Progress on Health Insurance Coverage Grinds to a Halt

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On the eve of the midterm elections, health insurance has emerged as a prime issue dividing Republicans and Democrats. While President Trump tries to mobilize the Republican base by appealing to fears of immigrants seeking asylum, Democrats present themselves as defenders of the Affordable Care Act, especially its protections for people with preexisting conditions. Alarmed by their vulnerability on this issue, Trump and some Republican candidates have tried to claim that they are more committed to providing such protections than Democrats are, a claim that has no basis in fact.

Back in 2017, I reported on the Republican bills to repeal and replace Obamacare, all of which failed to pass. According to the Congressional Budget Office, the bills would have increased the number of uninsured Americans by millions. Some of those would be uninsured by choice, because of the elimination of the individual mandate to buy insurance. Others would be priced out of the market because of reductions in Medicaid funding or eligibility, reductions in federal subsidies to pay premiums, or higher premiums charged by insurance companies. Insurance companies were expected to raise some premiums to compensate for lost customers as the repeal of the individual mandate allowed healthy people to go without insurance. Another predictable effect was that some people would be insured, but with plans that wouldn’t cover as much. Under some of the bills, states could get waivers from Obamacare’s strict standards of coverage (requiring ten “essential benefits” and prohibiting annual or lifetime caps on payouts). In at least one bill, states could even opt out of requiring insurers to cover people with preexisting conditions.

In short, if Congressional Republicans had had their way, the country’s health insurance system would be looking more like it was before Obamacare, with affordable coverage for the healthy and wealthy, but millions of uninsured or underinsured among the rest.

Although these attempts to destroy Obamacare failed, Republicans have continued their efforts to weaken it. Their tax “reform” included elimination of the tax penalties for failing to carry health insurance, effective in 2019. The Trump administration is already declining to enforce them in 2018. Although the penalties were unpopular, they did encourage healthy people to carry insurance, and that enabled insurers to spread the cost of covering the sick among more customers, helping to keep premiums down.

With the penalty for carrying approved coverage eliminated, the Trump administration has announced that insurers can now offer plans that fail to comply with Affordable Care Act standards, although the ACA is still the law of the land. These cheaper plans will be available to healthy people, but probably not to people with preexisting conditions. The administration will also stop making the “cost-sharing reduction payments” that helped insurers who complied with ACA standards hold premiums down. The Kaiser Family Foundation estimates that 2019 premiums for ACA-compliant plans will be 12% higher than they would have been without these changes. (Premiums might actually have fallen in 2019, since insurers raised premiums unnecessarily high for 2018 to cover themselves amidst the uncertainty surrounding the fate of the law.)

According to the Census Bureau’s Current Population Survey, the percentage of Americans who lack health insurance fell from 13.3 percent in 2013 to 8.8% in 2016, as the ACA took effect. No further progress occurred in 2017, however. One reason was that the Trump administration put an end to most federal efforts to sign people up. Another is that the states that were most receptive to expanding Medicaid—that is, blue states—had already done so.

Republican control of the federal government constitutes a threat to affordable health insurance for two reasons. First, the Republican leadership says it will try again to repeal the ACA or have it declared unconstitutional. (The attorneys-general of twenty states are suing for that purpose right now.) Second, even without repeal, Republicans are making it easier for healthy people to go without coverage or obtain cheaper, minimal coverage. That makes it harder for insurers to offer full, high-quality coverage at a price people can afford, especially for people with preexisting conditions. Republican control at the state level is also an obstacle to coverage, especially since it usually means no expansion of eligibility for Medicaid.

Progress toward universal health insurance, which many democratic countries have already achieved, is stalling out in the U.S. under Republican rule. And what progress has occurred could easily be reversed if Republicans remain in power.

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