Throughout their push to dismantle the Affordable Care Act, Republicans have said they are on a “rescue mission” to save a law that—depending on the hyperbole-du-jour—is either imploding, collapsing, exploding or in a death spiral.
Political posturing though it is, that kind of rhetoric is important since it will undoubtedly shape the way many Americans view the GOP’s healthcare policy efforts.
And it sounds great: Who wouldn’t want to support a mission to rescue us from rising premiums and insurer dropouts?
Well, first, it’s important to note that it’s inaccurate to conflate the whole of the ACA with just the individual market, through which only a small share of people in this country gets insurance.
But semantics aside, Republicans’ rhetoric has another problem: They are on a “rescue mission” in the same way that a firefighter with a penchant for arson races to put out a blaze he set himself.
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To be sure, the law as designed was never perfect. Insurers have made decent arguments that the way special enrollment periods work, for instance, has led some consumers to game the system and only get coverage when they’re sick, skewing the overall risk pool for the worse. They’ve also taken issue with the way the permanent risk adjustment program was set up—and even sued the government because of it.
But Republicans themselves have also been behind some of the forces that pushed the ACA marketplaces onto increasingly unstable ground. Their determined efforts to obstruct President Barack Obama’s agenda—which Democrats are now emulating—led them to relentlessly try to weaken parts of his signature domestic policy achievement. Sometimes, they even succeeded.
Here are some notable examples:
The budget provision that took the teeth out of risk corridors
One of the two temporary components of the ACA’s “three Rs,” the risk corridor program aims to cushion insurers from extreme losses in the exchanges. It works by requiring those with lower-than-expected costs to pay into the program, while those with higher-than-expected costs receive payments.
However, an omnibus spending bill passed by Congress in late 2014 contained a provision that prohibited the Department of Health and Human Services from spending any more money than it takes in through the program. Sen. Marco Rubio, R.-Fla., one of the fiercest critics of the risk corridor program, touted the provision as a tool to keep HHS from giving taxpayer-funded bailouts to insurers.
As a result, while the government ended up owing insurers $2.87 billion for 2014, it was only able to pay out 12.6% of that. Given how much the government still owed insurers for 2014, all of its 2015 collections went toward that balance—though it still was only able to pay $95 million toward the 2014 payments.
In an effort to recoup the funds they are owed, a slew of insurers filed lawsuits. One, Moda Health, scored a victory this February when a federal judge ruled that the government owed it $214 million in risk corridor payments.
Ultimately, making the risk corridor program budget neutral undermined a key portion of the ACA that was meant to stabilize the marketplaces in their early years. You could also argue it damaged competition in the exchanges, as it hastened the demise of many of the CO-OPs.
The Supreme Court case that made Medicaid expansion optional
In National Federation of Independent Business v. Sebelius, the NFIB and 26 states challenged the constitutionality of both Medicaid expansion and the ACA’s individual mandate. (Many of those states, though not all, were states that tend to vote Republican.)
In a 2012 ruling on the case, the Court upheld the individual mandate. But on the issue of Medicaid expansion, the justices essentially ruled to make it optional for states.
Ultimately, the ruling had the effect of undermining some of the ACA’s core goals—one of the big ones being expansion of coverage.
In fact, 2.6 million poor uninsured adults fell into a “coverage gap” that resulted from state decisions not to expand Medicaid—meaning their income is above current Medicaid eligibility but below the lower limit for marketplace premium tax credits, according to a KFF issue brief.
Even voices on the right admitted that the ruling was bad for the ACA.
“The Court’s decision likely puts the law on a faster pace to collapse,” Nina Owcharenko, director of The Heritage Foundation’s Center for Health Policy Studies, wrote in a 2012 piece.
What’s more, a report out late last week from Standard & Poor’s hinted at an interesting correlation between Medicaid expansion and the ACA exchanges. Four out of the five states that have just one insurer on their exchange in 2017, it noted, also didn't expand Medicaid.
The lawsuit challenging cost-sharing reduction payments
In another case, formerly known as House v. Burwell, Republican lawmakers led by then-House Speaker John Boehner, R-Ohio, challenged the constitutionality of the ACA’s cost-sharing reduction payments (CSRs). The government pays these subsidies to health insurers, which they then pass on to help consumers afford their out-of-pocket healthcare costs.
The plaintiffs argued that the Obama administration set aside billions of dollars to fund CSRs that Congress never appropriated. The real point, though, was to weaken the ACA. U.S. District Court Judge Rosemary M. Collyer ruled in Republicans’ favor in May 2016.
As expected, the Obama administration appealed, but after Donald Trump was elected president, the court agreed to put the case on hold while the new Republican administration decided how to handle it. Speaker Paul Ryan said recently that the House won’t drop the case, but added that CSRs will continue to be funded while the case is litigated.
Insurance industry groups have said they need more certainty than that in order to decide about their participation in the marketplaces next year.
They seemed to get that Monday, as the Department of Health and Human Services wrote in an email to the New York Times that "the precedent is that while the lawsuit is being litigated, the cost-sharing subsidies will be funded. It would be fair for you to report that there has been no policy change in the current administration."
However, in a statement sent to The Hill, HHS spokeswoman Alleigh Marre clarified that “the administration is currently deciding its position on this matter."
For their part, both America's Health Insurance Plans and the Alliance of Community Health Plans noted that they would like even more clarity about whether CSR funding will continue even after the lawsuit is resolved.
What now?
With the risk corridor program and the ruling on Medicaid expansion, the damage had already been done. But Republicans still have a choice when it comes to funding CSR payments long-term.
They could stick to their fiscally conservative principles and stop funding them, but since the long-promised ACA repeal has failed to materialize, that path risks torpedoing the individual markets they are now charged with keeping afloat.
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The Trump administration also has other options to undermine the law while it works to repeal it. It has already chosen some of those options, such as scaling back open enrollment outreach and weakening enforcement of the individual mandate.
But it isn't too late for Republicans to rethink that course and administer the law responsibly for as long as they are charged with doing so. That, at last, would mean they're taking their “rescue mission” talk seriously.
Editor's note: This article has been updated to reflect new information about HHS' position on funding cost-sharing reduction payments. The agency says it has not yet decided what to do about the subsidies.