Friday, September 29, 2017
Health Reform: Sabotage Edition
Health reform efforts currently are diversified into several strategic categories, including: (1) preserve and repair the ACA, (2) push for single-payer, (3) destroy the ACA by repeal, and (4) destroy the ACA by sabotage. I want to focus on the destruction strategies (3) and (4) because they are the most immediately relevant. With the failure of Graham-Cassidy this week, the ACA remains law of the land. Repeal-and-replace must wait, and collapse-and-replace is ascending. Beyond the notion that the ACA structure could simply be permitted to “implode” on its own, however, the Executive is ramping up ongoing efforts to sabotage it.
Efforts for destruction by repeal have been constant, flashy, and largely unsuccessful. Once Republicans regained a majority in the House in 2011, voting to repeal the ACA became such a thing that “efforts to repeal the Affordable Care Act” has its own Wikipedia page. Legislative repeal efforts since Republicans took the Senate this year have yet to land any blows to the ACA. Sabotage, however, has undercut implementation efforts vital to the ACA. It has stymied the universality of coverage rules, attempted to starve the exchanges of the subsidies that make insurance affordable, deterred people from buying insurance in the exchanges, and infected the individual market with chaos that deters insurers from participating and drives rates even higher.
From the beginning, litigation challenging the constitutionality of the law’s pillars – the individual mandate and Medicaid expansion – left the mandate intact, but the Medicaid expansion bruised and subject to undercutting by states. The Hobby Lobby litigation challenged the combination of the employer mandate and a coverage requirement for preventive services without a co-pay, resulting in a forced workaround for employees of for-profit, secular companies whose individual owners objected to offering health insurance for birth control on religious grounds. King v. Burwell challenged the ACA’s premium subsidies on a grammatical basis, but failed to remove this key part of the law and starve the market. House v. Price, in which the House of Representatives is suing to stop the subsidies for co-pays and deductibles based on appropriations, remains before the D.C. Circuit and could very well accomplish what King could not.
While litigation presents a visible, direct challenge, executive sabotage is both blatant and sneaky. The Administration begged states to apply for State Innovation Waivers (the big waivers I wrote about earlier). States complied and began seeking waivers to patch their insurance markets, using them to lower premiums with reinsurance. Now the Administration is dragging its feet in responding to waiver applications from Minnesota and Oklahoma, and has reneged on earlier assurances. This is a crucial delay at a critical time because the six-week open enrollment season, in which most individuals can buy insurance on the exchanges, is to start in one month.
Speaking of the mystical six-week open enrollment season, it is a prime target of sabotage. If things don’t go well with exchange sign-ups from November 1 to December 15, 2017, then the exchange markets edge closer to death-spiral. Within these six weeks, the exchanges must attract enough young, healthy people to their insurance pool to stabilize the rates. After the July repeal effort failed, the President threatened to “let Obamacare implode.” But HHS is going further, constructing obstacles to open enrollment by closing the exchanges for 12 hours on Sundays, curtailing outreach, and cutting its ad budget and spending some of the leftovers on negative ads about the ACA. Oh, and blowing a chunk of money on private jets for the Secretary. (UPDATE: Former Secretary as of minutes ago.)
The market sabotage contributes to rate increases in the policies offered on the exchanges. Insurers must predict how many people and medical claims they will have to pay in 2018 right now to determine their rates. If they collect too little, they face bankruptcy and regulatory intervention. If they collect too much and spend too little on claims, the ACA forces them to pay some of it back as a medical-loss ratio. The chaos of constantly shifting rules and priorities and the uncertainty of reimbursement generally drives insurers to gird themselves by proposing higher rates. Some insurers have pointed directly to the impact of sabotage on their rates.
Popular opinion favors taking steps to stabilize the ACA markets, rather than sabotaging them. (And, more urgently, to reauthorize the Children’s Health Insurance Program.) Senators Alexander and Murray are still plugging away at stabilization efforts, despite the ongoing sabotage. Hurting people so you can help them later is not a particularly winning strategy for legislation. Nor is it the usual mission of the U.S. Department of Health and Human Services. We'll shall see what the new Secretary will do.
Posted by Liz McCuskey on September 29, 2017 at 05:21 PM | Permalink