Wednesday, February 21 , 2018, 1:50 am | Overcast 48º


Lou Cannon: Despite Stormy Republican Seas, Affordable Care Act Remains Unsinkable

Despite dire predictions of its demise, the Affordable Care Act is alive and flourishing as it nears its eighth birthday in 2018. Medicaid is flourishing, too, but with new controversy over pending work requirements.

Nicknamed Obamacare after then-President Barack Obama, who proposed it and signed it into law, the ACA has survived a troubled childhood. The U.S. Supreme Court saved it from being strangled in its cradle over constitutional issues.

Last year the law was on life support as Republican congressional leaders and President Donald Trump tried repeatedly to repeal it. By narrow margins the Senate rejected every attempt.

Still, the ACA’s prognosis for 2018 seemed bleak when the Trump administration slashed advertising and outreach for Obamacare and halved the sign-up period for obtaining coverage through the federal website.

“Obamacare is finished,” Trump declared on the eve of the open enrollment period. “It’s dead. It’s gone.”

But it isn’t gone. More than 8.8 million people enrolled for ACA coverage, nearly as many as in the longer enrollment period in 2016.

Enrollment has also been strong in California and 10 other states and the District of Columbia that maintain their own health-care exchanges. Since the enrollment period was extended in many of these states, full figures are not yet available.

Obamacare’s greatest impact has been on Medicaid, the federal-state program that provides health care for the poor and disabled. More than 74 million people are enrolled in Medicaid, about a third more than when Obamacare began.

The ACA allows states to provide Medicaid to people making up to 138 percent above the poverty line. Enticed by an incentive that originally provided a full federal subsidy for new enrollees, 31 states and the District of Columbia have expanded Medicaid since the ACA took effect.

Partly because of this expansion, Medicaid has become the second largest item in most state budgets after education, rising as a percentage of state spending from 20.5 percent in fiscal 2008 to 29.0 percent in fiscal 2017, according to the National Association of State Budget Officers.

Costs increased in 2017 when states were required to assume 5 percent of the costs of new Medicaid enrollees. This will jump to 10 percent in 2020.

The increased cost of Medicaid has caused budget anxiety in many states and prompted 10 of them, all with Republican governors, to seek federal waivers allowing them to experiment with cost-cutting measures.

The most controversial of these experiments is a work requirement for Medicaid enrollees, known by the euphemism of “community engagement.” This month the Trump administration allowed Kentucky to impose the first work requirement in Medicaid’s history and signaled it would look favorably on similar requests from nine other states: Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah and Wisconsin.

In Kentucky, Republican Gov. Matt Bevin celebrated the approval of a work requirement as “the most transformational entitlement reform that has been seen in a quarter of a century” while advocates for the poor threatened lawsuits.

“The (Bevin) administration has their chicken-and-egg story completely wrong — they say people need to work to get healthy,” Sheila Schuster, a Kentucky health-care advocate told The New York Times.

“We all know that health is the foundation from which people go to school, go to work and keep their employment ... The administration is not only going backward, but doing it for completely the wrong reasons.”

Bevin countered with Executive Order 2018-040, which orders state officials to terminate the state’s Medicaid expansion in its entirety if the work requirement is thrown out by the courts.

Under the Kentucky plan, starting in July, most Medicaid recipients aged 19 to 64 who are not disabled will be expected to work at least 20 hours a week or do an equivalent amount of volunteer work. Pregnant women, full-time students, primary caretakers of dependents, homeless people and those deemed medically frail will be exempted.

Kentucky, one of only three Southern states to expand Medicaid under the ACA, has been a poster child for Obamacare.

According to the Centers for Medicare & Medicaid Services, Kentucky’s enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) increased by 108 percent from 2013, when Obamacare became operative, to October 2017. This is by far the largest percentage increase of any state, and more than three times as much as the national average increase of 29 percent.

Kentucky’s uninsured rate fell 9.2 percentage points from 2013 to 2016, reaching a low of 5.1 percent, according to U.S. census data.

Total Medicaid enrollment in Kentucky, including children and the elderly, stood at 1.3 million as of October 2017, nearly 30 percent of the Bluegrass State’s entire population. These included 650,867 adults, three-quarters of whom were added by the ACA expansion.

The Bevin administration estimates that the work requirement would apply to 350,000 of these adults, although it’s unclear how many of them are already employed. Nationally, 60 percent of Medicaid recipients are working, according to the Kaiser Family Foundation.

Medicaid has become the nation’s largest health program, enrolling one in five Americans. Total Medicaid costs in 2016, the last year for which complete figures are available, were $553 billion with 63 percent paid by the federal government and 37 percent by states.

After increasing the federal budget deficit with a tax bill passed by Congress in December, Republicans hope to lower it at the expense of Medicaid and other health-care programs. A budget resolution passed by Congress along party lines in October lacks the force of law but provides a window on GOP priorities. All non-Medicare health programs, principally the ACA and Medicaid, would see a cut of $1.3 trillion or nearly 30 percent by 2027, according to the Center on Budget and Policy Priorities.

While Medicaid is a pressing issue, states are more concerned in the short run with the congressional deadlock over CHIP, which provides health care for 9 million children of working parents with income too high to qualify for Medicaid.

Funding for CHIP, created in 1997 with bipartisan support, expired in September and the popular program has become a pawn in the congressional struggle to reach agreement on a budget resolution. Several states have warned Congress they cannot fund CHIP on their own after Jan. 31.

Going forward, expect Trump and congressional Republicans to keep the pressure on Obamacare. The tax bill abolished a provision of the ACA that required most Americans to obtain health insurance or pay a penalty, beginning in 2019. Despite Trump’s claim that removal of this requirement “essentially” repealed Obamacare, the ACA remains healthy and in force.

A.M. Best, a global credit rating organization, found that insurers have adapted to the uncertainty surrounding the Trump administration’s handling of the law and predicted that ACA insurance markets “will be relatively stable through 2018,” The Hill reported.

Insurance markets would become even more stable if Congress passes a pending bipartisan bill restoring payments to insurers for discounts they gave low-income ACA customers for health policy deductibles and other expenses.

Trump cut off these payments, estimated at $8 billion in 2018. During the debate on the tax bill, however, he promised Sen. Susan Collins, R-Maine, that he would sign a bill restoring the payments if it reaches his desk.

Trump is also expected to sign an executive order allowing Americans to purchase cheaper health insurance policies that do not meet the comprehensive standards of the Affordable Care Act. Most Democrats oppose this action, which they say gives Americans an illusion of coverage rather than effective health insurance.

Overall, Trump and congressional Republicans have managed to damage the Affordable Care Act without destroying it. A renewed attempt to repeal the ACA in a midterm election year would be an uphill battle, especially with a reduced majority in the Senate, which the GOP now controls 51-49.

The Democratic commitment to preserving the Affordable Care Act and the GOP’s continued hostility to the law guarantee that health care will be a prime political issue in this year’s midterm elections. When Republicans swept to power in the House of Representatives in 2010, repeal of Obamacare was their principal battle cry.

But polls show that Obamacare is more popular now than it was then. It would be ironic if the issue that brought Republicans victory in 2010 proved their undoing in 2018.

Lou Cannon, a Summerland resident, is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally. Click here to read previous columns. The opinions expressed are his own.

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