Don’t call it a comeback, the ACA has been here for a decade. But it’s going through a revitalization period in a new administration.
Four years ago, in the early days of the Trump administration, it seemed as if the Affordable Care Act was on death’s door. Republicans vowed to repeal the health law and had the Senate majority to make it happen.
While then-Republican controlled Congress did remove the individual mandate through a budget reconciliation, the law somehow survived, even if it was weakened. However, the four years of the Trump administration meant a decline in enrollment as his Department of Health and Human Services decided to cut back significantly on enrollment campaign efforts.
Around the same time, major insurers like Aetna, UnitedHealthcare and Humana started bailing out of ACA exchanges. These departures meant that in some markets, people were left with only one insurance option—or in some cases none at all. According to Kaiser Family Foundation’s analysis in 2017, 31 percent of counties in the U.S. only had one insurer option on an ACA marketplace.
To top it off, in 2018, the State of Texas, encouraged by the Trump administration, sued the federal government and claimed that without the individual mandate, the entire law should be struck down. The U.S. District Judge in the Northern District of Texas agreed in a decision that was upheld by the Fifth Circuit Court of Appeals. It was eventually argued in front of the Supreme Court in November, with California leading a coalition of other states defending the ACA.
Despite a conservative majority in the highest court, legal experts are certain that the health law will be upheld based on the fact the majority of Justices seem to indicate the mandate can be severed from the rest of the law. With President Biden now in office, the government’s official stance on the lawsuit changed from supporting efforts to dismantle the ACA to requesting the Court keep the law in place. Biden also re-opened ACA enrollment for a special period between February 15 and May 15.
A different Kaiser Family Foundation (KFF) analysis reveals that there are “15 million uninsured people who could be purchasing Marketplace coverage, but aren’t taking it.” Of those 15 million, 8.9 million could receive free or subsidized care. Moreover, President Biden and a Democratic-led Congress may be poised to increase subsidies for the ACA. The House Ways and Means Committee voted 24-18 along party lines last week to approve a section of a $1.9 trillion COVID-19 relief package that would increase ACA subsidies for middle-class Americans who make more than 400 percent of the poverty level, or about $100,000 for a family of four.
KFF’s Larry Levitt wrote on Twitter, “The increased ACA premium subsidies under the House COVID relief plan, along with a new outreach campaign, could supercharge the upcoming reopened enrollment period and help to reverse recent increases in the number of people uninsured.”
Insurers coming back to ACA
All this is underpinned by the fact insurers are entering (or in some cases re-entering) ACA markets at a rate that has not been seen since the earliest days of the health law. This week, CVS Health CEO Karen Lynch said that the company’s Aetna insurance division will re-enter ACA marketplaces in 2022.
“As the ACA has evolved, there is evidence of market stabilization and remedies to earlier structural issues. It’s now time to participate in these markets,” Lynch said. She added that there was clearly a big market for the individual plans and promised more details to come.
CVS Health/Aetna’s move back into the ACA mirrors a few other major insurers planning similar moves. In May, UnitedHealthcare announced it was offering ACA plans in Maryland, which increases its total coverage to four states including New York, Nevada and Massachusetts. However, there may be more regions to come, the company said.
“What you can count on is we’ll make no snap reactions to this situation in terms of making strategic decisions about going into markets. But we have given this considerable thought leading up to this crisis and through it all,” former UnitedHealthcare CEO David Wichmann said during an earnings call last year. Wichmann recently stepped down from the top role at the insurer.
In 2017, Cigna CEO David Cordani said that the health law was a challenging market for them. He wasn’t sure if the company would participate in the following year’s ACA exchange until it had received more guidance from the Trump administration. Cigna ended up participating in six markets.
It’s been quite a 180 since those days. In 2021, it is expanding to 79 new markets and has grown its reach to 220 counties across 10 states. Brian Evanko, president of Cigna’s government business, said in a statement released when they made the announcement, “We have maintained a continuous and growing presence in the individual exchanges since their launch in 2014, and are excited by the opportunity to serve even more customers in 2021 and beyond.”
Other health insurers are bull-ish on the ACA markets. In June of last year, Oscar Health, a tech-driven insurance company, announced that it will be expanding individual and family plans to 18 states and 47 markets in 2021. St. Louis-based Centene has plans to expand marketplace health insurance plans in 400 new counties across 13 states in 2021.
Last week, America’s Health Insurance Plans (AHIP), an industry trade group that spent money to defeat the ACA from becoming law, was part of an industry coalition, along with Blue Cross Blue Shield Association, that urged Congress to expand ACA premium tax credits and cost-sharing reductions.
Kim Keck, president and CEO of the Blue Cross Blue Shield Association said in a statement, “While the country has made enormous strides in expanding coverage over the past decade, we must close the remaining gaps. Having health coverage means people can get the care they need, when they need it, so they can live healthier, more secure lives.”