Throughout 2017, the Trump Administration has taken brazen action to sabotage the ACA and the health insurance markets that operate under the ACA’s rules. Funding for HealthCare.gov’s marketing and outreach has been slashed (nevertheless, a record number of people purchased coverage on the first day of open enrollment), and funding for cost-sharing reductions has been eliminated. A new executive order instructs federal agencies to draft regulations that will ultimately undermine the stability of the ACA-qualified insurance market.
And all of this comes after Republican lawmakers and governors spent the previous seven years sabotaging the ACA, and concurrently with Republican lawmakers’ protracted efforts to repeal the ACA in 2017.
That’s a lot to withstand, and it’s left the individual health insurance market on somewhat shaky ground. Quite a few insurers have opted to exit the exchanges or the entire individual market at the end of 2017 (although quite a few others are expanding or joining the exchanges for the first time), and pre-subsidy premium increases for 2018 are substantial.
But while the Trump Administration has been working to thwart the ACA, quite a few states have been taking action to shore up their individual markets and protect access to health care. Let’s take a look at what they’re doing:
Extended open enrollment
The duration of open enrollment for 2018 coverage has been cut in half, although that can’t be blamed entirely on the Trump Administration — the Obama Administration had already planned to move to that schedule in the fall of 2018; the Trump Administration just moved it up a year.
Under the schedule set by HHS, open enrollment for 2018 coverage will run from November 1, 2017 to December 15, 2017, with all plans effective January 1, 2018.
But nine of the states that have their own enrollment platforms have opted to extend open enrollment for 2018 coverage. Enrollment will begin on November 1 in all of them, but will end on the following dates:
- Connecticut: December 22 (for coverage effective January 1)
- Rhode Island: December 31 (for coverage effective January 1)
- Colorado: January 12, 2018
- Minnesota: January 14, 2018
- Washington: January 15, 2018
- Massachusetts: January 23, 2018
- DC: January 31, 2018
- California: January 31, 2018
- New York: January 31, 2018
In those states, people have extra time to enroll. Data from previous open enrollment periods indicates that the people who enroll on the later end of the window tend to be younger and healthier than those who enroll at the start of the window. This makes sense, as sick people are not likely to procrastinate when it comes to securing health insurance coverage.
So the longer open enrollment periods in those nine states are an effort to ensure that enrollment assistance isn’t stretched too thin, that as many people as possible can enroll, and that the individual market risk pool will be as stable and healthy as possible.
Adding the cost of CSR to Silver plans
Premiums for 2018 are going to be significantly higher than they would have been if cost-sharing reduction (CSR) funding had been committed early in 2017. And after months of dithering on the issue, the Trump Administration announced three weeks before the start of open enrollment that funding for cost-sharing reductions would end immediately.
But regulators in many states had already anticipated that move, and had taken action to protect the majority of their individual market enrollees from the fallout.
David Anderson, Charles Gaba, Andrew Sprung and I have been putting together a spreadsheet and a map that show which strategy — if any — each state has taken, and more details are available for most states on healthinsurance.org’s pages about the exchanges.
In general, states that directed insurers to add the cost of CSR to Silver plans have protected most consumers from the impact of the elimination of federal funding for CSR. Many states, including California, Pennsylvania, and Florida, have taken that strategy even further, by ensuring that there are off-exchange-only Silver plans that won’t include the cost of CSR in their premiums.
When the cost of CSR is added to Silver plan premiums, the result is larger premium subsidies for all enrollees who are eligible for premium subsidies. (Nationwide, 84 percent of exchange enrollees receive premium subsidies in 2017).
For people who don’t get CSR but who do get premium subsidies (ie, those with income between 250 percent and 400 percent of the poverty level), Gold and Bronze plans will end up being an even better value in states where the cost of CSR has been added to Silver plans.
For people who buy off-exchange coverage, Bronze, Gold, and in some cases, “extended Bronze” plans are available in most states without the cost of CSR added to the premiums, and off-exchange-only Silver plans are also available in many states without the cost of CSR added to the premiums. (It’s essential to carefully comparison shop, though, especially if you’re considering a Silver plan and don’t get premium subsidies.)
In short, states had the option to take action to ensure that most consumers would be unharmed by the CSR funding cut. Many did so by late summer, and others made last-minute changes to rates after the Trump Administration clarified that CSR funding would not continue.
Establishing reinsurance programs
On President Trump’s first day in office, he weakened the ACA’s individual mandate with his first executive order, creating the perception that the individual mandate would no longer be enforced. (To the extent that it can be enforced, the enforcement has actually remained unchanged — but perception is key, and the uninsured rate has spiked upwards in Trump’s first several months in office.)
A perceived weakening of the individual mandate is destabilizing to insurance markets. But reinsurance is an effective means of stabilizing the individual market, and can provide a counterbalance to the Trump Administration’s efforts to undermine the ACA.
Nationwide, there are about 16.5 million people in the ACA-compliant individual market. But since each state’s individual market is separate from all the others, most of them have fairly low total populations.
So it doesn’t take very many high claims to destabilize a state’s individual market, since the premium increases necessary to cover claims can result in coverage becoming unaffordable for healthy, unsubsidized enrollees, who then leave the market, further exacerbating the problem.
The ACA included a reinsurance program, but it was temporary and only lasted through 2016. So some states have set out to create their own reinsurance programs, using 1332 waivers so that they can fund reinsurance with the federal money that would have otherwise been spent on larger premium subsidies.
The result is fairly minimal state spending and unchanged federal spending, but lower premiums that result in more people being able to afford coverage.
- Alaska established a reinsurance program for 2017 with state funds, and received approval in July for five years of federal funding to keep it going. As a result, average premiums in Alaska are declining by more than 20 percent in 2018, despite the fact that the cost of CSR has to be added to the premiums.
- Minnesota established a reinsurance program to take effect in 2018, and received approval for federal funding in September. However, Minnesota’s reinsurance funding approval came with a funding cut for MinnesotaCare, the state’s Basic Health Program. The state accepted the money for the reinsurance program, and is continuing to negotiate on the MinnesotaCare funding.
- Oregon also established a reinsurance program, and their request for federal funding was approved in October 2017. The state credited the new reinsurance program with keeping rate hikes for 2018 in the single-digit range, but after the Trump Administration cut off CSR funding, the Oregon Division of Financial Regulation announced that Silver plan rates would have to increase by an additional 7.1 percent to cover the cost of CSR. However, rates for 2018 would have been 6 percentage points higher without the new reinsurance program.
- Iowa also submitted a 1332 waiver proposal that would have created a reinsurance program along with a variety of other changes to revamp the individual health insurance system in the state and reduce premiums. Some of the provisions were controversial, and it was unclear whether HHS would approve the waiver — they had not done so as of late October. At that point, however, Iowa withdrew their waiver proposal.
- Oklahoma also tried to establish a reinsurance program, and calculated that rates for 2018 would have been 34 percent lower than 2017 rates. But they were relying on federal funding and the waiver approval process didn’t happen quickly enough for the program to be implemented by the time rates for 2018 had to be finalized, so Oklahoma also withdrew their waiver proposal. The state may try again in the future, and has far-reaching plans to overhaul their individual market using 1332 waivers.
Codifying contraceptive coverage
In October, the Trump Administration announced new regulations — effective immediately — that grant employers wide-ranging access to exemptions from the ACA’s requirement that health plans cover all FDA-approved contraceptives for women.
Throughout 2017, Republican lawmakers have tried to modify the ACA provision that requires all individual and small-group major medical plans to cover the essential health benefits. To varying degrees, they want to allow the sale of less robust coverage again, and put the onus on the consumer to choose well.
One of the ACA’s essential health benefits is preventive care, which includes full coverage for at least one form of every FDA-approved female contraceptive method. This requirement remains in force, as none of the 2017 legislative efforts to repeal or change the ACA have been successful.
The Trump Administration implemented regulations in October 2017 that broaden the ability for employers and universities to obtain exemptions from the requirement that their health plans cover contraceptives, and Republican lawmakers have tried repeatedly to advance legislation that would allow individual market plans to be sold without contraceptive coverage.
But more than half the states have some sort of regulations in place that require contraceptive coverage, in some cases without a copay. Here are some examples of the steps states have taken to enhance and protect access to contraception, regardless of federal actions:
- For nearly two decades, Hawaii has required state-regulated, employer-sponsored plans to cover contraceptives. And in 2017, the state implemented a new law that allows pharmacists to prescribe and dispense 12 months of birth control.
- Oregon passed a law in 2017 (effective in 2019) that requires all state-regulated plans to cover contraceptives at no cost (including vasectomies, which are not required to be covered under the ACA), and also to cover abortions.
- Nevada enacted a law in 2017 that requires Nevada Medicaid and all state-regulated plans to cover birth control with no copay, and authorizes pharmacists to dispense up to 12 months of birth control at a time.
- New York’s Governor, Andrew Cuomo, took regulatory action in 2017 to require contraceptive coverage on all state-regulated plans, along with coverage for medically-necessary abortions.
- A law that took effect in 2016 in Vermont requires insurers to cover FDA-approved contraceptives (including vasectomies) with no copays, and allows women to obtain up to 12 months worth of birth control at one time.
- Maryland enacted legislation in 2016 (effective in 2018) that requires coverage for FDA-approved contraceptive (including vasectomies and emergency Plan B contraception) with no copays. It also eliminates prior authorization requirements for long-acting reversible contraceptives (IUDs and implants) and lets women obtain up to six months worth of birth control at one time.
Although the battle over the ACA is likely to be protracted and messy, states have the ability to protect their residents to some extent. Consumers can and should contact their federal representatives to have conversations about health care reform, but they can also reach out to their local leaders to express opinions about strengthening consumer protections at the state level.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.