Having failed in their effort to legislatively dismantle health care under the Affordable Care Act (ACA), the Trump administration is determined to do so administratively. In just the past few weeks, the administration has cut advertising for the insurance exchanges by 90%, reduced outreach funds nearly in half, shortened the open enrollment period, announced a mysterious shutdown of the exchange website every Sunday morning, purposely created uncertainty about whether it will make legislatively required cost-sharing reduction payments (income-based subsidies), and suggested not enforcing the individual requirement to purchase coverage. The Trump administration has also ordered the Department of Health and Human Services (HHS) to turn down a request to improve the ACA’s exchanges.
The goal of these efforts is clearly to reduce the number of people buying insurance. The strategy to make health care delivery deteriorate so much that even the recent Republican plans look good by comparison.
Such dismantling of a current law is unprecedented in recent history. Presidents often inherit laws they don’t like. But virtually all Presidents have respected the need to carry out the law. Efforts to materially harm people in the interest of promoting an agenda that cannot be passed legislatively are virtually unknown.
Double Jeopardy: Increases in Both Health Care Costs and Taxes
Fortunately, not everyone will be discouraged from buying insurance because of the Trump administration’s efforts. Those who will be deterred are disproportionately those who are less in need of health care—especially the young and healthy. As a result, the risk pool in the exchanges will likely deteriorate.
The smaller, sicker risk pool will, in turn, result in premium increases. The Congressional Budget Office estimates that premiums in the exchanges will rise from 10% to 15% because of the deterioration of the risk pool and the uncertainty created by the administration. The group that will be hit the hardest are those who earn too much to qualify for subsidized coverage but too little to afford private insurance—a group that generally has around $100 000 of annual family income. The 1.5 million people or so in the exchanges whose incomes are higher than the subsidy level will face a cost increase of about $570 per person per year if premiums rise as expected.
Let’s call this what it is: the “Trump tax.” The President is advocating for a tax break that most experts believe favors the wealthy. Middle income people, in contrast, likely will get a tax increase if the proposal remains unchanged by Congress (ironically, from the tax plan, as well as through health care).
People with incomes lower than 400% of the federal poverty line who buy health insurance in the ACA exchanges have their premiums payments capped as a share of their income. Thus, their premium contributions will not rise. But with a more selected group of people in the exchanges, the nature of insurance policies may be adversely affected. Insurers that are concerned about attracting sicker enrollees may reduce the ability of enrollees to access physicians of their choice or receive medications they feel are appropriate.
Physicians will be affected as well. Fewer people covered means less practice revenue. Increased restrictions from insurers means more administrative waste. Whatever the tribulations of the ACA—and there have been many—the Trump tax will almost certainly make things worse.
The Role of the AMA and Other Physician Organizations
What can those interested in the health of the US medical system do in the face of these actions? For starters, it has to be made clear to physicians and patients that the deterioration in the health system is largely a result of explicit actions by the Trump administration. This message is starting to get through. In a recent poll, 60% of people said that the Trump administration and Republicans in Congress are now responsible for problems with the ACA. An even larger majority want the Trump administration to make the ACA work. For example, 80% of people opposed stopping outreach efforts for the exchanges, including a majority of Trump supporters.
Second, Congressional Democrats and Republicans interested in promoting coverage need to pressure President Trump and senior HHS officials to either enforce the law or resign.
Third, the leadership of key health care organizations, especially the American Medical Association (AMA), need to make their voices heard on these implementation matters. The AMA, the largest group of US physicians and an important voice in US medicine, has been prominent in debates about pending legislation. It supported the ACA and opposed recent repeal efforts (including the American Health Care Act, the Better Health Care Act, the “skinny” repeal bill, and the Graham-Cassidy bill). But the organization has been more muted about efforts to undermine the ACA. In 2017, the AMA has issued more than 20 statements and press releases about pending legislation. In the same period, there have been only 2 statements about the Trump administration’s actions with respect to ACA implementation. One statement opposed a shortening of the open enrollment period and a second supported continued cost sharing reduction payments. Neither expressed a comprehensive view about how the administration is implementing the law, and there has been no statement about the importance of effective administration.
The AMA is not alone. The American College of Physicians, the American Academy of Pediatrics, the American Congress of Obstetricians and Gynecologists, and the American Academy of Family Physicians, and other specialty groups have all been outspoken in response to legislation but muted in their critique of administrative action. The AMA and other professional organizations contributed to defeat of the most recent legislative challenges to the ACA, an appropriate first step; now it is time to focus on ensuring continued implementation of the enacted law.
Here is my proposal: physician organizations should come together to monitor implementation of the ACA. This group should have stated goals for the Trump administration and bluntly assess progress towards meeting them. When deliberate efforts to thwart the intent of the law are put forward, the group should immediately and vigorously denounce them. When public servants act as if they believe the law is harmful, they should encourage them to resign.
Because of the attention received by major debates in Congress, we have all come to view health care reform as a legislative matter. With legislation blissfully buried for the moment, we need to change our focus to ensure that health reform is implemented as intended.
About the author: David M. Cutler, PhD, is the Otto Eckstein Professor of Applied Economics in the Department of Economics and Kennedy School of Government at Harvard University and a member of the Institute of Medicine. He served on the Council of Economic Advisers and the National Economic Council during the Clinton Administration and was senior health care advisor to Barack Obama’s presidential campaign. He is a commissioner on Massachusetts’ Health Policy Commission. He is the author of the The Quality Cure (2014) and Your Money or Your Life (2004). He tweets at @cutler_econ. (Image: Ted Grudzinski/AMA)
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