Not Out Of The Woods Yet: 5 Looming Threats To Obamacare And Medicaid

Obamacare has dodged many bullets over the past few weeks.

Bills in Congress that would have gutted Medicaid and repealed the ACA crashed and burned. President Donald Trump, after threatening for months to cut off billions of dollars in subsidies to insurers, caved and made the August payment. The Trump administration is, so far, enforcing the ACA’s individual mandate. And despite dire warning that dozens of counties would be left with no insurers, nearly every single one has been covered.

But health care experts and advocates tell TPM that Medicaid and the individual markets remain under the gun, with various looming threats from Congress and Trump’s Department of Health and Human Services (HHS). Here are the five ways the Trump administration and Hill Republicans could still go after the nation’s health care system in the months ahead.

HHS Silence On Obamacare Enrollment Efforts

With the first full open enrollment period of the Trump administration just two months away, HHS has been silent on what the federal government will do, if anything, to educate the public about their insurance options and encourage them to sign up for health coverage. Groups that depended in past years on partnerships with and grant funding from the federal government to reach out to millions of people say they’re completely in the dark about the administration’s plans for this fall.

Sarah Rosenbaum, a professor of health law at George Washington University, tells TPM this inaction and uncertainty is “an existential threat to this market,” and warned that without the aggressive outreach campaigns that took place every year since 2013, enrollment could plummet.

“This market needs a healthy risk pool,” she explained, noting that sick people don’t need to be convinced to sign up for insurance but a pool only comprised of those people would be unstable and prohibitively expensive. “If the administration is suppressing open enrollment activities, that alone is cause for great concern.”

Trump Keeps Subsidies In Limbo

Though insurers, hospitals, doctors and patients breathed a sigh of relief when President Trump grudgingly agreed to pay Obamacare’s cost-sharing reduction (CSR) payments last week, the administration’s month-by-month threats to end the subsidies continues to throw the market into turmoil.

“The looming ax hanging over the CSRs is very worrisome,” said Sarah Somers, a managing attorney at the National Health Law Program. “It spooks insurers and creates instability. This is no way to run a private insurance market.”

If Trump does cut off the payments, and if Congress is unable to pass a bill this fall to fund them, experts predict that insurers will flee or hike their premiums sky high to make up for the lost funding.

“I would not be surprised to see several dozen bare counties,” said Tim Jost, a health care law expert and professor at Washington and Lee University School of Law. “And premiums would go up even further, hitting people whose incomes are too high to qualify for tax credits. So cutting the CSRs would be very disruptive, and even dragging along without making a decision is very disruptive.” 

Shrinking The Medicaid Expansion

Throughout months of congressional battles this year, Medicaid proved far more popular and resilient than Republicans anticipated, but threats from state governments and HHS remain.

A crucial decision could come soon on a Medicaid waiver request from Arkansas that, if approved, could allow states across the country to boot hundreds of thousands of people from the Medicaid rolls. The waiver asks permission to roll back the state’s Medicaid expansion population from 138 percent of the federal poverty line to 100 percent, kicking about 60,000 people out of the program. Those people would be eligible for tax credits to purchase private insurance plans, but many would not be able to afford the premiums and deductibles and would likely go uninsured, experts say.

If HHS grants Arkansas’ waiver, experts expect a rush of copycat requests from states across the country. While this would open the possibility of states that haven’t expanded Medicaid at all pursuing a partial expansion—potentially covering millions more people—it could also open the floodgates on requests to cut Medicaid eligibility to far below 100 percent of the federal poverty line.

“This could be a wholesale onslaught on Medicaid,” said Rosenbaum. “They keep using rhetoric about saving Medicaid for people who truly need it. But everybody on Medicaid is, by definition, financially or physically vulnerable. They want it to be just for people in some Dickensian poor house scenario.”

Here Come The Medicaid Waivers

In addition to Arkansas’ petition, a host of Medicaid waivers from other states awaiting approval from HHS have the potential to severely restrict the federal program. At least five states so far are asking permission to impose a work requirement on their Medicaid systems, despite research indicating that the vast majority of Medicaid beneficiaries do work and those who do not face serious barriers to employment. Other waiver requests are seeking to implement mandatory drug tests and lifetime limits on Medicaid coverage, cut coverage for vision, dental care, and non-emergency medical transportation, defund women’s health clinics, and require people below the federal poverty line to pay insurance premiums.

The Obama administration rejected many of these proposals in the past, saying they undermined the intent of the Medicaid program. But CMS Administrator Seema Verma, who herself crafted some of the state waiver proposals before joining the Trump administration, is likely to give them her seal of approval.

“It’s realistic to expect she’ll approve things like lockout periods or premiums or work requirements that will have the effect of creating barriers to enrollment,” Jost said. “I expect these policies will make it harder for people to enroll and will tend to reduce both coverage and government expenditures on Medicaid.”

Republicans In Congress Can’t Stop, Won’t Stop

While Congress did fail spectacularly in July to fulfill eight years of promises to repeal the Affordable Care Act, they did manage—despite pushback from doctors, hospitals, insurers, and the public—to come within one vote of advancing a bill.

The GOP’s long-term goals of repealing Obamacare and gutting Medicaid—House Speaker Paul Ryan’s personal dream since his frat boy days—is far from dead, and will continue to lurk in undead zombie fashion until a political opportunity presents itself.

“Congressional plans to kill the Medicaid expansion, block-grant traditional Medicaid, impose per capita caps, etc. are over for now, but could change in a moment,” said Somers. “It’s hard to believe there won’t be another run at it sooner or later. Everybody should remain vigilant and concerned.”

Discussions have already begun during the congressional recess on a new repeal bill that would block-grant ACA funding and repeal the law’s individual and employer mandates.