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Four Issues for Trump, Now That the ACA Remains the "Law of the Land"


Questions about cost-sharing subsidies, risk corridors, and what to do about red state Medicaid expansion will confront the Trump administration no matter how much the president wants to move on to other issues.

With House Republicans unable to muster the votes Friday to repeal and replace the Affordable Care Act (ACA), the question becomes, “What now?"

From President Donald J. Trump to House Speaker Paul Ryan and beyond, Republican statements Friday suggested there was some sentiment to let the ACA collapse, forcing Democrats to the bargaining table. Democrats say that is risky, and over the weekend said they were willing to fix the ACA.

“I don’t know what else to say other than Obamacare is the law of the land,” Ryan said at a press conference Friday. “We’ll be living with Obamacare for the foreseeable future.”

While conservative Republicans were unhappy that the American Health Care Act (AHCA) did not represent a full repeal of the law they call “Obamacare,” they had other complaints. The bill, they said, did nothing to control rising premiums and out-of-pocket costs. Already, Democrats and other experts are pointing to steps that could be taken now to deal with this problem, which some say Republicans inflicted on themselves while settling the 2015 budget.

Whether Republicans decide to work with Democrats on ACA repairs or allow the individual market to collapse, healthcare isn’t going away as an issue. Some things will confront the Trump administration right away:

Cost-sharing subsidies. Former HHS Secretary Tommy Thompson, who served under Republican President George W. Bush, warned on CNBC that letting the ACA implode would be a “catastrophe” for people who get coverage on the exchanges. Thompson pointed to the same short-term issue noted in a Sunday op-ed in USA Today by former CMS Acting Administrator Andy Slavitt: the Trump administration needs to state what it’s doing about the cost-sharing subsidies in the current law, and it has to do this soon.

The problem with inaction. There have been suggestions that HHS Secretary Tom Price, MD, could wreak havoc on the ACA by failing to enforce its regulations. Slavitt warns against this, and notes in particular that failing to enforce the individual mandate won’t stabilize the market. Elsewhere, there are signs that a sabotage posture carries genuine risks: on Friday came word that the HHS Inspector General would investigate a decision in the final days of open enrollment to cancel parts of an advertising and marketing plan aimed at wooing last-minute sign-ups. Historically, these last-minute enrollees are healthier and improve the risk pool; Republicans may pay a price if the investigation or insurers tie this move to higher rates for 2018.

Risk-corridor lawsuits. More is being written about these lawsuits, including one granted class-action status, from insurers who were not paid monies owed under the ACA’s risk corridor provisions. Republicans slipped a provision into a giant 2015 spending bill that blocked CMS from paying out $2.5 billion to insurers who took on more risk and cared for sicker patients. The fallout forced insurers to raise premiums the next 2 years and pull out of many areas, mostly in states without Medicaid expansion. Insurers have scored some victories in these suits, which argue that the ACA language amounts to a contractual obligation to make these payments. This month, Blue Cross Blue Shield affiliates in Alabama and Tennessee joined the fray.

More Medicaid expansion. Slavitt predicts that the demise of the AHCA will push more conservative states toward extending benefits to the working poor, not only to get available federal matching funds but because premiums in expansion states are 7% lower on average. HHS would have to decide if it wants to reject requests from conservative states like Kansas, which is moving toward expansion.

Slavitt, in his op-ed, argues that an ACA provision taking effect this year, called the “super waiver,” gives HHS broad powers to work with states to improve competition or create backstops for claims above a certain threshold, as Alaska has done.

The super waiver, Slavitt writes, could “allow states to pursue different approaches, including those more suited to their political philosophy, so long as they continue to meet the basic aims of covering people with high-quality coverage.”

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