This might be the best way to understand the Trump administration’s approach to the Affordable Care Act:
- The ACA’s exchanges, like health insurance itself, relied on healthy people subsidizing the cost of covering sick people.
- But they’re sliding deeper into something a lot more like a makeshift high-risk pool, in which healthy people are absent and the government simply pays to cover sick people.
- The White House and congressional Republicans are not trying to change that reality. In some ways, they have accelerated it. At a minimum, they accept it.
- Their focus is instead on how to create a better deal for the comparatively healthy, wealthy people who aren’t interested in the exchanges. And if more people end up ditching the marketplaces as a result, well, c’est la vie.
Yesterday’s rules are another brick in the wall. Repealing the individual mandate will pull a lot of healthy people out of the ACA’s exchanges. Association health plans will pull out a few more; expanded access to short-term health plans, a few more after that.
- On their own, yesterday's rules on short-term plans probably wouldn't wreck the market. After all, they restored what had been the status quo until 2016.
- “I don’t think it’s going to be a huge deal, particularly in the short term,” Avalere’s Chris Sloan told me.
Between the lines: “Really, the draw into the individual market has been the subsidy,” Health and Human Services secretary Alex Azar told reporters yesterday.
- It’s an instructive comment about how HHS sees the exchanges, and who it sees as the potential customer base for ACA coverage.
- More than 80% of ACA enrollees receive premium subsidies. And the consumers with the biggest subsidies are the ones who are the most insulated from steep premium increases.
- People who aren’t eligible for premium subsidies “are just not enrolling in this market,” Sloan said.
The bottom line: All of this leaves the exchanges as a de facto home for people who really need coverage for preexisting conditions or who are poor enough to be shielded from the rising cost of that coverage.
Rather than try to balance that group out, HHS is moving on and trying to create new options for healthy people — and that leaves the federal government largely on the hook for rising premiums within the exchanges.