny Repeal.’ It Didn’t Go Well

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Betting that thin is in — and might be the only way forward — Senate Republicans are eyeing a “skinny repeal” that would roll back an unpopular portion of the federal health law. But health policy analysts warn that the idea has been tried before, and with little success.

Senators are reportedly considering a narrow bill that would eliminate the Affordable Care Act’s “individual mandate,” which assesses a tax on Americans who don’t have insurance. The bill would also eliminate the ACA’s penalties for some businesses – those that have 50 or more workers and fail to offer their employees health coverage.

Details aren’t clear, but it appears that — at least initially — much of the rest of the 2010 health law would remain, under this strategy, including the rule that says insurers must cover people who have pre-existing medical problems.

In remarks on the Senate floor Wednesday, Sen. Minority Leader Charles Schumer, D-N.Y., said that “we just heard from the nonpartisan Congressional Budget Office that under such a plan … 16 million Americans would lose their health insurance, and millions more would pay a 20 percent increase in their premiums.” The CBO posted its evaluation of the GOP’s proposed plan Wednesday evening.

Earlier in the day, some Republicans seemed determined to find some way to keep the health care debate alive.

“We need an outcome, and if a so-called skinny repeal is the first step, that’s a good first step,” said Sen. Thom Tillis, R-N.C.

Several Republican senators, including Dean Heller of Nevada and Jeff Flake of Arizona, appear to back this approach, according to published reports. It is, at least for now, being viewed as a step along the way to Republican health reform.

“I think that most people would understand that what you’re really voting on is trying to keep the conversation alive,” said Sen. Bob Corker, R-Tenn. “It’s not the policy itself … it’s about trying to create a bigger discussion about repeal between the House and Senate.”

But what if, during these strange legislative times, the skinny repeal were to be passed by the Senate and then go on to become law? States’ experiences with insurance market reforms and rollbacks highlight the possible trouble spots.

Considering the parallels

By the late 1990s, states such as Washington, Kentucky and Massachusetts felt a backlash when some of the coverage requirement rules they’d previously put on the individual market were lifted. “Things went badly,” said Mark Hall, director of the health law and policy program at Wake Forest University.

Premiums rose and insurers fled these states, leaving consumers who buy their own coverage (usually because they don’t get it through their jobs) with fewer choices and higher prices.

That’s because — like the Senate plan — the states generally kept popular parts of their laws, including protections for people with pre-existing conditions. At the same time, they didn’t include mandates that consumers carry coverage.

That goes to a basic concept about any kind insurance: People who don’t file claims in any given year subsidize those who do. Also, those healthy people are less likely to sign up, insurers said, and that leaves insurance companies with only the more costly policyholders.

Bottom line: Insurers end up “less willing to participate in the market,” said Hall.

It’s not an exact comparison, though, he added, because the current federal health law offers something most states did not: significant subsidies to help some people buy coverage. Those subsidies could blunt the effect of not having a mandate.

During the debate that led to passage of the federal ACA, insurers flat-out said the plan would fail without an individual mandate. On Wednesday, the Blue Cross Blue Shield Association weighed in again, saying that if there is no longer a coverage requirement, there should be “strong incentives for people to obtain health insurance and keep it year-round.”

Individual mandate is still unpopular in voter polls

About 6.5 million Americans reported owing penalties for not having coverage in 2015.

Polls consistently show, though, that the individual mandate is unpopular with the public. Indeed, when asked about nine provisions in the ACA, registered voters in a recent Politico/Morning Consult poll said they want the Senate to keep eight, rejecting only the individual mandate.

Even though the mandate’s penalty is often criticized as not strong enough, removing it would still affect the individual market.

“Insurers would react conservatively and increase rates substantially to cover their risk,” said insurance industry consultant Robert Laszewski.

That’s what happened after Washington state lawmakers rolled back rules in 1995 legislation. Insurers requested significant rate increases, which were then rejected by the state’s insurance commissioner. By 1998, the state’s largest insurer — Premera Blue Cross — said it was losing so much money that it would stop selling new individual policies, “precipitating a sense of crisis,” according to a study published in 2000 in the Journal of Health Politics, Policy and Law.

“When one pulled out, the others followed,” said current Washington Insurance Commissioner Mike Kreidler, who was then a regional director in the federal department of Health and Human Services.

The state’s individual market was volatile and difficult for years after. Insurers did come back, but won a concession: For a time, the insurance commissioner lost the power to reject rate increases. Kreidler, first elected in 2000, reclaimed that authority.

Predicting the effect of removing the individual mandate is difficult, although Kreidler said he expects the impact would be modest, at least initially. Subsidies that help people purchase insurance coverage — if they remain as they are under current law — could help blunt the impact. But if those subsidies are reduced — or other changes are made that further drive healthy people out of the market — the impact could be greater.

“Few markets can go bad on you as fast as a health insurance market,” said Kreidler.

As for employers, dropping the requirement that those with 50 or more workers must offer health insurance or face a financial penalty could mean some workers would lose coverage. But their jobs might be more secure, said Joseph Antos, a health care economist and resident scholar at the American Enterprise Institute.

That’s because the requirement under the ACA meant that some smaller firms didn’t hire people or give workers more than 30 hours a week — the minimum needed under the ACA to be considered a full-time worker who qualified for health insurance.

The individual mandate, he added, may not be as much of a factor in getting people to enroll in coverage as some think, because the Trump administration has indicated it might not enforce it anyway — and the penalty amount is far less than most people would have to pay for health insurance.

However, the individual market could be roiled by other factors, Antos said.

“The real impact would come if feds stopped promoting enrollment and did other things to make the exchanges [— the state and federal markets through which insurance is offered —] work more poorly.”