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Los Angeles Times
03-07-2025
- Health
- Los Angeles Times
States brace for reversal of Obamacare coverage gains under Trump's budget bill
Shorter enrollment periods. More paperwork. Higher premiums. The sweeping tax and spending bill pushed by President Trump includes provisions that would not only reshape people's experience with the Affordable Care Act, but also sharply undermine the gains in health insurance coverage associated with it, according to some policy analysts. The moves affect consumers and have particular resonance for the 19 states (plus Washington, D.C.) that run their own ACA exchanges. Many of those states fear that the additional red tape — especially requirements that would end automatic reenrollment — would have an outsize impact on their policyholders. That's because a greater percentage of people in those states use those rollovers versus shopping around each year, which is more commonly done by people in states that use the federal marketplace. 'The federal marketplace always had a message of, 'Come back in and shop,' while the state-based markets, on average, have a message of, 'Hey, here's what you're going to have next year, here's what it will cost; if you like it, you don't have to do anything,'' said Ellen Montz, who oversaw the federal ACA marketplace under the Biden administration as deputy administrator and director at the Center for Consumer Information and Insurance Oversight. She is now a managing director with the Manatt Health consulting group. Millions — perhaps up to half of enrollees in some states — may lose or drop coverage as a result of that and other changes in the legislation combined with a new rule from the Trump administration and the likely expiration at year's end of enhanced premium subsidies put in place during the covid-19 pandemic. Without an extension of those subsidies, which have been an important driver of Obamacare enrollment in recent years, premiums are expected to rise 75% on average next year. That's starting to happen already, based on some early state rate requests for next year, which are hitting double digits. 'We estimate a minimum 30% enrollment loss, and, in the worst-case scenario, a 50% loss,' said Devon Trolley, executive director of Pennie, the ACA marketplace in Pennsylvania, which had 496,661 enrollees this year, a record. Drops of that magnitude nationally, coupled with the expected loss of Medicaid coverage for millions more people under the legislation Trump calls the 'One Big Beautiful Bill,' could undo inroads made in the nation's uninsured rate, which dropped by about half from the time most of the ACA's provisions went into effect in 2014, when it hovered around 14% to 15% of the population, to just over 8%, according to the most recent data. Premiums would rise along with the uninsured rate because older or sicker policyholders are more likely to try to jump enrollment hurdles, while those who rarely use coverage — and are thus less expensive — would not. After a dramatic all-night session, House Republicans passed the bill, meeting the president's July 4 deadline. Trump is expected to sign the measure on Independence Day. It would increase the federal deficit by trillions of dollars and cut spending on a variety of programs, including Medicaid and nutrition assistance, to partly offset the cost of extending tax cuts put in place during the first Trump administration. The administration and its supporters say the GOP-backed changes to the ACA are needed to combat fraud. Democrats and ACA supporters see this effort as the latest in a long history of Republican efforts to weaken or repeal Obamacare. Among other things, the legislation would end several changes put in place by the Biden administration that were credited with making it easier to sign up, such as lengthening the annual open enrollment period and launching a special program for very low-income people that essentially allows them to sign up year-round. In addition, automatic reenrollment, used by more than 10 million people for 2025 ACA coverage, would end in the 2028 sign-up season. Instead, consumers would have to update their information, starting in August each year, before the close of open enrollment, which would end Dec. 15, a month earlier than currently. That's a key change to combat rising enrollment fraud, said Brian Blase, president of the conservative Paragon Health Institute, because it gets at what he calls the Biden era's 'lax verification requirements.' He blames automatic reenrollment, coupled with the availability of zero-premium plans for people with lower incomes that qualify them for large subsidies, for a sharp uptick in complaints from insurers, consumers, and brokers about fraudulent enrollments in 2023 and 2024. Those complaints centered on consumers' being enrolled in an ACA plan, or switched from one to another, without authorization, often by commission-seeking brokers. In testimony to Congress on June 25, Blase wrote that 'this simple step will close a massive loophole and significantly reduce improper enrollment and spending.' States that run their own marketplaces, however, saw few, if any, such problems, which were confined mainly to the 31 states using the federal The state-run marketplaces credit their additional security measures and tighter control over broker access than for the relative lack of problems. 'If you look at California and the other states that have expanded their Medicaid programs, you don't see that kind of fraud problem,' said Jessica Altman, executive director of Covered California, the state's Obamacare marketplace. 'I don't have a single case of a consumer calling Covered California saying, 'I was enrolled without consent.'' Such rollovers are common with other forms of health insurance, such as job-based coverage. 'By requiring everyone to come back in and provide additional information, and the fact that they can't get a tax credit until they take this step, it is essentially making marketplace coverage the most difficult coverage to enroll in,' said Trolley at Pennie, 65% of whose policyholders were automatically reenrolled this year, according to KFF data. Federal data shows about 22% of federal sign-ups in 2024 were automatic-reenrollments, versus 58% in state-based plans. Besides Pennsylvania, the states that saw such sign-ups for more than 60% of enrollees include California, New York, Georgia, New Jersey, and Virginia, according to KFF. States do check income and other eligibility information for all enrollees — including those being automatically renewed, those signing up for the first time, and those enrolling outside the normal open enrollment period because they've experienced a loss of coverage or other life event or meet the rules for the low-income enrollment period. 'We have access to many data sources on the back end that we ping, to make sure nothing has changed. Most people sail through and are able to stay covered without taking any proactive step,' Altman said. If flagged for mismatched data, applicants are asked for additional information. Under current law, 'we have 90 days for them to have a tax credit while they submit paperwork,' Altman said. That would change under the tax and spending plan before Congress, ending presumptive eligibility while a person submits the information. A white paper written for Capital Policy Analytics, a Washington-based consultancy that specializes in economic analysis, concluded there appears to be little upside to the changes. While 'tighter verification can curb improper enrollments,' the additional paperwork, along with the expiration of higher premiums from the enhanced tax subsidies, 'would push four to six million eligible people out of Marketplace plans, trading limited fraud savings for a surge in uninsurance,' wrote free market economists Ike Brannon and Anthony LoSasso. 'Insurers would be left with a smaller, sicker risk pool and heightened pricing uncertainty, making further premium increases and selective market exits [by insurers] likely,' they wrote. Appleby writes for KFF Health News, a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.
Axios
01-07-2025
- Health
- Axios
What's at stake from GOP megabill's coverage losses
Nearly 12 million people would lose their health insurance under President Trump's "big, beautiful bill," an erosion of the social safety net that would lead to more unmanaged chronic illnesses, higher medical debt and overcrowding of hospital emergency departments. Why it matters: The changes in the Senate version of the bill could wipe out most of the health coverage gains made under the Affordable Care Act and slash state support for Medicaid and SNAP. "We are going back to a place of a lot of uncompensated care and a lot of patchwork systems for people to get care," said Ellen Montz, a managing director at Manatt Health who oversaw the ACA federal marketplace during the Biden administration. The big picture: The stakes are huge for low-income and working-class Americans who depend on Medicaid and subsidized ACA coverage. Without health coverage, more people with diabetes, heart disease, asthma and other chronic conditions will likely go without checkups and medication to keep their ailments in check. Those who try to keep up with care after losing insurance will pay more out of pocket, driving up medical debt and increasing the risk of eviction, food insecurity and depleted savings. Uninsured patients have worse cancer survival outcomes and are less likely to get prenatal care. Medicaid also is a major payer of behavioral health counseling and crisis intervention. Much of the coverage losses from the bill will come from new Medicaid work reporting requirements, congressional scorekeepers predict. Work rules generally will have to be implemented for coverage starting in 2027, but could be earlier or later depending on the state. Past experiments with Medicaid work rules show that many eligible people fall through the cracks verifying they've met the requirements or navigating new state bureaucracies. Often, people don't find out they've lost coverage until they try to fill a prescription or see their doctor. States typically provide written notices, but contacts can be out of date. Nearly 1 in 3 adults who were disenrolled from Medicaid after the COVID pandemic found out they no longer had health insurance only when they tried to access care, per a KFF survey. Zoom out: The Medicaid and ACA changes will also affect people who keep their coverage. The anticipated drop-off in preventive care means the uninsured will be more likely to go to the emergency room when they get sick. That could further crowd already bursting ERs, resulting in even longer wait times. Changes to ACA markets in the bill, along with the impending expiration of enhanced premium subsidies, may drive healthier people to drop out, Montz said, skewing the risk pool and driving up premiums for remaining enrollees. States will likely have to make further cuts to their safety-net programs if the bill passes in order to keep state budgets functioning with less federal Medicaid funding. The other side: The White House and GOP proponents of the bill say the health care changes will fight fraud, waste and abuse, and argue that coverage loss projections are overblown. Conservative health care thinkers also posit that there isn't strong enough evidence that public health insurance improves health. Reality check: Not all insurance is created equally, and many people with health coverage still struggle to access care. But the bill's impact would take the focus off ways to improve the health system, Montz said. "This is taking us catastrophically backward, where we don't get to think about the things that we should be thinking about how to best keep people healthy," she said. The bottom line: The changes will unfold against a backdrop of Health Secretary Robert F. Kennedy Jr.'s purported focus on preventive care and ending chronic illness in the U.S.
