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Three years into a presidency that promised to kill Obamacare, the health care law has never been stronger.
Millions of people buying coverage during the enrollment period starting Friday will find that average premiums have dropped across the country. When consumers go to HealthCare.gov, they’ll be paying 4 percent less on average for the most popular health plans — with six states reporting a double-digit decline.
The years of huge rate hikes and insurers abandoning the markets appear to be a thing of the past as the 10th anniversary of the law approaches next spring. Predictions of the Affordable Care Act’s demise — made by President Donald Trump himself and Democrats who criticized administration policies undermining the law — haven’t materialized.
To be clear, Obamacare still faces potential extinction in the judiciary, as a lawsuit pending in federal court could deal a death blow to the law. On top of that, Republicans remain hostile to the law.
“We believe the Affordable Care Act simply doesn’t work,” HHS Secretary Alex Azar told reporters last week. “But until Congress gets around to replacing it, the president will do what he can to fix the problems created by this system for millions of Americans.”
But if you separate the politics from the policy, it’s clear that the Affordable Care Act is maturing. Premiums have moderated, even if plans are still pricey for people not receiving government help. And it is deeply embedded in the American health care system, with over 10 million enrolled in Obamacare plans and millions more benefiting from expanded Medicaid in roughly two-thirds of states.
“To date, the ACA has withstood the gut punches,” said Dave Dillon, a fellow with the Society of Actuaries who consults with states on the law.
There may be no coming back from the next one, though. A federal appeals court any day now could announce whether it will uphold a decision from a federal judge who found the entire law unconstitutional. Even a narrower decision undercutting the law’s popular insurance protections for preexisting conditions could be chaotic. The case is widely expected to reach the Supreme Court for a final ruling, possibly next summer as the presidential campaign ramps up.
Even though the Trump administration supports the lawsuit, which was brought by more than a dozen GOP-led states, top health officials have said they will keep enforcing the law while the legal battle continues. Seema Verma, the health official overseeing the insurance markets, during congressional testimony last week repeatedly dodged questions about contingency plans if part or all of the law is struck down. Trump officials have also said they would work with Congress to prevent a meltdown of the insurance markets — though a bipartisan compromise seems nearly impossible, especially in an election year.
Still, the prospect of a ruling against Obamacare has not spooked insurers into hiking rates or fleeing the markets, as many did in 2017 when they faced uncertainty from repeal efforts. Insurers are mindful of the looming legal threat, but they’re confident any fallout wouldn’t immediately be felt. And many view the lawsuit, which claims Obamacare was invalidated when Congress eliminated the penalty for not having insurance, as significantly flawed.
Kathy Hempstead, a health insurance expert at the Robert Wood Johnson Foundation, said the upheaval that could be wrought by the lawsuit is so profound there isn’t much health insurers could do to account for Obamacare being entirely struck down by the courts.
“It doesn’t help if they jack up the premiums,” she said. “There’s sort of nothing they can do about it.”
Just three states — Indiana, New Jersey and Vermont — and the District of Columbia will see average rate hikes of over 8 percent in their marketplaces next year. In some of those states, the higher rates could be partly explained by smaller increases in past years, Hempstead said.
Twenty new health plans are selling 2020 coverage on HealthCare.gov, the federal enrollment portal. Nearly a third of counties will have at least three health plan options, up from 17 percent just two years ago. Just 12 percent of enrollees live in a county with one insurance option, down from 20 percent in 2019 health plans.
“Most carriers at this point feel they have weathered the worst of the storms,” said Sabrina Corlette, a research professor at Georgetown University's Health Policy Institute who supports the law.
Obamacare has grown more stable as political threats to its existence have also subsided. Trump came into office almost three years ago promising to dismantle Obamacare, but backlash to the repeal effort helped fuel the Democratic takeover of the House in the 2018 midterm elections — and guard against repeal efforts through at least next year. Now, Trump health officials boast about how well they are running the law.
“If I had a crystal ball in 2017, I’m not sure I would have guessed that we would have landed where we are,” said Kelley Schultz, executive director of commercial policy at the trade group America’s Health Insurance Plans.
But not everything is rosy in the marketplaces. Enrollment has essentially plateaued and dipped slightly last year. The vast majority of the 10.6 million people enrolled this year received hefty premium subsidies, and many middle-income people who earn too much to qualify for aid find the coverage unaffordable. The average premium for an unsubsidized family of four buying the cheapest coverage option is still close to $1,100 a month, and those plans typically have a more than $12,000 deductible.
The high costs are helping to fuel an intense debate within the Democratic presidential primary: whether to build on President Barack Obama’s signature achievement with more subsidies and a public insurance option to compete with private companies, or to transition to an entirely government-run “Medicare for All” system covering everyone.
The Trump administration says Obamacare remains unaffordable for too many and must be replaced.
Obamacare supporters, who scoff at the administration’s attempt to take credit for the law's turnaround, say other factors are contributing to the improving marketplaces. After years of large rate hikes, insurers have finally adapted to new rules and have a better grasp on the health needs of their customers. Insurers may be moderating rates after taking larger-than-needed hikes to guard against uncertainty surrounding the law. Also, the Trump and Obama administrations have approved in numerous states “reinsurance” programs, which help insurers offset the cost of their most expensive medical bills.
The law’s proponents argue the marketplaces would have been in better shape if the Trump administration hadn’t taken numerous measures, including cutting the enrollment period in half, slashing outreach budgets and promoting cheaper and skimpier insurance plans as an alternative to Obamacare.
HHS will again dedicate $10 million for outreach during the enrollment season, a fraction of what the Obama administration had spent and what some state-run insurance marketplaces have planned for this year. California alone will spend $121 million on advertising, and New York has budgeted $43 million for the 2020 enrollment season. The enrollment period in those states will last six weeks longer than the Dec. 15 federal sign-up deadline.
Trump health officials said they've been able to run an efficient enrollment campaign, better targeted at people likely to enroll. Obamacare supporters, however, say the federal government is missing an opportunity to sign up new customers.
Mark Van Arnam, who heads a consortium of six nonprofits in North Carolina helping people enroll, said the groups have been far more selective in their outreach efforts since their federal funding was cut by roughly 80 percent under Trump. They’ve relied more on volunteers and have trained college students to help answer questions from insurance shoppers.
"We're not able to do the robust outreach we used to do," he said.
As in years past, advocacy groups like Get America Covered will try boosting enrollment through digital campaigns and outreach to local media. Co-founder Joshua Peck, who led Obamacare marketing efforts under the Obama administration, said his group's efforts are no substitute for a well-funded federal outreach effort.
“What we’re trying to accomplish during open enrollment is fairly simple,” he said. “To inform people when the final deadline is and to make people aware that coverage is much more affordable than people think.”