The law also established new marketplaces for the sale of nongroup insurance to all individuals except undocumented immigrants, and created new subsidies for nongroup coverage. New fees, taxes, and offsetting budget savings were adopted to finance ACA subsidies and reduce the deficit, including a so-called “Cadillac tax” on high-cost employer-sponsored plans. The Congressional Budget Office (CBO) estimated repeal of the ACA would increase the federal deficit by $137 – $353 billion over 10 years (2016-2025). Since enactment, the uninsured rate has fallen to 8.6% and an estimated 20 million Americans have gained coverage, while 27 million remain uninsured. Public opinion about the ACA remains divided, largely on partisan lines. Several issues have emerged in the 2016 campaign.
Affordability of premiums and cost sharing. Under ACA, refundable premium tax credits (APTCs) subsidize the cost of marketplace policies for people ineligible for affordable group coverage at work or public programs and who have income between 100% and 400% of the federal poverty level (FPL). These APTCs protect individuals from the full cost of coverage in the marketplaces; however, bigger premium increases proposed for 2017 are a concern. An estimated 6.1 million people are ineligible for APTCs because of the so-called “family glitch,” in which the definition of affordable group coverage takes into account the cost of self-only coverage even if adding dependents to the job-based plan is not affordable.
The ACA also offers cost sharing subsidies for marketplace participants with income between 100% and 250% FPL, and requires all new private plans to limit cost sharing for covered benefits to more than $7,150 for self-only coverage in 2017. Affordability of cost sharing pre-dates the ACA and continues to be a challenge. Under job-based group plans since 2010, annual deductibles have risen almost three time as fast as premiums and about seven times as fast as wages and inflation. One in five insured Americans struggle to pay medical bills. Health plan cost sharing is the leading factor contributing to medical debt among the insured. Out-of-network medical bills also contribute significantly; and 7 in 10 people who could not afford bills from out-of-network providers were unaware the provider was not in their plan network when they received care. Such bills are sometimes called surprise medical bills.
Enrollment in high-deductible plans continues to grow, a trend that predates the ACA. Enrollees in such plans can often open health savings accounts (HSAs) to defray cost sharing and could deduct HSA contributions. HSAs can transfer tax free to heirs who are spouses, but are otherwise subject to income tax upon the account holder’s death.
Marketplace enrollment. In March 2016, 11.1 million individuals were enrolled in marketplace plans representing 40% of the population estimated eligible to enroll in marketplace plans, though enrollment varies by state. If all states enrolled at the average rate of the top ten highest performing states (that together have enrolled 59% of eligible consumers) marketplace enrollment could be nearly 50% higher. Affordability continues to be the major reason that the uninsured lack coverage, but lack of awareness about the ACA is also a factor. Although Marketplaces are required to provide in-person consumer assistance, as the third open enrollment period ended, two-thirds of uninsured consumers polled were unaware the deadline was approaching and 80% said they had not been contacted by anyone about signing up for coverage.
Health plan choice and competition. The ACA requires all plans to provide standardized summaries of coverage to facilitate plan comparisons. Also to help consumers and regulators compare plan performance, the ACA requires all new private plans to disclose transparency data indicating how promptly claims are paid, how often they are denied, the availability and cost of in-network providers, and other measures. These transparency provisions have not yet been implemented.
Marketplaces were designed to encourage competition between health insurers. However, for 2017, some insurers have announced they will no longer offer plans on the marketplace, raising concerns about consumer access to a choice of plans and a reduction in competition, particularly in rural counties. Two-thirds of marketplace participants in urban counties will likely continue to have a choice of 3 or more insurance companies in 2017; by comparison, 41% of enrollees in rural counties will likely have a single insurer, up from 7% in 2016.
Where the Candidates Stand
Hillary Clinton. Hillary Clinton supports policies to maintain and build upon the ACA. She would increase premium subsidies in the marketplace so no participant is required to pay more than 8.5% of income for coverage. She would also fix the “family glitch” and allow people to buy coverage through the marketplace regardless of their immigration status. Hillary Clinton would make a public plan option available in every state and give people the option of buying into Medicare starting at age 55. She would invest $500 million annually in outreach and in-person assistance to enroll more uninsured in coverage, and she would enforce ACA transparency provisions. She would authorize the federal government to review and disapprove unreasonable health insurance premium increases in states that do not have such authority, and she would repeal the Cadillac tax. Hillary Clinton has also proposed new private plan standards to waive the annual deductible for at least three sick visits per year, limit monthly cost sharing for prescription drugs to $250, and protect against surprise medical bills when patients inadvertently receive care out of network. She has also proposed a new refundable tax credit of up to $5,000 to subsidize out-of-pocket health expenses (including premiums in marketplace plans) for all Americans with private insurance.
Donald Trump supports complete repeal of the ACA, including the individual mandate to have coverage. In lieu of requiring insurers to provide coverage to everyone regardless of health status, he would work with states to create high risk pools for individuals who have not maintained continuous coverage. In place of refundable premium tax credits, Donald Trump would provide a tax deduction for the purchase of individual health insurance. Donald Trump would promote competition between health plans by allowing insurers to sell plans across state lines; an insurer licensed under the rules of one state would be allowed to sell coverage in other states without regard to different state laws that might apply. Donald Trump would promote the use of Health Savings Accounts (HSA), and specifically would allow tax-free transfer of HSAs to all heirs. Donald Trump would also require price transparency from all hospitals, doctors, clinics and other providers so that consumers can see and shop for the best prices for health care procedures and other services.