ACA add-ons could bring uninsured rate down from 12% to 7.3%, study finds

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Congress could fix the Affordable Care Act with some modest policy fixes, according to a recent study. But Republican Congressional leaders haven't shown much interest in such options. (Pixabay)

Congress has the tools to bolster the ACA and provide insurance to more than 12 million additional people, new research shows.

The question remains: Will lawmakers use those policy levers? 

While the uninsured rate fell in the years following the ACA's passage, the law has endured heavy damage over the past few years. This has allowed the number of uninsured people to creep back up, to an estimated 32 million in 2020—or 12% of the nonelderly population.

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But a suite of policies, if passed together, could insure 12.2 million people, cutting the uninsured rate to 7.3%, the Urban Institute found in a report. However, the suggested changes would expand federal insurance programs in a way that hasn't received much support from Washington in recent years. The changes include:

  1. Reinstate the individual mandate and cost-sharing reductions.
  2. Prohibit "skimpy" or short-term health plans.
  3. Expand Medicaid eligibility in all states for families with incomes up to 138% of the poverty line.
  4. Use auto-enrollment from the TANF and SNAP programs to streamline the expansion of Medicaid.
  5. Increase the ACA's financial assistance and adjust its tax credit eligibility.
  6. Introduce a permanent federal reinsurance program for non-group coverage.
  7. Cap provider reimbursements at levels "somewhat above Medicare levels."

If all these changes were taken up, the 2020 uninsured rate would fall to 20 million.  Federal spending on acute care for the nonelderly would rise from an estimated $418.9 billion to an estimated $538.1 billion.

"This approach provides an option for policymakers interested in increasing insurance coverage, improving affordability, and introducing a new cost-containment approach without overhauling the entire system," the Urban Institute wrote in the report.

Such a program might not look out of place in an Obama or Clinton administration. But many of the suggestions are directionally opposed from the stated intentions of the Trump administration and Congressional Republicans—not to mention industry groups. HHS expanded short-term health plans this year, and industry groups would obviously balk over capping provider reimbursement at levels anywhere near Medicare. 

RELATED: Trump administration finalizes expansion of short-term health plans

In fact, all three branches of government have come at the ACA since President Trump's election. First, the administration took executive action to weaken the ACA marketplaces, such as canceling cost-sharing reduction payments and cutting funding for enrollment outreach.

Then, in 2017, Congress zeroed out the law's individual mandate penalty through its tax reform legislation. With the mandate gone, insurers anticipated losing healthy enrollees, leaving them with sicker, more expensive populations. Insurers spiked premiums in anticipation of the move.

And most recently, a Texas judge ruled that Congress' repeal of the individual mandate made the entire ACA unconstitutional. While this decision is sure to be challenged, it could bring the law back to the Supreme Court—where newly appointed Justices Neil Gorsuch and Brett Kavanaugh will now have a chance to weigh in.

RELATED: Texas judge strikes down ACA as unconstitutional, but long legal path remains

House Democrats, who will take control of the chamber next year, may attempt to push some of these options, but in general Democratic energy has moved toward larger visions of healthcare policy, like a Medicare buy-in or some form of single payer system

Still, the Urban Institute's suggestions present an alternative—one that would remove any doubts about the ACA's constitutionality, wouldn't deviate dramatically from the status quo, and might make healthcare more affordable for the middle class. 

"Under these policies, a family of four (two 35-year-old parents and two children) with income of 350% of FPL (about $88,500) could save almost $1,900 on premiums with a deductible that is $3,300 lower than under current law," the Urban Institute said.

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