Trump, the ACA, and the Widening Gap Between States

The battle over health care is moving to the states.

The most immediate effect of the recent steps taken by Donald Trump and congressional Republicans to unravel the Affordable Care Act will be to create an even deeper gulf between red and blue states in the availability and quality of health insurance. An array of blue states are exploring ways not only to blunt Trump’s moves, but also to reach beyond the ACA with new mechanisms to expand coverage. Simultaneously, many red states are leaning into the rollback—both by seeking to limit access to Medicaid, and by embracing Trump’s efforts to deregulate insurance markets in ways that will restore the pre-ACA separation between the healthy and sick.

“In the states that don’t act to strengthen their regulation, you are going to see these non-group-insurance markets weaken” by eroding the risk-sharing between the healthy the and sick that the ACA required, Linda Blumberg, a fellow at the Urban Institute who closely studies the law, says. “It really takes us major steps back to where we were prior to [the law].”

Two big moves from Trump and congressional Republicans are expanding this wedge between the states. The first is the tax bill’s provision repealing the ACA’s individual mandate, which required all Americans to buy insurance. The second is the administration’s recent proposal to significantly expand the availability of “short-term” health plans that don’t guarantee minimum benefits or prohibit discrimination against consumers with preexisting health problems.

Those two measures encourage healthier people to leave the ACA exchanges, and either purchase the skimpy, but less expensive, short-term plans or forego insurance altogether. In a recent study, the Urban Institute projected about 9 million people would abandon the exchanges for one of those options. That would leave an older and sicker population remaining on the exchanges, which would raise premiums and reduce access to care, particularly for those who earn too much to qualify for the federal subsidies the ACA established.

But states have a surprising degree of autonomy to block Trump’s moves, and blue states are positioning themselves to do so. Five Democratic-leaning states in the Northeast already functionally prohibit the sale of short-term plans, and several others—Washington state has moved the quickest—may join them with regulatory or legislative limits.

Even more ambitiously, about a half-dozen states are examining ways to restore a mandate on individuals to buy insurance. The conversations are most advanced in Maryland, where state legislators are racing against an April 9 adjournment date to pass an individual mandate with an intriguing twist: The legislation would allow anyone without insurance to funnel their penalty into an account they could apply to buying coverage the next year.

 

 

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