WASHINGTON — The Trump administration revealed this week that it could try to take one more shot at weakening the Affordable Care Act’s individual markets before the end of Trump’s first term.
A request for comment on a proposed rule change posted late Thursday contemplates a series of changes that would save the government $1 billion per year or more, but result in higher premiums and more people being uninsured.
“This proposed regulation signals that the administration is not done working to undercut the ACA,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation.
The document is only an early-stage call for feedback, and any concrete actions would come months later. If the administration does pull the trigger it would be making highly controversial changes heading into an election year. Democrats are already accusing Trump of “sabotaging” the markets with “a health care tax on patients and families” just for floating the ideas.
Among the proposals are three major policies that are either being proposed or could be inferred from the document. One proposal would change how ACA subsidies are calculated, leading to lower subsidies and higher premiums on the individual market. Other ideas broached but not explicitly proposed are ending automatic renewal of Obamacare plans and killing the workaround that has largely held the individual markets together.
The change to calculating premiums alone would save the government $1 billion per year by 2022, according to the administration’s estimates, but individual market premiums would rise by $181 million per year. The government’s savings would largely come from 100,000 fewer people signing up for insurance, so fewer people would need to be subsidized.
The administration has taken several steps to weaken the Obamacare markets since, mostly by opening up access to cheaper-but-skimpier unregulated, off-market health plans. But Obamacare has proved resilient, in large part because the states have stayed a step ahead.
When the Trump administration killed federal subsidies that helped pay for Obamacare insurance plans, the states used a process called “silver loading” to replace the subsidies with tax credits. This essentially negated the Trump administration’s action.
They did this by parking all of the increased costs from the loss of premiums on “silver”-level Obamacare plans. This triggered a corresponding increase in tax credits. Essentially, they swapped one subsidy program for another. It was an ad hoc solution never intended by the drafters of the Affordable Care Act, but, then again, killing the subsidies was never intended either.
But now the administration is signaling it may try to end silver loading. Doing this on its own would lead to a major jump in premium costs and could badly destabilize the markets.
The administration says it wants to kill silver loading in concert with Congress voting to bring back the old subsidies. However, Congress has so far shown a complete inability to come together to pass a bill to improve the Obamacare markets. The administration did not specifically say it will act without Congress, but it did so with premiums in the past and is asking for feedback on how it should “address” the issue of silver loading.
The Trump administration could ultimately pursue all of these ideas or none of them.
“It’s hard to know at this point. Some of the more aggressive options that they’re seeking comments on — including killing both automatic renewal and silver loading — are offered in tentative terms, suggesting that the administration might not be committed to following through,” said University of Michigan Law professor Nicholas Bagley.
“Then again, there are zealots in the White House who want to do everything in their power to hurt the ACA, and they may win the eventual argument over what to do.”
The Trump administration is also arguing in court that the ACA is unconstitutional. A federal judge in Texas sided with the White House and 20 Republican-led states vying to have the law thrown out. The decision is being appealed and could ultimately make its way before the Supreme Court.
Another proposal contained in the rule change would require health insurers that offer plans covering abortion coverage to provide “mirror” plans that do not cover abortion services. Another proposal would lower the marketplace user fees paid by insurers and often passed on to customers in higher premiums.