By Sean Wang
Trump to Eliminate Health Care Subsidies
On Thursday, October 12, amidst a number of failed attempts to repeal and replace the Affordable Care Act, President Trump ordered major changes to the nation’s insurance system. One of these major changes would be to remove crucial health care subsidies for low-income recipients by cutting off critical federal payments to insurers. In turn, because markets could collapse due to increased insurance policy costs or a decreased number of insurers, there is the potential for widespread disruption to markets across the nation. Some insurers worry that markets could collapse due to increased premiums or a decreased number of insurers. As a result, consumers who do not obtain insurance through their employers will not have a choice for a health plan. These plans are also predicted to be significantly more expensive, according to an LA Times article by Noam N. Levey and David Lauter.
These federal payments Trump is proposing to cut, known as cost-sharing reduction payments, currently amount to $7-$9 billion for this year and to almost $100 billion for the next decade. These payments are used to reimburse insurers for reducing insurance costs for their low-income clients. Although cutting these subsidies supposedly implies reduced budget costs, the Congressional Budget Office found in its studies that instead there would be a net cost of $194 billion over the next ten years by removing cost-sharing reduction payments.
Cost-sharing reduction payments made to health insurers could, as Levey and Lauter state, mean the difference between an insurance plan with a $2000 deductible or $0 deductible for someone just above the poverty line. A concern for insurance companies is that, under the Affordable Care Act, they are required to offer low-deductible health plans. That is, insurers would need to find a way to provide affordable insurance plans to low-income people without the federal subsidies. As a result, the viable options seem to be increasing premiums across all plans and pulling out of markets.
While Speaker Paul Ryan (R-WI) praised Trump’s action as a way to give back the decision-making power to Congress, Trump has received bipartisan criticism for his measure. Representative Ilena Ros-Lehtinen (R-Fla) tweeted: “Cutting health care subsidies will mean more uninsured in my district @potus promised more access, affordable coverage. This does opposite.” Maine Senator Susan Collins (R-ME), a centrist Republican, who has opposed several recent GOP bills to repeal the Affordable Care Act, and Republican Nevada governor Brian Sandoval also criticized Trump. Furthermore, Congressional democrats Senator Chuck Schumer (D-NY) and Representative Nancy Pelosi (D-CA) said in a joint statement that Trump has “apparently decided to punish the American people for his inability to improve our healthcare system.” At least nineteen state Democratic attorney generals have said they will also sue the federal government to prevent the administration from taking action.
The greatest impacts come to individuals and families who make more than four times the poverty line; they could see their insurance providers pulled from the regional markets or see their premiums sharply increase. As a result, their access to insurance is either hindered or completely eliminated. While the process for making policy changes may not take effect until 2019, the implications of what may be to come are dire and must be addressed now.
Trump Administration Rolls Back Affordable Care Act Birth Control Mandate Redo
On Friday, October 6, the Trump administration released a notice through the Federal Register, announcing a major change to current employer standards for providing subsidized birth control. The official notice removes the federal requirement that employers must include birth control coverage in their insurance plans. In addition, employers can now be held exempt from providing contraception services on the basis of sincerely held religious beliefs or moral convictions.
The Federal Register’s official summary states that “these interim final rules expand exemptions to protect moral convictions for certain entities and individuals whose health plans are subject to a mandate of contraceptive coverage through guidance issued pursuant to the Patient Protection and Affordable Care Act.” The government notice also mentions that the government’s interest in providing contraceptive coverage does not require it to violate held “sincerely held religious beliefs.”
There does not seem to be a definition of what qualifies as “sincerely held religious beliefs.” In an LA Times article by Michael Hiltzik, however, Hiltzik believes that “the new policy applies to any employer claiming a religious or moral objection to offering contraceptive coverage, including even publicly traded for-profit corporations with no evident religious or moral character. Those claiming moral scruples won’t have to prove or validate them in any way.” As a result, there would be no effective checks on companies who claim religious or moral objections. Hiltzik also notes that, unlike that of the Obama administration, the new policy does not offer a workaround to protect employees from losing their contraceptive coverage. The Obama administration’s policy allowed employees of morally objecting employers to utilize their insurance to cover contraceptive coverage; in turn, the insurers would be reimbursed by the government. This solution is not available in the new policy; in fact, there is no solution at all.
Furthermore, the impacts of the policy could be potentially far-reaching: a New York Times article details a study conducted by the Obama administration study which found that more than 55 million women currently have access to birth control without co-payments because of the coverage mandate. To put this into perspective, approximately one in three women in the United States rely on this provision.
In addition, Hiltzik of the LA Times finds that the mandate for “contraceptives without cost-sharing sharply reducing women’s out-of-pocket spending on oral contraceptives; fewer than 5% of women of reproductive age had any out-of-pocket spending on those medications at all in 2014.” He also believes that the Department of Health and Human Services’ impact analysis gives a false impression; that is, the HHS’ analysis states that the policy change “will not affect over 99.9% of the 165 million women in the United States.” Hiltzik contends that the estimate is based off the assumption that only 200 employers would be affected. These employers, however, were not the only ones who have challenged the contraceptive mandate on religious or moral grounds. The true impacts have yet to be assessed, given that more companies now have the freedom to remove birth control from their insurance coverage with impunity. Any employer can utilize this policy change to their desire; as a result, the policy change could be severely detrimental to women who cannot necessarily afford contraceptive care outside of their employer insurance.
The policy change is not without backlash. Washington attorney general Bob Ferguson (D) believes that it violates the First Amendment as well as the Equal Protection Clause of the Fifth Amendment and provisions of the Civil Rights Act. There have also been responses from the attorney generals of Massachusetts, Maura Healey, and California, Xavier Becerra, who agree with Ferguson’s assessment. They also think that the new rules violate the First Amendment. The First Amendment bars government action “respecting an establishment of religion,” which all three attorney generals believe the motion has done. Attorney General Ferguson, in his statement suing in the US District Court for Western District of Washington, argues that “the new rules unlawfully contradict certain provisions of the Affordable Care Act, such as a prohibition against gender- or religious-based discrimination in health care access.” In other words, the new rules laid out by the Trump administration could violate certain guidelines set in the Affordable Care Act in terms of health care access.
The impacts of the rules changes are two-fold. Women’s access to birth control is now at their employer’s discretion. There are no cost-efficient ways in which women can obtain their birth control. Not only are these constraints harmful to women, but also arguably unlawful. Furthermore, employers who choose to remove women’s birth control as a part of their health insurance plans can do so under the vague assertions of “moral or religious reasons.” Giving companies this legal precedence to deny access to a good or service blurs the lines between church and state.
Sean Wang is a first year at Columbia College planning to study biochemistry and pre-med. He is a new writer hoping to focus on healthcare policy and other global health issues. His column detailing national health care updates runs monthly.