Key provisions: A delicate balance
Many people equate the ACA with the individual mandate, which requires nearly all Americans to purchase health insurance or pay a fine. The federal government provides subsidies to enrollees between 138% and 400% of the federal poverty level so their out-of-pocket costs never exceed a defined threshold even if premiums go up. These could be on the chopping block.
“The last bill Congress passed to repeal the Affordable Care Act, which Obama vetoed, repealed the individual mandate and subsidies for people to buy insurance,” Ms. Hoffman says. “If they do repeal it, private insurance through the exchanges will crumble.”
Mr. Trump’s tax deductions to offset premium costs are based on income, making them more generous for higher-income earners than low-income ones, Hoffman adds.
Allison Hoffman
Additionally, “premiums go way up because many more people can’t afford insurance, so those who choose to buy are the sickest,” says Ms. Hoffman. “Risk pools get extremely expensive, and many more people see it as unaffordable.”
As a result, she says, people may choose high-deductible plans and face high out-of-pocket costs if they do seek care.
“It’s asking individuals to save by deciding how they’re going to ration care, where someone says they’re not going to go to the doctor today or fill a prescription drug they need,” Ms. Hoffman says.
Meanwhile, Mr. Trump has said he would like to keep the provision of the ACA that bans insurers from denying individuals with preexisting conditions. This, experts agree, may not be possible if other parts of the law are repealed and not replaced with similar protections for insurers.
“If you try to keep the rules about not including preexisting conditions and get rid of subsidies and the individual mandate, it just won’t work,” Ms. Hoffman says. “You end up with extraordinarily expensive health insurance.”
Rep. Ryan’s plan would prohibit insurers from denying patients with preexisting conditions but only if patients maintain continuous coverage, with a single open-enrollment period. He has promised to provide at least $25 billion in federal funding for state high-risk pools.
Prior to the passage of the ACA, 35 states offered high-risk pools to people excluded from the individual market. The Kaiser Family Foundation shows the net annual losses in these states averaged $5,510 per enrollee in 2011. Premiums ranged from 100% to 200% higher than non–high-risk group coverage. Government subsidies to cover losses amounted to $1 billion in each state.4
Meanwhile, both Mr. Trump and Rep. Ryan have proposed profound changes for Medicaid. Dr. Greeno calls this a “massive political challenge” unless they can provide an alternative way to cover people who currently rely on the federal-state entitlement, as well as those who gained coverage through ACA expansion. Currently, 70 million people are enrolled in Medicaid and the Children’s Health Insurance Program.5 Through Mr. Trump’s suggested block grants, states would receive a fixed amount of money to administer their program with increased flexibility. Rep. Ryan’s plan calls for enrollment caps that would distribute a dollar amount to each participant in the program with no limit on the number of enrollees. Either would be adjusted for inflation.
States could implement work requirements for beneficiaries or ask them to pay a small amount toward their premiums. Expansion states could also lower the Medicaid threshold below 138%.
Some states will struggle to provide for all their enrollees, Ms. Hoffman says, particularly since health spending generally outpaces inflation. Dr. Lenchus is more optimistic. “I believe states that didn’t expand Medicaid, one way or another, will figure out a way to deal with that population,” he says.
And … Medicare
The other entitlement program facing abrupt change is Medicare, typically considered the third rail of American politics.
“This is the hot political moment,” Ms. Hoffman says. “This is the point where the Republicans think they can tick off their wish list. For many Republicans, this kind of entitlement program is the opposite of what they believe in.”
Though Mr. Trump has said before he would not alter Medicare, he remained quiet on this point in the aftermath of the election. Repealing the ACA would affect Medicare by potentially reopening the Part D prescription drug doughnut hole and eliminating some of the savings provisions in the law. In fact, the CBO estimates Medicare’s direct spending would increase $802 billion between 2016 and 2025.1 Rep. Ryan has talked about privatizing Medicare by offering seniors who rely on it vouchers to apply toward private insurance.
“At the highest level, it’s moving Medicare from a defined benefit to a defined contribution program,” Ms. Hoffman says. “It shifts financial risk from the federal government onto beneficiaries. If Medicare spending continues to grow faster than the rest of the economy, Medicare beneficiaries will pay more and more.”
Seniors may also find themselves rationing or skimping on care.
Despite Rep. Ryan’s statements to the contrary, Medicare is not broken because of the ACA, Ms. Hoffman says. Its solvency has been prolonged, and though the reasons are not clear, Medicare spending has slowed since the passage of the ACA.6