The ACA survived a decade of attacks and active efforts to undermine its ability to give more people more affordable access to healthcare. Fortunately so for the millions who lost their jobs during the pandemic.
Despite Republican control of both houses of Congress in the first two years of the Trump administration, Republicans could not deliver on their promise to “repeal and replace” the Affordable Care Act (ACA). Instead, the ACA emerged from four years of a hostile Donald Trump administration more entrenched in the American healthcare system than ever.
During his campaign, candidate Joe Biden promised to build on the ACA, which he has done by increasing enrollment periods in the government-sponsored marketplaces, increasing insurance policy subsidies for more people, and reversing many Trump administration actions. The result has been an increase in the number of Americans covered by health insurance.
The ACA proved its resilience and effectiveness at protecting individual access to health insurance coverage during the COVID-19 recession, the first economic downturn since the law passed in 2010. In our system of employer-provided health insurance, people commonly lose health coverage along with jobs when recessions hit, but the ACA appeared to provide an effective safety net, according to a study by the Kaiser Family Foundation. The ACA expanded eligibility for Medicaid and established health insurance marketplaces that gave those who lost job-related insurance access to affordable insurance that did not exist previously.
The study found that when the pandemic hit in 2020, “2 to 3 million people may have lost employer-based coverage between March and September”, but the overall number of people without health insurance was largely unchanged. The “loss of employer-based coverage may have been offset by strong enrollment in Medicaid and marketplaces. Many of those who lost job-based health coverage would have qualified for Medicaid or for a special enrollment opportunity to purchase individual market health coverage.” Additionally, Medicaid enrollment increased by 4.3 million from February through July of 2020, and enrollment in the individual market was steady from March through September, a period that would see a fall-off during normal years.
The enrollment figures tell just part of the story of the ACA’s recovery and durability despite years of partisan opposition.
Political Hostility Damages the ACA
What made the ACA’s achievement during the pandemic so remarkable was that it came after four years of Trump administration hostility to the law. On his first day in office, President Trump signed an executive order calling for the repeal of the ACA and saying that “pending such repeal, it is imperative for the executive branch to…take all actions consistent with law to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market.”
The order was widely seen as a declaration of an official administration policy to undermine the act as much as possible through executive orders, regulations, rules, and “guidances” telling federal agencies how to interpret the law and by revising rules and regulations . For example, the administration sought rules to minimize “the economic burden” of the ACA on states and individuals, urged states to drop out of the marketplaces, expanded waivers to states to allow insurers to offer policies that whittled down the comprehensive “essential health benefits” the ACA was designed to ensure, and eliminated payments to insurers that helped cover the costs of covering very low-income customers.
The administration also shortened the period for enrolling in the ACA marketplaces from three months to six weeks, cut the advertising budget by 90%, and reduced the budget for in-person consumer assistance by 80%.
As a result, the Trump years saw an increase in the number of uninsured Americans, a reversal from the first years of the ACA. During its first six years, from 2010 to 2016, the ACA significantly reduced the number of Americans without health insurance from 48 million uninsured to 28.6 million – a 40% reduction. But during the Trump administration, the number of uninsured ticked back up to 31.6 million by 2020.
A Year of Recovery
The ACA was one of many points of stark contrast during the 2020 presidential campaign. In the Democratic primaries, Biden staked out a position that rejected some of his rivals’ “Medicare for all” proposals and instead promised “a plan to build on the Affordable Care Act by giving Americans more choice, reducing health care costs, and making our health care system less complex to navigate.”
In his first year in office, Biden mostly delivered despite receiving no support from Republicans in Congress.
Biden’s coronavirus relief and economic stimulus package – the American Rescue Plan Act of 2021 – passed two months after he took office. It contained several provisions aimed at making health insurance more affordable, including an increase in subsidies for more people buying the private insurance plans sold on the ACA marketplaces. These additional subsidies led to substantially lower premium payments for the vast majority of the millions of people already buying from the markets or eligible to do so, according to an issue brief from the Kaiser Family Foundation.10 Bloomberg News estimated that in general premiums dropped by 40%. The stimulus package also allows those receiving unemployment insurance who meet certain income requirements to receive an insurance plan with a zero-dollar premium.
By the third quarter of Biden’s first year in office, the uninsured percentage among adults aged 18 to 64 had dropped to 13.0%, as Biden administration efforts to increase the reach of the ACA began taking effect. His administration announced that the overall uninsured rate was lower than before the pandemic.
More Affordable, Not Less Costly
In recognizing the success his administration has had in revitalizing the ACA, the Biden White House said: “The American Rescue Plan did more to lower costs and expand access to health care than any action since the passage of the Affordable Care Act…. It made quality coverage more affordable than ever. My administration will keep fighting to lower costs and expand health coverage.”
There are two important points worth noting about this statement. First, the American Rescue Plan did not lower costs but simply made the cost of insurance premiums more affordable to low-income individuals and families. Costs were not addressed by the legislation, which pays for the subsidies with taxpayer money.
Second, the increased subsidies included in the American Rescue Plan were designed to last for only the years 2021 and 2022. Given the higher subsidies’ demonstrated success, the statement that “the administration will keep fighting” indicates that Biden will likely push to make them permanent in some form.
Undoing Political Damage to the ACA
President Biden moved quickly to reverse many of the previous administration’s policies on the ACA.
One simple move that Biden made was to open the insurance market for a special enrollment period from February to May 15, 2021, to enable more people to find coverage. (The previous rule required that a person experience a special event such as losing a job to sign up outside of the regular fall open enrollment period.) More than 1.5 million people enrolled during this term.
The Biden administration also restored the budget for advertising and consumer support, increasing awareness of the program and helping consumers to navigate the sometimes overwhelming process of selecting and enrolling in a plan.
During his administration, Trump provided waivers that allowed states to impose eligibility restrictions on Medicaid recipients as a means to lessen the reach of the ACA. Many of these waivers, particularly those involving work requirements, were challenged in court, and a federal district judge vacated several of them. Following his inauguration, Biden issued an executive order directing the Department of Health and Human Services to reconsider the waivers, and within months the agency withdrew the waivers for the four states that had received them. No longer could those states impose work requirements on Medicaid recipients.
In stark contrast to the Trump administration’s efforts to curtail some LGBTQ protections in the ACA, the Biden administration signed off on a Colorado proposal requiring insurers to include “gender-affirming care” among the “essential benefits” guaranteed in that state. Ironically, the Biden administration approved this expansion of coverage under the Trump-instituted waiver policy that allows states to request modifications of the essential benefits covered.
In another sign of the ACA’s rebound, insurers have returned to the state marketplaces. By 2018 (Year 2 of the Trump administration), the average number of insurers per state had fallen by more than 40% from its peak in 2015 due to Trump efforts at making the market unwelcome to business. However, as it became clear that the ACA would not be repealed after Democrats won the midterm elections, many insurers began returning to the markets. Biden administration policies have since re-stabilized the markets, with the number of insurers in the market up by 43%.
Overall Biden’s efforts have been successful: In January 2022, the Biden administration announced that a record number of people had signed up for insurance on the ACA marketplaces during the latest open enrollment period. The 14.5 million people who signed up included 3 million people who did not previously have coverage, which the administration said was a result of the greater subsidies making insurance more affordable.
Supreme Court, Voters Strengthen the ACA
Biden’s efforts to stabilize the ACA received a boost when it survived its third Supreme Court challenge early in his presidency. The case took aim at the ACA’s individual mandate, the centerpiece of the law that requires that most Americans obtain health insurance or pay a penalty. Plaintiffs claimed that the mandate was unconstitutional, but in June 2021, the Court rejected the plaintiffs’ case by a 7-2 decision.
While the decision was based on a technicality and not the merits of the claim, it nonetheless left the ACA on stronger legal ground. Given that the court has taken a more conservative turn since its last ruling on the ACA, as it now includes three Trump appointees, beneficiaries of the ACA may have achieved some level of legal security that this safety net will remain.
And over the last several years, voters in five states exercised their rights to overcome the twin obstacles of political opposition to the ACA and a different, earlier Supreme Court decision that made it possible for states to opt out of the law that offered them more affordable, subsidized healthcare.
The ACA directed states to expand their Medicaid programs to cover most adults with incomes up to 138% of the federal poverty level, but a 2012 Supreme Court decision allowed states to opt out of the expansion. (That same decision also upheld the constitutionality of the ACA in what was the first Supreme Court challenge to the law.) Medicaid expansion has been responsible for the greatest increase in coverage sparked under the ACA, and as noted above, has been essential to Americans who lost jobs – and their employer-provided health insurance – during the COVID pandemic.
Following the Court’s 2012 decision, 20 states initially chose not to expand Medicaid, despite financial incentives in which the federal government pays 90% of the cost of expansion. When it became apparent that their legislatures would not expand Medicaid, voters stepped in. Maine voters approved expansion via a ballot initiative in 2017. Idaho, Nebraska, and Utah voters followed in 2018, and Missouri voters did the same in 2020.
Today, 12 states still have not chosen Medicaid expansion.
The refusal of some states to expand Medicaid has led to what has been called the coverage gap. Because the drafters of the ACA expected people with very low incomes to receive Medicaid, they wrote the law so that these people were below the threshold to receive the needed subsidies in the ACA marketplaces. An estimated 2 million people fall into this category. Some versions of the Build Back Better Act would bypass the need for states to expand Medicaid by making those with lowest incomes eligible for the subsidies they need to buy policies on the ACA marketplaces, making permanent subsidies similar to the temporary ones in the American Rescue Plan. Whether any form of this aid will pass is an open question.
Similarly, during his campaign Biden said he wanted to further expand the ACA by offering all Americans “the choice to purchase a public health insurance option like Medicare.” To date, no such proposal has been included in any budgets or legislation, presumably because the current political environment is unlikely to support its passage.
In the years since the ACA’s passage, it has proved resilient and effective in its aim to expand health insurance coverage. The ACA weathered four years of Trump administration hostility and efforts to undermine it, survived the Republican repeal effort, and was affirmed in three Supreme Court challenges. It has been credited with averting a spike in the number of uninsured by maintaining health insurance coverage rates through its first recession. Biden ran on a platform of expanding its reach, but whether he will be able to push through Congress any of the proposals to do so permanently remains to be seen.
Wondering if you qualify for a subsidy in the insurance marketplace?
Healthcare.gov, the government’s website created to help people shop for and enroll in health insurance, has a simple-to-use tool that will let you know if you might be able to save on Marketplace insurance premiums, or qualify for Medicaid or Children’s Health Insurance Program (CHIP). All you need to do is enter the state where you live, the number of people including yourself who will be covered by the plan, and your estimated income for the year.
To give it a try, visit this healthcare.gov page.
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