Nov 28, 2017

How Trump has reshaped the ACA

President Donald Trump responds to a question at the end of a meeting. Photo: Susan Walsh / AP

The Affordable Care Act used a carrot-and-stick approach to get healthy people to sign up for coverage. The stick is the individual mandate and the penalty for going uninsured; the carrot is a system of subsidies to help people afford their premiums. Under Republicans' watch, the stick is getting a lot weaker while the carrot is looking more and more delicious.

What's happening: We're ending up in a place where the poorest consumers can get even cheaper coverage than the ACA intended, especially if they choose less comprehensive care, while wealthier consumers increasingly don't have much incentive to get covered at all. Those trends will only grow more pronounced if Republicans successfully repeal the individual mandate in their tax bill, leaving the law with only its carrot, and no stick.

  • Compare that to what the law was initially designed to do — move a lot of people into the same system, in which even the people who didn't get a subsidy would benefit from a competitive marketplace to shop for coverage.

How it works:

  • President Trump's decision to cut off the ACA's cost-sharing payments has caused premiums — and premium subsidies — to soar. The poorest consumers, who are eligible for the biggest subsidies, have more access to cheaper plans than ever before.
  • The people who don't get subsidies are on the hook for bigger premium increases. At least 20% of the unsubsidized population are exempt from the individual mandate because their premiums are too expensive, according to data released yesterday by the Robert Wood Johnson Foundation.
  • Together, that means subsidies are going further for the people who get them, and those who don't are increasingly off the hook for the individual mandate.
  • We've also seen a moderate shift away from middle-of-the-road "silver" plans, toward both the cheaper "bronze" and more generous "gold" options.

The bottom line: All of this has compressed the ACA's benefits.

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