September 6, 2017

Trump Continues Sabotaging the Most Centrist Part of the ACA

Slashing Funds for Outreach and Enrollment Assistance Is Latest Action to Put Insurance Marketplaces at Grave Risk  

Since Congress failed to pass a bill repealing and replacing the Affordable Care Act (ACA), Republican lawmakers have been in a quandary.  Because they have been predicting for so long that the ACA was going to fail, some Republicans seemed to be determined to make that happen. However, others realize that the part of the law they can sabotage – the subsidized marketplace for private insurance – is critically important for millions of Americans and also a centrist approach for increasing access to health care.

President Trump has wavered at times on what to do about the ACA marketplace, but actions he took last week indicate that he is once again trying to fulfill his prophecy that the marketplace will collapse. The latest evidence came on Thursday when the Trump administration announced the following in a memo from the Centers for Medicare and Medicaid Services (CMS):

  • Funding for educational activities for the next open enrollment period will be slashed by 90% – from $100 million last year to just $10 million this year.
  • Federal funds for “navigators” – who help people understand their insurance options and sign up for coverage – will be cut by about $27 million next year, a reduction of more than 40%.
  • The largest cuts in grants to navigators will be for those who fell short of their enrollment goals last year, which will penalize the organizations that set the loftiest goals.

These cuts came as a shock to grantees like Covering Wisconsin, who may soon have to lay off some of their staff who had been gearing up for the next open enrollment period. [Sept. 8th update: Read more about the uncertainty and potential layoffs in Wisconsin in this Vox article: This is the most brazen act of Obamacare sabotage yet.]

The latest cuts are likely to do substantial damage to the health of the marketplace because of a decision made by the Trump Administration earlier this year to cut by 50% the length of the next open enrollment period.  The combination of a much shorter sign-up period and sharp reductions in funding for navigators and advertising is likely to significantly reduce enrollment, and that prospect could cause more insurers to decide to drop out of the marketplace.

The Center on Budget and Policy Priorities has been keeping track of the actions taken by the Trump Administration to undermine the ACA.  They have been adding frequently to their “Sabotage Watch” webpage, which has a long and rapidly growing list of “actions that would sabotage the ACA by destabilizing private insurance markets or reversing the law’s historic gains in health coverage.” Many of those actions relate to the President’s refusal to commit to continuing the funding for cost sharing reductions (CSRs) that make the copays and deductibles much more affordable for about half of marketplace participants.

The unpredictability caused by both the Trump administration and Congress creates significant risks for insurers participating in the Marketplace, and those risks have caused some insurers to drop out and many others to raise their proposed 2018 rates for marketplace plans.  For example, when Anthem announced in early June that it would exit Ohio’s marketplace, it pointed to the uncertainty around whether CSRs would be paid and an “increasing lack of overall predictability (that) simply does not provide a sustainable path forward to provide affordable plan choices for consumers.”

It’s important to keep in in mind that the ACA marketplace is a bipartisan approach that was pioneered in Massachusetts as a central part of their highly successfully health care reform law, sometimes referred to as RomneyCare. The broad backing for this free-market approach makes it ironic that politicians like President Trump, who have stated repeatedly that the ACA will fail, seem to be doing their best to make the insurance marketplaces collapse.

A marketplace collapse would be especially problematic in Wisconsin because Governor Walker and Republican legislators used the existence of the ACA marketplace and its sliding-scale subsidies as a rationale for cutting in half the income eligibility ceiling for adults in BadgerCare.

The path forward for Republican lawmakers who promised to repeal the ACA has been complicated by the fact that the law has steadily become more popular this year. A very large percentage of Americans want the ACA to be improved or repaired, not abandoned. If the actions taken to sabotage the marketplace succeed, and the majority party has failed to come up with a viable replacement plan, there will be a significant political price. Many voters will probably blame Republican lawmakers for actively working to undermine the law, and others will blame them for failing to take corrective action.

Those political realities help explain why there has been growing bipartisan interest in trying to protect the ACA marketplace by passing short-term measures that will stabilize it, such as providing concrete assurances to insurers that the funding for cost-sharing reductions will continue.  Congress needs to pass legislation along those lines by September 27, when insurers have to finalize their rates for 2018.  And while they are at it, legislators should undo the cuts in funding for outreach and enrollment.

It remains to be seen whether bipartisan legislation to stabilize the ACA marketplace will be allowed to move forward, or whether it too will be sabotaged by the President and other lawmakers who are committed to the proposition that the ACA will fail.

Jon Peacock

One Comment on “Trump Continues Sabotaging the Most Centrist Part of the ACA

[…] very quickly by proposed legislation and budget changes being considered by Congress, and by the President’s actions to sabotage the ACA. An analysis by the Congressional Budget Office showed that proposed changes to Medicaid and […]

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