In November 2016, following the election of Donald Trump, I launched this blog. My first post was titled, “The Potential for Dismantling the Affordable Care Act with a Trump Presidency.” Tonight, President Trump will be delivering his first State of the Union address. One year in, how much headway did the Trump Administration make in its pledge to dismantle Obamacare?

Legislative attempts to repeal Obamacare using budget reconciliation failed once, and then failed again, and again. Instead, a new tax law, executive orders, and policy guidance have served as tools of disruption. Let’s take a look at how well the three-legged stool of Obamacare is holding up: (1) protections for people with pre-existing conditions, (2) requiring people to get coverage, and (3) making that coverage affordable.

Protections for People with Pre-Existing Conditions

    Insurance plans sold in the exchanges are still required to provide coverage for people with pre-existing conditions, and cannot charge you more for that coverage. Nothing has changed about this law.

Χ    However, Idaho recently told insurance companies that they can ignore Obamacare rules, including allowing insurers to charge people who are sick up to 50% more for premiums, relative to standard rates. They are also allowing insurers to eliminate coverage for pre-existing conditions if individuals go without coverage prior to enrolling. It is still unknown whether insurance companies will jump at the chance to offer these pared-down plans, and how the new Secretary of Health and Human Services, Alex Azar, will respond to this blatant disregard of federal law.

Requiring People to Get Coverage

Χ    The individual mandate was effectively eliminated. The Tax Cuts and Jobs Act of 2017 did not actually repeal the individual mandate, but instead zeroed out the penalties assessed by the IRS for not having health insurance. In other words, there is still a law on the books that requires individuals to have health insurance, but there is no “stick” associated with that mandate. The CBO estimated the impact of eliminating the mandate:

√    Federal budget deficits would decrease by $338 billion between 2018 and 2027;

Χ    4 million people would lose coverage by 2019, up to 13 million in 2027;

√    Coverage in the exchanges would remain relatively stable;

Χ    Premiums in non-group markets would increase 10 percent each year over 10 years; and

√    While the elimination of the penalty would have basically the same impact as eliminating the mandate entirely, a small portion of those who enroll in coverage solely because of the mandate would continue to do so, because it remains the law of the land.

    Some blue states are now deciding how to respond to this change in federal law. Massachusetts still has their state-level individual mandate on the books, so proof of coverage will continue to be assessed. Democratic lawmakers in Maryland have proposed an innovative state-level mandate where the penalty would act as a down payment on a health insurance plan.

Making that Coverage Affordable: Medicaid

    The Medicaid expansion remains in 32 states plus DC with low-income adults covered up to 133% of the federal poverty level (FPL). This continues to have positive effects on coverage, access to care, and helping to keep safety net providers open for business.

    Medicaid is still an entitlement program, meaning if you are eligible for the program, you will receive benefits. Several of the repeal efforts tried and failed to block grant Medicaid, which would have made it subject to continued appropriations with a budget cap on federal dollars, resulting in some combination of skimpier benefits, fewer enrollees, lower provider payments, and higher cost sharing.

Χ    The sustainability of the benefits associated with the Medicaid expansion was recently undercut by new guidance issued by the Centers for Medicare and Medicaid Services (CMS) allowing states to use Section 1115 waiver authority to impose work requirements for “able-bodied” adult Medicaid recipients (i.e., not disabled, pregnant, or elderly). According to the CMS policy guidance issued to State Medicaid Directors, work requirements are aimed at improving “Medicaid enrollee health and well-being through incentivizing work and community engagement” to “help individuals and families rise out of poverty and attain independence.” Work requirements are not a new idea for means-tested programs. This debate occurred with welfare reform during the Clinton Administration with the creation of TANF (Temporary Assistance to Needy Families). Data show that most people on Medicaid already work, and if they don’t, there is a reason why.

Χ    Right now, nine states have pending waivers under review by CMS. So far, Kentucky is the first and only state with approval for work requirements. Importantly, Kentucky was hailed as one of the major successes of the ACA, reducing the rate of the uninsured from 16 to 8% in just one year, following Medicaid expansion. Ironically, this new rule may incentivize red states that have not previously expanded Medicaid to do so, using the work requirements to narrow eligibility for benefits.

Χ    There tends to be agreement on at least part of the effect of work requirements, despite different opinions about their relative merit. For example, in arguing in favor of work requirements, the Heritage Foundation put this forth as evidence of Maine’s positive experience with work requirements in Food Stamps, “After the work requirement was put into place, Maine’s caseload of able-bodied adults without dependents dropped by 80 percent within three months.” This is precisely what people opposed to work requirements are afraid of—that work requirements in Medicaid are just another way to reduce access to benefits for low-income populations. At its core, the problem with Medicaid work requirements is that they deem health care as something that the poor should have to earn, rather than something we all should be entitled to as a fundamental human right. Again, it all comes back to values.

Making that Coverage Affordable: Health Insurance Exchanges

    Premium tax credits for individuals between 100 and 400% FPL are still going strong. People in this income range are the most protected from instability and rising premiums in the insurance exchanges, because premium contributions are effectively calculated as a percentage of income.

√    Individuals between 100 and 250% FPL still receive cost sharing reductions (CSR) from insurance companies.

Χ    The Trump Administration stopped reimbursing insurance companies for passing on those CSRs to low-income enrollees between 100 and 250% FPL. Before ending the CSR subsidies completely, Trump had been threatening to pull them. The uncertainty was already out there, leading insurance companies to increase premiums in anticipation. The ones who feel these rate increases the most are those who have incomes above 400% FPL, and are therefore not eligible for any premium tax credits. However, this also means that when rates go up, the cost of those federal subsidies goes up too.

Χ    The Trump Administration proposed a new rule in early January, detailing guidelines for association health plans, which would not be subject to certain Obamacare requirements, such as essential health benefits. These types of plans are targeted at small businesses, but their legacy is shoddy at best. The concern is that these plans will be lower cost with skimpier benefits, potentially appealing to younger, healthier individuals. While this could be seen as a positive aspect of affordability for this segment of the population, critics argue their existence could pull healthy people out of the exchanges, increasing premiums for those who remain.

Taken Together, What is the State of Health Care in the U.S.?

While much of Obamacare remains the law of the land, the three-legged stool is looking rickety. Uncertainty remains the name of the game, with states bearing the brunt of deciphering erratic federal actions and figuring out how to best deal with the coverage and cost issues of their residents. Prior gains in insurance coverage are expected to diminish in the name of individual freedom. Low-income “able-bodied” adults are likely to face more barriers to coverage as states adopt new flexibilities and try to rein in costs. Healthier, younger individuals in the exchanges may opt for less expensive and less robust coverage, leaving sicker, older people left in the unsubsidized pool, exposed to higher premiums.

Meanwhile, we have not addressed any of the persistent problems in health care, such as rising costs across the system crowding out spending on other societal investments, lack of affordability of premiums and cost-sharing for individuals at all income levels, and persistent gaps in equitable access to high quality evidence-based care. It is time to get to work generating some new solutions for improving health care.