For now, the Affordable Care Act remains the law of the land. What is going to happen to it without new legislation?
WASHINGTON – The Senate’s effort to repeal and replace Obamacare collapsed early Friday morning, and President Trump has already replied that he is ready to “let Obamacare implode” and then reopen negotiations.
Absent some kind of legislation, what is going to happen to the Affordable Care Act? Here’s what the death of “repeal and replace” could mean for you.
Although Republicans have argued they must act because Obamacare is collapsing under its own weight, independent analyses come to a different conclusion. Republicans are primarily talking about the health insurance marketplaces created by the Affordable Care Act for people who don’ t get coverage through an employer or a government program like Medicare or Medicaid. (About 7% of the country buys coverage on the individual market.)
If the law is not changed, the marketplaces will be largely stable in most parts of the country, according to the nonpartisan Congressional Budget Office. And participating insurers are on track to have their best year in the marketplaces since they began in 2014, according to the nonpartisan Kaiser Family Foundation.
Some major players, such as Anthem, plan to no longer offer coverage in many places next year in part because of uncertainty about federal policy. But Centene, another insurer, is expanding its coverage areas. Centene CEO Michael Neidorff said Tuesday the company’s marketplace business “continues to be particularly strong.”
Still, those buying coverage on the exchanges are likely to have fewer options next year. And there are more than 24,000 people currently buying insurance on the exchanges who live in counties which might not have a participating insurance provider, according to preliminary insurance filings. Final decisions won’ t be made until fall.
Premiums continue to be out of reach for some people, particularly those who don’ t qualify for federal subsidies. And the cheapest plans come with high deductibles that can also make it difficult to access coverage.
The pool of people using the exchanges has been sicker and older than anticipated, which leads to higher premiums and fewer insurance companies willing to participate. One reason there aren’ t more younger, healthier people buying insurance on the exchange is because of one of the ACA’s most popular provision: the requirement that insurers let young adults stay on their parents’ plans until age 26. The Obama administration also allowed people to keep their pre-ACA plans longer than originally anticipated, which kept some healthier people from moving to the marketplace. And insurers complain that the ACA’s penalties for not having coverage are too lenient, and that it’s too easy for people to enroll only when they anticipate needing care.
In 2014, Congressional Republicans limited the funding in one part of the ACA that helped offset extreme losses by insurers as the marketplaces were being started. Republicans also took the Obama administration to court to block payments to insurance companies for subsidies that reduce deductibles and co-payments for lower-income customers.
The administration has kept insurance companies guessing about whether it will continue to reimburse them for the cost-sharing subsidies. The administration has also eased enforcement of the requirement that most people have insurance. Those acts are the main drivers of the premium increases sought by insurers for next year, according to the consulting firm Oliver Wyman.
Besides ending the dispute over the cost-sharing subsidies, lawmakers could also continue one of the other industry supports which was only supposed to be temporary. That program essentially subsidies the cost of the sickest customers, which would reduce premiums. Experts have proposed many other changes including expanding premium subsidies, giving insurers incentives to sell plans in counties that would otherwise lack coverage, and making families eligible for premium subsides if plans offered by an employer aren’ t affordable. Some of those changes would be easier to pass than others, and Majority Leader Mitch McConnell warned Friday morning that Republicans will not pass a “bailout” for insurance companies.
Most of the gains in insurance coverage since the ACA was passed have come through the law’s expansion of Medicaid eligibility, even though 19 states have chosen not to expand the program. But more states are expected to do so. If the law isn’ t changed, 80% of the population could live in states that expanded Medicaid by 2026, CBO has estimated.
States that haven’ t expanded may be more likely to if they can get permission from the Trump administration to not follow some Medicaid rules. Health and Human Services Secretary Tom Price has told governors he’s eager to approve alternative Medicaid models. But advocates for the poor could challenge any actions like work requirements that they think go beyond what’s allowed without changing the law.
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