Column: In a hopeful sign, Republicans are finally getting around to ‘repairing’ Obamacare -- six years late
Over the last few days, the Republicans’ campaign against the Affordable Care Act has undergone a subtle shift in branding. They’re no longer talking about a strategy of “repeal and replace’: The new buzzword is “repair.”
Close followers of GOP efforts to gut the law, which has brought health insurance to some 20 million Americans and protected millions of others from being denied coverage because of medical conditions, are skeptical that this signals a real change in the Republican caucus’s approach.
“Careful!” counsels healthcare wonk Andrew Sprung. “This sounds on its face more like rebranding than rethinking.”
The ACA text is not infallible...We should course-correct when possible.
— David Anderson, Duke University
Yet a package of three Republican bills reviewed last week by the House Committee on Energy and Commerce suggests that the GOP caucus may actually be getting serious about fixing the pieces of the ACA that have needed fixing for years. That’s an indication that repeal may be falling off the table. At least some Republicans appear to accept that if the ACA is here to stay, they may as well do their part to make it work better. This is at best a belated recognition of reality, and long overdue.
David Anderson of Duke (the health insurance expert formerly known pseudonymously as Richard Mayhew of balloon-juice.com) correctly labels the measures “technical correction bills that should have been going through committee and debated in 2014 and 2015 and 2016.”
But the measures’ reception on the right may also hint at how difficult it may be for Republicans to turn course on the ACA after spending six years vilifying the program. “It is colossally stupid for Republicans even to entertain these ideas,” Michael Cannon of the libertarian Cato Institute told me by email. He argues their net effect would be to increase federal spending while doing nothing to stabilize the Obamacare exchange market.
Here’s what the three measures would achieve. (Thanks to Tim Jost of Washington and Lee University for his succinct analyses.)
A bill by Rep. Marsha Blackburn (R-Tenn.) would tighten up the ACA rules for special enrollment periods, which allow individuals to sign up for coverage outside of the annual open-enrollment period, which typically lasts from November through January for the coming year’s coverage. The bill would require the Department of Health and Human Services to certify applicants’ eligibility for special enrollment before they can get covered.
Insurers have complained endlessly about these provisions, which allow applicants to sign up if they experience an event such as getting married, having a baby, relocating, or losing employer coverage. They say individuals use SEPs to game the ACA’s individual mandate system by waiting until they’re sick to buy coverage; they point to evidence that SEP enrollees are sicker and older than open-enrollment members. But no one has ever produced statistics showing how many people have used SEPs or how many enrollments might involve fraud, raising doubts about how much “gaming” really is going on.
A second bill, from Rep. Larry Bucshon (R-Ind.), would widen the permissible spread between premiums charged to older vs. younger enrollees from the ACA’s 3:1 to 5:1 or more, by states’ option. The wider spread would tend to reduce premiums charged to younger enrollees and raise them for older customers. Advocates of this change have argued that 5:1 was closer to the traditional range employed by insurers in the pre-ACA market, and that the reduced premiums would encourage more young people to sign up for coverage, improving the risk profile of the individual insurance pool. Of course, this would happen at the expense of older Americans, whose medical costs tend to rise as they age.
The third bill, introduced by Rep. Bill Flores (R-Texas), would reduce the ACA’s grace period for nonpayment of premiums by customers receiving premium subsidies from 90 days to as little as 30 days. Under current law, insurers have to cover claims for the first 30 days after a missed payment, but must allow those customers to catch up with missed premiums for as long as three months. After that, they can cancel the policy.
Insurers say that some customers take advantage of the long grace period to stop paying premiums after, say, September, then only catch up if they get sick before the end of the year. Jost reports that the HHS has found no evidence that this is a widespread practice or one that affects insurer economics. But it’s a common talking point in the industry.
Even the most sedulous defenders of the Affordable Care Act have few issues with these sorts of changes, in principle. All are perfectly reasonable proposals for tweaking the ACA to reflect what is known about the individual insurance market, which was nearly entirely a black box when the law was passed and for the first couple of years of enrollment (starting in 2014).
“The ACA text is not infallible,” observes Anderson. “It had a bunch of trade-offs in it and assumptions about behavior. We now have good data on those trade offs and assumptions. We should course correct when possible.” A rational discussion of the options for special enrollment, the age-banding of premiums, and the grace period could have begun at any time, but was obstructed by congressional Republicans’ position that the only option they would discuss was repeal. Now that they’re “It,” they’re coming around to what would have been a normal process of adjustment for any major legislation.
Jost characterizes the bills as the first package to be considered by the new Congress “not aimed at destroying the ACA, but rather at trying to calm insurers and a nervous public.” He calls that “a very interesting development.”
He’s right. Democrats in Congress should engage with the GOP on all three. That doesn’t mean they should be passed in their initial forms, but certainly the measures provide the foundation for improving Obamacare in ways that help insurers and customers. If Republicans are beginning to recognize the wisdom of keeping the ACA in place and fixing what doesn’t work, they should be offered a carrot and not a stick. As is known by any parent of toddlers or owner of Labrador puppies, that’s the way to encourage good behavior.