JAMA Forum: The Surprising Resiliency of the Affordable Care Act

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Ever since the passage of the Affordable Care Act (ACA) in 2010, Republicans (and, more recently, President Trump) have made their opposition to the ACA a rallying cry. The focus on “repeal and replace” during the 2014 Congressional election and again in the November 2016 full election led many Republicans to expect a rapid replacement of this key Obama administration legislative victory. House Republicans had even proposed a general legislative strategy before the 2016 election called “A Better Way,” which included changes in several areas of public policy, including health care.

However, the reality of getting replacement legislation through the Republican Congress proved to be much more challenging than many had anticipated. Republican House leadership had to work very hard to get their version of a replacement bill passed in May of 2017, despite the substantial Republican majority (240-194) in the House. The bill that was ultimately passed frustrated both conservatives who thought it was not conservative enough and moderates who were concerned about the Congressional Budget Office’s estimate that an additional 22 million people would be uninsured as a result of the legislation. Given the House’s unsuccessful experience in attempting to replace the ACA, it was not surprising that the Senate, with its very narrow majority of 52-48 and no prior history of an agreed-upon replacement bill, was unable to pass its own version of replacement legislation.

Limited Bipartisan Efforts
The more logical strategy would have been to structure a bipartisan approach—primarily because of the increased likelihood of sustainability with legislation that has received support by both parties. Previous examples of such legislation include the Medicare and Medicaid bills passed at the beginning of the Johnson Administration (and rejected by conservatives in both parties) or the State Children’s Health Insurance Bill, which passed with bipartisan support by a Republican-led majority during the second Clinton term.

There was some brief bipartisan interest in reforming the ACA in 2017 as the Problem Solvers Caucus, a group in the House led by Reps Tom Reed (R, NY) and Josh Gottheimer (D, NJ), focused on strategies to stabilize the individual insurance market. But this effort was overtaken by the Republican bill passed in May of 2017. Senator minority leader Chuck Schumer (D, NY) said that Democrats were interested in finding bipartisan strategies to reform the ACA provided that Republicans ceased their efforts to repeal the ACA. His statement seemed disingenuous, however, given the dismissive attitude of Senate Democrats to legislation introduced by Bill Cassidy (R, La.) and Susan Collins (R, Maine) that included an option for states to keep the ACA but with a 5% reduction in funding.

Continued Attacks
The Trump administration and some of the Republican state attorneys general have continued to attack various aspects of the ACA. The Tax Cuts and Jobs Act of 2017 was passed in December on a party line vote of 51-48 (Sen McCain was absent), which, in addition to reducing personal and corporate tax rate, eliminated the ACA’s individual mandate. (Technically, it reduced the tax imposed on individuals who do not have insurance to 0%.) This change does not go into effect until 2019, so its effect will be unknown for at least another year.

The Trump administration announced in July that it was putting on hold risk-adjustment collections and payments and also reduced funding for groups called navigators that assist callers on finding an exchange plan in their area. This led critics of the administration to describe the move as one more attempt to undermine the ACA. However, in this case, the Centers for Medicare & Medicaid Services (CMS) announcement was in response to a February ruling by the US District Court for the District of New Mexico to stop risk-adjustment payments that had been brought by a New Mexico CO-OP (consumer-operated and oriented plan). In actuality, CMS had asked the court to reconsider its ruling and issued a final rule in late July that has enabled CMS to restore making payments under the program.

Given the ACA’s surviving the existential threats it has faced since Republicans swept the 2016 elections, it is astounding how well the law seems to be functioning to date. The latest government numbers on the uninsured population indicate the full-year estimate for 2017 was 29.3 million (9.1%) uninsured persons of all ages—not significantly different from the last year of the Obama Administration. Although younger adults (ages 25-34 years) remained twice as likely as the pre-Medicare population to lack coverage, most children continued to be insured. The biggest change was the percentage of people who enrolled in a high-deductible health plan (ie, a deductible of at least $1300 for self-only coverage or $2600 for family coverage). This share continued to increase, largely because of the increasing cost of insurance, and comprised almost 44% of those insured younger than age 65 years in 2017, up from 25% in 2010. Fortunately, the percentage of people with a health savings account (HSA) also more than doubled over the period, and almost 42% of those with a high-deductible health plan now have an HSA.

There are some in the Republican Party, including many of the Republican state attorneys general, who argue that because the mandate was eliminated in 2017, the rest of the ACA becomes invalid because of a lack of severability of its parts. This challenge is in review at the district court level, but few believe it has any chance of surviving at the federal appellate level, should it make it that far.

The latest threat to the ACA, at least according to its supporters, is the Trump administration’s expanded availability of short-term health plans. These plans provide fewer benefits and fewer protections than are required for the plans offered in the ACA insurance exchanges and are an attempt to provide options to people who receive small or no subsidies under the current programs and are effectively being priced out of the market. Enrollment for unsubsidized subscribers in the individual market decreased by almost 30% between 2015 and 2017, and the belief is that short-term plans may be more responsive to their needs and ability to pay.

Perhaps most remarkable is that some insurers are entering and expanding their offerings, with 3 states reporting new carriers entering statewide. The ACA appears here to stay.

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About the author: Gail Wilensky, PhD, is an economist and Senior Fellow at Project HOPE, an international health foundation, and also cochairs the Bipartisan Center’s initiative on the future of health care. She directed the Medicare and Medicaid programs, served as a senior adviser on health and welfare issues to President George H. W. Bush, and was the first chair of the Medicare Payment Advisory Commission.  She is an elected member of the Institute of Medicine. (Image: Ted Grudzinski/AMA)

About The JAMA Forum: JAMA has assembled a team of leading scholars, including health economists, health policy experts, and legal scholars, to provide expert commentary and insight into news that involves the intersection of health policy and politics, economics, and the law. Each JAMA Forum entry expresses the opinions of the author but does not necessarily reflect the views or opinions of JAMA, the editorial staff, or the American Medical Association. More information is available here and here.

 



Categories: Caring for the Uninsured and Underinsured, Health Policy, The JAMA Forum

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