The Future of the Affordable Care Act under President Elect Trump
There are more than 45 million people now enrolled in coverage through the Marketplaces (Exchanges) and the state’s Medicaid Expansion programs under the Affordable Care Act (ACA). https://aspe.hhs.gov/reports/aca-related-enrollment-february-2024#:~:text=Based%20on%202023%20and%20early,the%20highest%20total%20on%20record. An historic 21.3 million Americans enrolled in coverage through the state and federal marketplaces in 2024; they are buying individual, commercial health insurance policies. https://www.cms.gov/newsroom/press-releases/historic-213-million-people-choose-aca-marketplace-coverage Nearly 24 million Americans enrolled in Medicaid expansion, even though 10 mostly Southern states like Florida, Texas and Mississippi have not yet enacted it, leaving over 2 million Americans, mostly residing in the South uninsured. https://www.kff.org/affordable-care-act/state-indicator/medicaid-expansion-enrollment/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Between 50 and 129 million Americans have pre-existing medical conditions; they are guaranteed access to health insurance at affordable premiums under the Affordable Care Act (ACA). https://www.cms.gov/cciio/resources/forms-reports-and-other-resources/preexisting Young Americans until they reach the age of 26 can enroll in coverage through their parents pursuant to the ACA; over 13 million Americans benefit from this provision. https://www.commonwealthfund.org/press-release/2012/estimated-66-million-young-adults-stayed-or-joined-their-parents-health-plans
The health agenda for Trump and a Republican Congress could include reductions in premium assistance through the Marketplaces or wholesale repeal of the ACA. https://www.kff.org/quick-take/what-trumps-2024-victory-means-for-the-affordable-care-act/ Campaigning for the Presidency in 2024, Trump abandoned his earlier promises to repeal the ACA, and instead promised to look at ideas that in his view were better and more affordable to improve it.
His agenda could include high risk pools for the medically uninsurable and block grants of Medicaid and the Exchanges to state governments. https://www.pwc.com/us/en/industries/health-industries/library/election-2024-trump-health-agenda.html This would require debate in, and consideration, then passage by Congress. They clearly do not meet his stated standards of “improvements”.
To repeal the ACA would require 60 votes in the Senate. To cut some or all funding for the premium assistance and Medicaid expansion components of the ACA through the Budget Reconciliation process may only require a simple majority in both Houses. Trump might lack the votes for either course. The public overwhelmingly supports the ACA by a 62/37 margin. https://www.kff.org/interactive/kff-health-tracking-poll-the-publics-views-on-the-aca/#?response=Favorable--Unfavorable&aRange=twoYear Trump and the GOP did not run on repealing the ACA, in fact Trump said he would not repeal the ACA and would only seek to improve it. There is no voter mandate for the GOP to repeal the ACA. To seek to repeal or weaken the ACA’s coverage for many millions of American citizens would be a jarring juxtaposition to his signature priority of extending the Trump tax cuts for billionaires which expire in 2025 and for large corporations.
The simplest step for Trump, if he still means to weaken the ACA, would be to allow the Biden improvements to expire in 2025. What did the Biden improvements do? 1) they eliminated the premiums for those with incomes less than 150% of the federal poverty level (FPL); 2) they eliminated the 400% of FPL cap on premium assistance; 3) they increased premium assistance for those with incomes between 150 and 400% of FPL, and 4) they eliminated the family glitch. They made Exchange coverage much more affordable for the American workers it serves, and American citizens responded in record numbers to the improvements by enrolling in the Exchanges.
What does all this mean? The federal poverty level for an individual is roughly $15,000, and thus 150% of FPL is about $22,500. https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines Therefore, an individual with an income of less than $22,500 would now have to pay no premiums for their coverage in the state and federal Marketplaces (Covered California in our state).
400% of FPL is about $60,000 annual income. Prior to the Biden improvements, an individual, with an income in excess of $60,000 annually, could receive no premium assistance. Under the Biden improvements, that income cap was increased to 600% of FPL ($90,000 annually), and individuals and families with incomes above 400% of FPL could receive premium assistance in the Marketplace. This is particularly beneficial to the middle-aged, middle-income individuals and families. E.g. “For a family of four with an income of $120,000, the law saves $6,604 on their yearly premiums; for a married couple in their early 60s with an income of $75,000, the law saves $16,000 annually.” https://www.aft.org/hc/fall2024/chaney_harris_shoup_twomey
In the Affordable Care Act, individuals purchasing their individual health coverage through the Exchanges have a choice of plans and a choice of levels of coverage. Individuals may choose coverage ranging from 60% to 90% of health costs. https://www.coveredca.com/support/before-you-buy/metal-tiers/ Bronze coverage covers 60% of health costs – in other words you will have high copays and deductibles when you seek care, but lower monthly premiums. Silver covers 70% of health costs; gold covers 80%. Most people with employment-based coverage and Medicare have a gold level of coverage or better. Platinum covers 90% of health costs; in other words, you would have low or minimal copays and deductibles. Catastrophic coverage (50% of health costs) is also available to young (under 30) individuals seeking lower premiums but with the tradeoff of very high exposure to cost sharing when you need medical care.
Premium assistance in the Exchanges is linked to the second lowest cost silver plan; if you choose a more costly plan, you pay the incremental costs, and if you choose a less costly plan, you keep all the savings in your premiums. As a result of these incentives, most customers with premium assistance choose the silver level plans or the bronze level plans, which cost a good bit less than the gold or platinum levels of coverage on a monthly basis, but they may face much higher cost sharing when they get sick and need care.
There are also ACA provisions to reduce cost sharing (copays and deductibles). These cost sharing reductions are only available to those customers enrolling in silver coverage, and they phase down and out when your income reaches 250% of the federal poverty level – e.g. $36,450 for an individual or $62,150 for a family of three.
In California’s Marketplace (Covered California), individuals may choose from among 3 to 6 plans, depending on the population size of the counties in your geographic region. https://www.coveredca.com/support/before-you-buy/health-plan-options/ They typically include the large name brand plans like Kaiser, Blue Cross, Blue Shield, and Health Net, and in Southern California counties, Molina. In rural counties with very small populations like Modoc, Del Norte or Glenn, there are likely only two choices – often Blue Cross or Blue Shield or sometimes United.
The “family glitch” was fixed by the Biden Administration in 2023. https://www.healthinsurance.org/obamacare/irs-regulations-fix-the-acas-family-glitch-as-of-2023/ The family glitch refers to a rule that kept families who were offered family coverage through employment from accessing premium assistance and cost sharing in the Marketplaces (Exchanges), even when their family premiums from employment-based coverage were very unaffordable, leaving family members uninsured. The measure of unaffordability is now slightly above 9% of income. So, if the family’s share of premiums for employer offered health coverage is unaffordable (i.e. it exceeds 9.12% of their family’s income), they can now apply for, qualify for, and receive financial help with the costs of coverage through the Exchanges (Covered California in our state). Why is this important? Some employers pay for 80-90% of their employee’s coverage, but only 60% of the premiums for family coverage, placing a real burden on the family budgets of moderate income workers.
A Trump Administration, that was seeking to improve the ACA for the American people, could do any or all of the following that would make the program more affordable and work better for the working families it serves: 1) encourage the 10 heretofore reluctant GOP governors and legislatures to adopt the Medicaid expansion; 2) keep the Biden improvements discussed above that expire in 2025; 3) link the premium assistance to the second lowest cost gold plan, so that customers get better coverage (i.e. fewer copays and deductibles) and thus better access to care, 4) increase the eligibility and formula for cost sharing reductions so that more moderate income working families can qualify and will have better and more affordable access to care, and 5) increase the premium assistance levels so that individual and family customers in the Exchanges will have more affordable premiums.