How the Trump administration handled the ACA marketplace, Part 3: Regulation

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This post is Part 3 of an assessment of Trump administration policy with respect to the ACA, most specifically the ACA marketplace. Part 1 overviewed the administration’s early encouragement of state reinsurance programs, Trump’s cutoff of direct reimbursement of insurers for Cost Sharing Reduction subsidies, and the defunding of the Navigator enrollment assister program, paired with considerable support for health insurance brokers.

Part 2 reviewed the effective repeal of the individual mandate penalty, paired with regulations designed to boost an alternative market of ACA-noncompliant plans. Here, we’ll look at how Seema Verma’s CMS loosened rules for insurers and tightened them for marketplace applicants.

How the Trump administration handled the ACA marketplace, Part 2

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The Trump administration stretched the clock for short-term, limited duration health plans

This post is Part 2 of an assessment of Trump administration policy with respect to the ACA, most specifically the ACA marketplace. Part 1 overviewed the administration’s early encouragement of state reinsurance programs, Trump’s cutoff of direct reimbursement of insurers for Cost Sharing Reduction subsidies, and the defunding of the Navigator enrollment assister program, paired with considerable support for health insurance brokers.

Below, we’ll look at the effective repeal of the individual mandate penalty (the one legislative initiative considered), and regulations designed to boost an alternative market of ACA-noncompliant plans.

As each part keeps ballooning as I write it, we’ll leave other administrative changes, loosening requirements on insurers and tightening them on prospective enrollees, to a Part 3.

Zeroing out the individual mandate penalty. After the Republican Senate in the summer of 2017 declined to take up the ACA “repeal and replace” bill passed by the House and then failed to pass its own repeal/replace alternative, John McCain famously scotched a final attempt to pass a “skinny” repeal bill that would have simply repealed the individual mandate and brought the Senate into conference with the House, perhaps to make one more run at a more comprehensive repeal/replace alternative. Following those failures, Republicans reduced the mandate penalty to zero in their massive tax cut bill passed in December 2017.

As an expression of intent to dismantle the ACA, the zero-penalty mandate’s chief function was to enable Republicans’ final attempt to void the ACA through the courts. In February 2018, a group of 20 states, led by Texas, sued to have the mandate declared unconstitutional, and the entire ACA statute voided. The suit sought ACA nullification on the ridiculous grounds that a) the 2012 Supreme Court decision upholding the constitutionality of the mandate did so only on the basis that the mandate is a tax, and within Congress’s taxing power; b) a zeroed-out mandate is no longer a tax; and c) since the Democratic Congress passed a resolution in 2010 declaring that the mandate was an “essential part” of the ACA’s overall “regulation of economic activity,” the whole law (including myriad parts unconnected with the ACA marketplace) had to be vacated. In June 2021 a 7-2 Supreme Court majority dismissed the suit, finding that the plaintiffs did not have standing because no one was harmed by a $0 penalty. The litigation did enable the Trump administration, 20 Republican attorneys general, and 126 House Republicans who signed an amicus brief in support of the plaintiffs to display root-and-branch opposition to the ACA for another three years after the legislative repeal drive failed.

Negation of the mandate was expected to drive healthier enrollees out of the market, raising premiums and thus further reducing enrollment. In 2019, CBO forecast (p. 11) that the $0 mandate penalty would increase the uninsured population by 7 million, or a bit more than 2%, and reduce marketplace enrollment by 4 million.

How the Trump administration handled the ACA marketplace, Part 1

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In the wake of Trump’s vow to repeal the ACA if elected, Larry Levitt, Kaiser Family Foundation, outlines the former president’s past and purported future healthcare agenda.

One of Trump’s biggest political failures as president was his inability to persuade Congress to repeal the Affordable Care Act (ACA). However, the Trump administration did make significant changes to the ACA, including repealing the individual mandate penalty, reducing federal funding for consumer assistance (navigators) by 84% and outreach by 90%, and expanding short-term insurance plans that can exclude coverage of preexisting conditions. And, the Trump administration supported an ultimately unsuccessful lawsuit to overturn the ACA.

In one of the stranger policy twists, the Trump administration ended payments to ACA insurers to compensate them for a requirement to provide reduced cost sharing for low-income patients. At the time, Trump said this would cause Obamacare to be “dead” and “gone.” But, insurers responded by increasing premiums, which in turn increased federal premium subsidies and costs to the federal government, likely strengthening the ACA.

In the current campaign, Trump has vowed several times to try again to repeal and replace the ACA, saying he would create a plan with “much better health care.”

Trump certainly meant harm to the ACA. His comments in the wake of abruptly cutting off direct reimbursement of insurers for the value of Cost Sharing Reduction, cited by Levitt above, show his intent, as does his pressure on Republicans in Congress to pass legislation gutting its core programs. Should Trump regain the presidency, there is no question that he will pursue the agenda that Levitt outlines in his conclusion, including the ACA-related parts:

Trump’s record as president from 2017 to 2021, combined with recent comments on the campaign trail, suggest he would pursue policies to weaken the ACA, reduce federal spending on Medicaid, restrict access to abortion and family planning, and scale back benefits for immigrants if reelected as president in 2024.

Moreover, should Trump regain the presidency, he would lead a Republican party even more subservient to his will than in his first term. A Republican Congress would almost surely roll back the ACA Medicaid expansion and impose sharp spending caps on surviving Medicaid programs, as well as deregulating and largely defunding the ACA marketplace, as failed Republican legislation aimed to do in 2017. Should Democrats control one or both houses of Congress, an HHS Department filled with MAGA partisans, in line with plans currently being laid by well-funded right-wing organizations like the Heritage Foundation to root out technocratic expertise and install Trump loyalists at every level in all federal departments, would doubtless pull out all stops to undermine the marketplace and reduce Medicaid enrollments.

In Trump’s first administration, his appointments to HHS and CMS also were hostile to the structure of the ACA marketplace and the Medicaid expansion. Most notably, CMS administrator Seema Verma encouraged states to impose work requirements on “non-disabled, working age Medicaid enrollees — with some success, although the measures were largely checked by the courts. She also pushed states to conduct more frequent income and eligibility checks on Medicaid enrollees, encouraging the kind of procedural disenrollments (often of people who never received demands for information) now plaguing the post-pandemic Medicaid unwinding. '

But Verma and HHS Secretaries Tom Price and Alex Azar were also more constrained by conventional political incentives and the needs of corporate, state and individual constituents than their successors in a second Trump administration would likely be. The administration’s record with respect to ACA marketplace administration was mixed. Some measures harmed product quality and enrollment; some measures boosted enrollment and retention.

Unkind unwinding: Health Policy Valentines 2024

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In a year of existential threats, and an era in which the corporate practice of medicine knows few curbs, there is still a stream of health policy wins worth serenading in the time-honored (since 2012!) tradition of #HealthPolicyValentines. This year’s mash notes below.

In a year of existential threats, and an era in which the corporate practice of medicine knows few curbs, there is still a stream of health policy wins worth serenading in the time-honored (since 2012!) tradition of #HealthPolicyValentines. This year’s mash notes are below.

The Medicaid unwinding
is often blind and cruel.
But spare some V-day love
For ex parte renewal.

* * *

A valentine from Democrats,
enacted, but hardly trending:
An annual Part D cap
on out-of-pocket spending.

* * *

What’s sweeter for seniors
than sugar and spices?
Medicare negotiating
selected drug prices.

* * *

Send flowers, chocolate and smiles
for keeping insurers squirmin’
over AI-driven denials
to Casey Ross and Bob Herman.

* * *

---

O ACA, flawed child,
I’ll no longer carp
so long as your subsidies
remain enhanced by the ARP.

* * *

For low-income tar heels,
nothing can be finer
than Medicaid expansion
in North Carolina.

* * *

Let’s honor legislation
little known, in point of fact,
preventing harm, unnoticed:
The No Surprises Act.

* * *

As oligarch-funded theocrats
harm the women of this nation,
my love goes to the National
Abortion Federation.

* * *

And one for my wife as I join her on the far side of the age-65 threshold:

After 40 years of love
we’ll take no crap
from MA insurers —
thanks to Medigap.

* * *

While dredging up healthcare doggerel like this, I always end up with some bitter snippets, then remind myself they’re not um, valentines. Since they now exist, however, and at the risk of spoiling the mood, I’ll share a little rage rhyming:

The Supreme Court’s out of control,
but had better not go postal
by voiding the FDA rule
for Mifepristone and Misoprostol.

* * *

Nothing’s more dangerous
for those with colon polyps,
financially speaking,
than private equity rollups.

Take a trip down ACA memory lane with a visit to the Health Policy Valentines archives: Surprise! No Surprises (2023), Flowers in the graveyard (2022), Institutional edition (2021), But love grows old and waxes cold (2020), The Water is Wide: Health Policy Valentines (2019),  HPV (2018), Love Knows No Repeal (2017),  Love in the Time of Obamacare (2016), love, 2015, and Romance of the Rose, Health Policy Edition (2014).

Photo by Aykut Aktemur