The Affordable Care Act Coverage Expansions: Impact, Repeal, and Regulatory Changes

1. The Affordable Care Act Coverage Expansions at 8 3/4 Sherry Glied, Ph.D

2. Outline • ACA design and structure • ACA effects • Repeal, Replace, Undo • Tax Cut and Jobs Act • Regulatory changes • Association health plans • Short-term coverage • Lawsuit

3. Political Landscape 2008 2016 • Obama 365, McCain 173 • House: 256 (D), 178 (R) • Senate: 56(D), 41(R), 2(I) April 27: Arlen Specter (R)→(D) June 20: Al Franken (D) • Trump 306, Clinton 232 • House: 247 (R), 188 (D) • Senate: 52(R), 46(D), 2(I)

4. Key elements of the ACA coverage expansions

5. Constraints • Net 10-year cost negative – save >$200 billion over 10 years • Gross 10-year cost of coverage expansion < $800 Billion • Include • delivery system reforms • insurance competition • public health • No coverage for undocumented

6. 1. Reform of Insurer Practice • Medical Loss Ratio 80%/85% • Rate Review – review of increases>10% • Transparency/appeals • Lifetime limits • Annual limits • Pre-existing conditions • Underwriting and rating limits • Risk adjustment

7. 2. Improvements in Coverage • Preventive services in Medicare • Part D donut hole in Medicare • Preventive services with no copay • Essential Health Benefits • Standardized cost-sharing • Actuarial value • Bronze (60%), Silver (70%), Gold (80%), Platinum (90%)

8. 3. Expansions of Coverage • Dependent coverage to 26 • Medicaid expansion to 133% FPL -- 2012 Supreme Court • Tax credits to 400% FPL – in marketplaces • Share of income • Full exposure at margin • Health Insurance Marketplaces • Requirements to offer and obtain coverage • Employer mandate (firms 50+) • Individual mandate, Employer requirements

9. What happened

10. State Medicaid Expansions March 2014 November 2018

11. Uninsured Rate Among the Nonelderly Population, 1972-2018 CBO – Feb. 2013 projection – 11% uninsured

12. % Non-Elderly Adults Uninsured by State Analysis of BRFSS

13. Impacts Access – ↓lack personal doctor, ↑afford care Appointment availability –↑Medicaid, ↔ private Bankruptcy – ↓unpaid bills sent to collections Federal budget – ↓subsidies, ↑Medicaid, ↓net Health outcomes – ↑self-reported health Hospital uncomp.care – ↓Medicaid expansion Out-of-pocket – ↓though premiums ↔ Prevention – ↑clinical and ↑public health NHE –↓2% anticipated

14. Repeal, replace, UNDO

15. Elements of Repeal • End the open-ended entitlement to Medicaid • Block grant • Per capita cap • Limit (or eliminate) subsidies and make them less redistributive • Reduce redistribution from healthier to sicker • Relax ratings rules • Eliminate individual mandate • Eliminate essential benefits • Increase “skin in the game” • Raise cost-sharing

16. Block Grant Medicaid • TANF experience • Funding cuts • Benefit dilution – drop optional benefits, reduce services • Capture by providers – more funding for hospitals, less for individuals • Economic downturns (per-capita cap alleviates)

17. Subsidies • Shift from income and premium-linked subsidies • Fixed % of income for second-lowest cost silver plan • To fixed dollar tax credits based on age

18. 2016 Rates vs. Increases Footer here

19. Rating and Content Rules • Eliminate requirements • Try to reduce cost of coverage for healthy • Limit benefits • Increase cost-sharing • Allow health rating

20. Tax Cut and Jobs Act • Set individual mandate penalties to zero • Effects • Less salient → drop coverage • Premiums ↑ 10% • Coverage ↓ 13 million • Of whom, 5 million Medicaid

21. Regulatory changes

23. Association Health Plans • https://www.regulations.gov/document?D=EBSA-2018-0001-0001 • Allows health care associations • Not required to cover EHBs • Vary rates by age, gender, industry • Concern • Siphon off healthier people • Drive up premiums for those who require protections (mental health, substance use, pregnancy) • So far, Michigan, Nebraska, Nevada plans offered

24. Short-term health plans August 1, 2018 Short term health plans may last up to a year and may be renewed for up to 3 years May exclude pre-existing conditions May exclude benefits Not available in MA

25. litigation

26. Texas v. Azar • Mandate is no longer constitutional under taxing power (because no penalty) • Texas argues – entire law should be overturned • Trump admin argues – just pre-ex, community rating • Attorneys General of TX, WI, AL, AR, AZ, FL, GA, IN, KS, LA, MO, NE, ND, SC, SD, TN, UT, WV and Governors of ME and MS

27. Texas v. Azar • Not constitutional (no longer a tax) • Not severable (entire law falls) • Stay of judgement ? Fifth Circuit Court of Appeals

28. Footer here

29. The ACA and Future Reform • Restore ACA provisions, encourage Medicaid expansion • Expand subsidies >400% FPL (e.g., 8.5% cap for all income groups) • Make subsidized coverage more generous (e.g, gold instead of silver) • Regulate out-of-network rates • Offer public plan in Marketplaces • Offer Medicaid buy-in to all • Move to single-payer – ACA funding shifted to new plan

30. Thank you!