Long before he was elected president, Donald Trump called the Affordable Care Act a “disaster.” Since taking over the White House, he repeatedly said the landmark health insurance law, derisively called Obamacare, is in a “ death spiral.” Republican leaders in Congress, intent on repealing the ACA, speak of it in the same dire terms.
It has long been clear that it is the uncertainty around the future of the ACA, which Republicans have been trying to repeal for seven years — not the law itself or its requirements — that is responsible for the rising costs and departure of companies from the individual insurance market.
Now there’s a new source of data concluding that the ACA is working as intended, and it comes from the Trump administration itself.
In short, the federal Centers for Medicare and Medicaid Services, or CMS, concluded that the elements included in the law to mitigate risks for health insurers are working as intended and that the individual market, which is governed by the ACA, is stable. In fact, the market grew last year, CMS, which is part of the federal Department of Health and Human Services, said in a report released June 30.
“The transitional reinsurance and permanent risk adjustment programs functioned smoothly for the 2016 benefit year, as the Patient Protection and Affordable Care Act compliant market continued to grow,” the report said.
Transitional reinsurance and the permanent risk adjustment are portions of the ACA that help ensure insurance companies enroll high-cost patients by distributing money from plans with a lot of healthy enrollees to plans with too few and by covering some of the costs of patients with very high health care needs.
“Both the transitional reinsurance program and the permanent risk adjustment program are working as intended in compensating plans that enrolled higher-risk individuals, thereby protecting issuers against adverse selection within a market within a state and supporting them in offering products that serve all types of consumers,” the report said.
Under the ACA, each enrollee is issued a risk score, based on age, sex and health conditions. In its report, CMS said there were many reasons to expect risk scores to rise in 2016, primarily because the longer a person is enrolled in a health plan, they are likely to be diagnosed with additional health conditions, resulting in more paid health claims. This didn’t happen. Instead, risk scores “were stable” in the individual market.
There is no death spiral. The ACA is not imploding.
This does not mean the law doesn’t need to be fixed. For example, costs are rising too fast, and the law’s individual mandate has prompted too many healthy people to decide it’s easier to pay the penalty rather than buy health insurance.
But fixing these problems doesn’t require repealing the ACA, especially if it would be replaced with a plan that would cost Americans more for less coverage, put rural hospitals at risk of closing and gut the Medicaid program, as a bill currently under consideration in the Senate would do.
For these reasons, Sen. Susan Collins, a critical voice in the Senate health care debate, said she would vote against beginning debate on the Senate bill, written by 13 Republican men. Opposition from Collins and a handful of other Republican senators, some of whom think the bill is too generous, prompted Senate Majority Leader Mitch McConnell to delay votes on the bill. Instead, she said, she hoped to work with Republicans and Democrats to fix flaws in the ACA.
Perhaps because of the CMS report, but more likely because of public outcry about the Republicans’ attempts to gut the ACA, McConnell is now talking about “ shoring up” the law the GOP has made it its top priority to repeal.
This is a much more prudent path, based on politics and the real status of the Affordable Care Act.