As we all remember well, Donald Trump and the Republican Party failed to repeal the Affordable Care Act via legislation. As we also know, certain unrelated legislation, as well as various executive actions taken by the White House, have put the imprint of GOP-style government on our already strained health insurance market.
So far, the effects of these actions have been limited – but only because many of the major changes were delayed until 2019. With the 2019 non-group insurance cycle (participation, requested premium increases, approved premium increases, formal offerings, open enrollment) launching now, we can start to have an idea of what the future looks like. Needless to say, it is not “a lot less expensive” or “insurance for everybody” or “no cuts to Medicaid”; instead, people “will lose coverage” and “be worse off financially.” Trumpcare has not led our country “taking care of everybody.”
When considering Trump’s effects on the health care system, the most important action to consider is the end of the individual mandate, included as a “feature” in the Jobs Cut and Tax Act. The least (and only) unpopular portion of the ACA, GOP leader hailed the end of the mandate as a victory for consumer choice and freedom. On top of that, they claim, the ACA’s individual mandate didn’t even work.
We’ve talked before about why choice in health insurance is necessarily an illusion, but I ran into some charts from the Brookings Institution that provided facially convincing evidence that the ACA’s individual mandate is decreasing the uninsured population. We know that the number of people without insurance decreased massively due to the ACA, but it is difficult to determine which of the law’s features resulted in this. However, for households earning over 400% of the federal poverty line, there were no subsidies to buy health insurance, only mandates. If the rate of uninsured decreased among this group, this would be a strong piece of evidence in its favor among all groups of people. Low and behold:
In case this evidence isn’t enough, the fact that one out of fifty states already had an individual mandate offers a natural experiment. If the mandate was the driver of higher insurance rates for higher earners, we would expect no decreased in the uninsured in this group in Massachusetts. And, as we see:
Of course, in this type of analysis, it is impossible to “prove” anything; as we always say, health care markets are super complex, and all the features interact. But until somebody can explain this data with another hypothesis, I’m just going to come out and say it: the individual mandate did what it was supposed to do.
With strong evidence to support the value of the mandate, insurance consultant Milliman has just produced a new analysis of likely trends in insurance premiums for the next three years (note: the analysis was run by Milliman, but sponsored by Covered California, the state-based marketplace). What they found is what we would expect; the elimination of the individual mandate will cause premiums to increase by 2.5-15% per year, on top of other premium increases. All told, they expect Trumpcare premiums to increase by 36-94% or more, compared to less than 25% without the Trumpian actions. Even worse, the damage is going to be highly dependent on local issues; 17 states have a high risk of 3-year premium increases of greater than 90%. In these states, I would expect the unsubsidized, non-group insurance markets to largely disappear, while federal costs increase due to higher subsidies for households below 400% of the poverty line. Higher cost to cover fewer people – it’s the Trump University of a health care system.
At this point, I’m very pessimistic about the GOP’s ability – or is it willingness? – to do anything about the mess they’ve created. There is talk out there about a Republican fix, but my read of it is that it would do more harm than good. At this point, funding CSR subsidies would likely do as much harm as good. However, in exchange for doing so, the GOP is demanding further defunding of the ACA health insurance exchange budgets and bringing abortion politics into the mix. They also want to allow states more waivers to eliminate ACA’s protections for pre-existing conditions and essential health benefits.
On the other hand, as we know, the Democrats are quickly lining up behind a plan that expands on the good of the ACA, while also addressing its flaws, increasing coverage while reducing overall health care spending. Anybody who is serious about following through on all of Donald Trump’s campaign-trail promises should be looking closely at Medicare Extra for All. So far as I know, not one Republican has done so.