With open enrollment for the Health Insurance Marketplace starting on November 1—exactly one week before Election Day—and with UnitedHealthcare and Aetna pulling out of the exchanges in many markets, a core element of the Affordable Care Act may be headed for the dustbin of history.
The blame game is going full tilt. One of the boldest plays came when five senators sent Aetna CEO Marc Bertolini a letter accusing the company of pulling out of the exchanges to pressure the Justice Department to approve its merger with Humana. There also has been talk in capitol corridors about what might be done to repair the teetering ACA exchanges in the next Congress.
Of course, what will happen depends on what many are describing as a dumpster fire of an election with little enthusiasm for either candidate. A Pew Research Center survey in September found that far more respondents felt frustrated (57%) or disgusted (55%) by the election than interested (31%), optimistic (15%), or excited (10%).
A President Hillary Clinton and a Republican Congress could prolong Washington’s inertia while Clinton’s HHS works out administrative tweaks to the ACA. Perhaps President Clinton and a Republican Congress might rouse themselves from Beltway stasis and cobble together some legislative remedies. A third possibility and a long shot at best, Clinton and a Democratic Congress could collaborate on ACA remedies.
President Donald Trump and a Republican Congress would undoubtedly set about to dismantle the ACA and replace it with other means for covering Americans that would likely rely on the private market. But all the talk about dismantling the ACA on Day 1 notwithstanding, undoing the law would be a long process. Furthermore, the de-ACA-ing of American health care would depend on Trump working with Congressional Republican leaders, who have embraced their nominee with all the enthusiasm of a kid given a pet rattlesnake.
Congress could put together an ACA fix, as it did in passing MACRA legislation last year to fix physician reimbursements, says Leighton Ku, a professor at the Milken Institute School of Public Health at George Washington University. “From a budget perspective, that was a much bigger deal than we’re talking about with the exchange problems,” he says, “but it was something where after many years of frustration people decided they could just agree. So that’s what might happen in this coming term.”
Says Mark Hall of Wake Forest University School of Law: “If there’s political willingness, then there’s a lot of things that could be done, starting with the public option.” A contentious election like this can do a lot of things to either strengthen or weaken political will, says Hall.
“Of course, the market would work better if we had stronger risk protection mechanisms, but I think it’s still possible that the market will work OK without a couple of them,” says Mark Hall of Wake Forest University School of Law.
Still, a public option might be too heavy a lift for Clinton and the Democrats. If they prevail in the election, it probably won’t be by much. Smaller efforts that could generate bipartisan support—like fixing reinsurance for exchange plans or tweaking individual mandate requirements—might be more realistic, especially if the purveyors of Congressional intransigence are left feeling somewhat burned after this election.
Ku says the departures from the ACA exchanges need to be kept in perspective. Sure, UnitedHealthcare and Aetna are big players in the health insurance industry as a whole. But they may be small potatoes on the exchanges they’re pulling out of, Ku says.
Moreover, says Ku, the whole idea of the exchanges was to shake out less competitive plans. Ku sits on the board of the District of Columbia exchange and has seen how plans make business decisions with regard to their participation. “My impression is that if you’re an insurer that has a large volume, you don’t want to discontinue that line,” he says.
The exits can cause a problem when only two or three plans—or, worse, one or none—participate in an exchange. But before the ACA, in most markets, consumers had a few individual plans to choose from, Ku says.
Departures from the ACA exchanges need to be kept in perspective, says Leighton Ku, a professor at the Milken Institute School of Public Health at George Washington University. Some of the big players who’ve left may be just small potatoes on the exchanges they’re pulling out of.
In other words, we may return to baseline, which isn’t great, but it isn’t a total disaster, either.
The ACA had some mechanisms that were supposed to keep the exchanges healthy and keep a decent number of health plans participating.
To say that the co-op plans have struggled is an understatement. Only six of the original 23 co-ops are still in business. The co-ops were devised as a substitute for a full-fledged public option and were one of the many compromises made in passing the ACA. The co-ops had troubles before, but some say they went from serious to dire last year when Congress made risk corridors budget-neutral. Those corridors were supposed to give co-ops a financial cushion.
The ACA also created a temporary reinsurance program for plans on the exchanges that are not co-ops. Billions have paid out. The program is scheduled to end this year.
Extending reinsurance could get a fresh look once the election smoke clears, Wake Forest’s Hall says. “It’s worth asking do we perhaps need it for a couple more years. It might be taking longer than we first thought for this market to mature due to some of these disruptions,” he says. Reinsurance is a fixture in Medicare Part D.
The exchanges are an essential element in achieving universal or near-universal coverage, says Commonwealth Fund Vice President Sara Collins. “To the extent that policymakers share that view, there will need to be stabilizing options, and extending the reinsurance program could have bipartisan support because it is budget neutral,” she says.
When CMS issued a report in August that claimed the risk pool in the individual market was improving, AHIP CEO Marilyn Tavenner shot back with a rebuttal. “The reality is that the risk pool has not significantly improved,” she said. Among her ideas for fixing the risk pool: revising accounting regulations to include partial-year enrollments and prescription drug data; tightening requirements for special enrollment periods; and expanding outreach to draw more of the uninsured into the market.
It seems CMS listened to its former administrator in proposing rules for 2018. Those rules incorporated her ideas, along with a transfer mechanism to spread the risk of high-cost enrollees.
Hall suggests other ACA fixes that could improve risk on the exchanges: “Toughening up the individual mandate—maybe increasing the penalty from $700 to something with a little more bite—or changing the rule that lets you come back into the market any time you want; that is, if you don’t buy insurance when you’re eligible, you have to sit out for a period of time.”
The exchanges might also benefit from experience. The ACA provision that grandfathered noncompliant plans will sunset in 2019, which will send in a new group of buyers. “They are likely a healthier group of people since they were underwritten in their plans, so that could also have a potentially significant effect on both the risk pools and enrollment,” says Collins of the Commonwealth Fund.
And actuaries have more historical data to draw on for their risk projections. “Perhaps there’s less need for those risk mechanisms than there was at the beginning of the exchanges,” Hall says. “Of course, the market would work better if we had stronger risk-protection mechanisms, but I think it’s still possible that the market will work OK without a couple of them.”
What if the political will to fix the ACA doesn’t coalesce? The individual market could end up looking a lot like it did before 2010. But even that might not be so straightforward, as Ku of George Washington University points out. “There aren’t preexisting condition exclusions anymore,” Ku says. Trump has said while he would scrap the ACA and the individual mandate, people with preexisting conditions would still be able to get health insurance. So it seems that no matter who emerges from this dumpster fire of election, the ban on denying coverage because of preexisting conditions may survive.