During his campaign, Donald Trump repeatedly called for the repeal of the Affordable Care Act (ACA). With the specifics of his replacement plan unknown, it’s clear that the ambiguity is making many in the healthcare industry very nervous. Ted Shaw, president and CEO of Texas Hospital Association, stated, “Any replacement [of the ACA] needs to ensure that patients can get the care they need and providers are fairly paid for services provided.” Similarly, Marilyn Tavenner, president and chief executive of America’s Health Insurance Plans (AHIP), released a statement requesting that the government support stable health insurance markets by encouraging young, healthy individuals to sign up for coverage, maintaining subsidies for low- and moderate-income individuals to purchase insurance, and offering financial support to health plans that enroll high-cost individuals.
The day after the election, more than 100,000 Americans rushed to purchase health insurance under the Affordable Care Act, highlighting that many consumers are just as nervous as big industry players about what impending changes might mean for them. As provider organizations and insurers scrambled to protect their interests, a common, impartial voice for healthcare consumers came from the American Cancer Society Cancer Action Network, which implored Congress to consider patient protections, especially for those with pre-existing conditions.
Although President Trump has advocated for a more consumer-driven healthcare market, it is wrong to contend that consumerism in healthcare is entirely a right-wing idea. Both left and right-wing policies have created larger roles for consumers in the healthcare marketplace – albeit, in different ways. The ACA was arguably the largest driver of a consumer revolution in health insurance; it opened up a mass market of coverage sold directly to individuals. Furthermore, more than 90% of marketplace enrollees are enrolled in high deductible health plans, which typically increase the amount of out-of-pocket spending consumers are responsible for. As a result, consumers have more choice and greater financial stakes in the market than they had previously.
90% of marketplace enrollees are enrolled in high deductible health plans…
The ACA has given 22 million people coverage, including more than ten million who have received coverage through individual plans on marketplaces. The uninsured rate went down from 16.3% in 2010 to 8.6% in the first quarter of 2016. The ACA expanded options for those with pre-existing conditions, who often had little choice before. What’s more, the employer-sponsored market remained stable, calming initial fears that employers would reduce coverage and push employees onto the exchanges. And while overall consumer opinions on the ACA often parallel political party preferences, many of its individual provisions receive bi-partisan support.
However, unforeseen challenges have negatively impacted consumer choice. Consumers in some states found that the plans offered under the ACA had narrower networks, and their physicians weren’t necessarily included. Furthermore, in 2016, some of the largest insurers pulled out of the state marketplaces after sustaining substantial financial losses, meaning that consumers had fewer plans to choose from. Many of the remaining plans have raised their premiums. Even before Aetna’s decision in August to discontinue marketplace plans in 11 of the 15 states where it operated, the Kaiser Family Foundation projected that there would be 5.8 plans to choose from per state in 2017 (this compared to 6.9 in 2015 and 6.5 in 2016). In August, the New York Times reported that 17% of Americans eligible for a marketplace plan would only have one insurer to choose from for 2017.
So, what will happen to consumer choice during a Trump presidency? Because Republicans lack a supermajority in the Senate, it’s unlikely that they will be able to repeal the entire ACA. Trump has committed to keep two popular ACA provisions: one that allows children to retain coverage through their parents’ plans until age 26 and another that requires insurers to cover individuals with pre-existing medical conditions. They’ll also need to ensure that the employer-sponsored market, which provides insurance to 177 million people, remains stable and competitive.
However, Republicans can use reconciliation, a budget process, to eliminate several other ACA provisions. Tom Price, who received the nomination for Health and Human Services secretary, introduced a bill last year as a member of Congress to replace the ACA. The proposed measures from Price and Trump promise to expand consumer choice, but may limit it as well:
Potential to expand consumer choice:
- Improving price transparency: Trump has advocated for improved price transparency from provider organizations. If successful, this would undoubtedly aid consumers in comparing healthcare options.
- Selling insurance across state lines: Trump has advocated for allowing the sale of health insurance across state lines (existing laws prohibit it), which would likely increase the number of available options. However, some skeptics have pointed out that out-of-state plans may struggle to meet state regulations, as well as compile recruit physician networks.
- Expanding use of Health Savings Accounts (HSAs): HSAs, tax-advantaged savings accounts for medical expenses, are currently only offered to individuals with high-deductible health plans. Trump would give a greater number of consumers the option of tax-advantaged saving for future health expenses. However, these accounts would more likely benefit the wealthy and educated.
Potential to limit consumer choice:
Trump has committed to keep two popular ACA provisions.
- Reducing Medicaid availability: The ACA expanded Medicaid coverage for nearly all low-income individuals with incomes at or below 138% of the poverty line. Trump has instead advocated block grants to states, letting them administer Medicaid as each sees fit. This might decrease federal funding, and ultimately, enrollment numbers, reducing access and options for many needy people.
- Eliminating the individual mandate: If Trump removes the individual mandate (which forces taxpayers to prove they have health insurance), it’s possible that many healthy people will choose not to buy insurance. Insurers would be left with riskier pools of sicker individuals who would have to pay higher premiums.
- Losing insurance subsidies: If the replacement plan reduces subsidies, fewer affordable choices will be available to consumers seeking to purchase individual insurance plans.
In conclusion, it seems likely that those consumers who already enjoy the luxury of choice in the health insurance market will see their choices and therefore competitive pricing improve. But many consumers who have enjoyed greater choice thanks to the ACA may see their access to affordable health insurance choices dwindle rather than expand. The political downside of upending consumers who have benefited from the ACA may, however, limit the numbers who in the end will be disadvantaged by the determination to repeal and replace Obamacare, if only in name.
Featured image credit: Donald Trump by Marc Nozell. CC BY 2.0 via Flickr.