Affordable Care Act: An Overview Karen Pollitz, Senior Fellow Kaiser Family Foundation March 1, 2019

Sources of Health Insurance Coverage for Non-Elderly, 2012-2017 SOURCE: KFF analysis of the 2013, 2018 American Community Survey, US Census Bureau.

ACA Made Specific Changes to Employer-Sponsored Coverage and Expanded Medicaid Specific provisions affected employer-sponsored coverage Pre-existing condition exclusion periods prohibited, all plans Other specific changes for all plans include: Cover dependents to age 26 Cover preventive services without cost-sharing No annual, lifetime dollar limits Out-of-pocket maximum for in-network cost sharing ($7,900 in 2019) Large employer mandate Share of population covered by ESI has remained relatively stable Significant eligibility expansion for Medicaid Pre-ACA, eligibility was categorical (children, parents, disabled, or elderly) ACA expanded eligibility to 138% FPL, federal government pays 90% of cost in 2020 Supreme Court ruled in 2012 that expansion is a state option In 2017, 12.7 million Medicaid enrollees were eligible because of the expansion In 2017, 2.2 million poor adults in non-expansion states, in the “coverage gap”

Status of State Medicaid Expansion Decisions WY WI WV WA VA VT UT ◊ TX TN SD SC RI PA OR OK OH ND NC NY NM NJ NH NV NE ◊ MT MO MS MN MI MA MD ME◊ LA KY KS IA IN IL ID ◊ HI GA FL DC DE CT CO CA AR AZ AK AL Adopted (37 States including DC) Not Adopting At This Time (14 States) NOTES: Current status for each state is based on KFF tracking and analysis of state activity. ◊Expansion is adopted but not yet implemented in ID, ME, NE, and UT. (See link below for additional state-specific notes). SOURCE: “Status of State Action on the Medicaid Expansion Decision,” KFF State Health Facts, updated January 4, 2019. https://www.kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/

ACA Substantially Changed Non-Group Coverage Standards for ACA-compliant policies No medical underwriting Pre-existing condition exclusion periods prohibited; Guaranteed-issue and renewability Modified community rating; rates vary by age (3:1), family size, geography, tobacco (1.5:1) Benefit and cost sharing standards 10 essential health benefits (EHB) categories required Metal tiers define cost-sharing levels; out-of-pocket maximum for in-network cost sharing Subsidies Premium tax credits for eligible individuals 100% to 400% FPL Cost sharing reductions (CSR) for eligible individuals 100% to 250% FPL Marketplaces administer subsidies, conduct annual open enrollment, facilitate plan comparison and choice, provide consumer assistance State flexibility waivers authorized (Section 1332) Individual Mandate Congress reduced penalty to zero, effective in 2019 Non-compliant policies still exist Grandfathered, “grandmothered” plans don’t comply; cannot sell to new policyholders Short-term limited duration insurance doesn’t comply; can sell to new policyholders

Average combined annual deductible, medical and Rx, self-only Many Marketplace Plans Have High Deductibles, Cost-Sharing Subsidies (CSR) Apply In Silver Plans Average combined annual deductible, medical and Rx, self-only SOURCE: Healthcare.gov data for 39 states with Federally Facilitated or Partnership exchanges. FPL refers to Federal Poverty Level.

Marketplace Benchmark Plan Premiums Have Increased, but Stable For Those With Subsidies National average monthly premiums, tax credit amounts, and individual contributions for the benchmark Silver plan for a 40-year old consumer with income at 200% FPL, 2014-2019 SOURCE: Kaiser Family Foundation Health Insurance Marketplace Calculator

Factors Contributing to Premium Increases in Benchmark Plans Issuers adopt one-time price correction in response to under-pricing, losses in early years (2017) Termination of CSR payments to issuers leads to “silver loading” (2018 and 2019) Pricing for expected adverse selection due to repeal of mandate penalty, expansion of short-term plans (2019) Lack of competition in areas with single issuer Uncertainty

Individual market enrollment first quarter 2015-2018 Most Individual Market Participants Buy Through the Marketplace and are Eligible for Subsidies Individual market enrollment first quarter 2015-2018 18.8 M Source: Kaiser Family Foundation analysis of data from Mark Farrah Associates Health Coverage Portal TM and Centers for Medicare and Medicaid Services (CMS) Notes: Data on the share of off-exchange enrollment in compliant vs. noncompliant plans in 2018 are not available, so this assumes the share to be the same as in 2017. For 2015 through 2017, we assume the share of off-exchange enrollment in non-compliant plans in Q1 is the same as share of annual enrollment in non-compliant coverage. Enrollment is measured as average members per month.

Number of Uninsured and Uninsured Rate Among the Non-elderly Population, 2008-2017 NOTE: Includes nonelderly individuals ages 0 to 64. SOURCE: Kaiser Family Foundation analysis of 2008-2017 American Community Survey (ACS), 1-Year Estimates.

Eligibility for ACA Coverage Among Nonelderly Uninsured, 2017 Eligible for Financial Assistance 55% Total = 27.4 Million Nonelderly Uninsured NOTES: Numbers may not sum to totals due to rounding. Tax Credit Eligible share includes adults in MN and NY who are eligible for coverage through the Basic Health Plan. Medicaid/Other Public also includes CHIP and some state-funded programs for immigrants otherwise ineligible for Medicaid. SOURCE: Kaiser Family Foundation analysis of 2017 American Community Survey (ACS), 1-Year Estimates.

Texas v. US Lawsuit Challenges Constitutionality of ACA Republican state attorneys general are arguing that the ACA in its entirety is unconstitutional because the individual mandate (without a tax penalty) is unconstitutional. The Trump administration is not defending the ACA in court, instead arguing that only the ACA’s pre-existing condition protections should be invalidated. A district court judge has sided with the Republican state AGs, ruling that the ACA is unconstitutional, though the ruling has been stayed. Democratic state attorneys general have intervened in the case to defend the ACA and have appealed the decision to the 5th Circuit.

KFF Resources ACA/Marketplace Frequently Asked Questions https://www.kff.org/health-reform/faq/health-reform-frequently-asked- questions/ Marketplace Subsidy Calculator https://www.kff.org/interactive/subsidy- calculator/ ACA Analyses and Data https://www.kff.org/health-reform/ Private Insurance Analyses and Data https://www.kff.org/private- insurance/ Employer Health Benefits Survey https://www.kff.org/health- costs/report/2018-employer-health-benefits-survey/ Uninsured https://www.kff.org/uninsured/ State Health Facts https://www.kff.org/statedata

Contact Information Karen Pollitz Senior Fellow Email: karenp@kff.org Phone: 202-654-1307

Freshman Member Briefing on the Affordable Care Act Recent & Potential Legislative and Administrative Changes March 1, 2019 Sabrina Corlette, J.D.

Based at Georgetown University’s McCourt School of Public Policy About CHIR A team of nationally recognized experts on private health insurance and health reform Conduct research on issues related to health policy and health services Based at Georgetown University’s McCourt School of Public Policy

Individual mandate penalty repeal Texas lawsuit to strike down ACA The ACA in 2019 Individual mandate penalty repeal Texas lawsuit to strike down ACA Short-term health plans Association plans Marketplace cuts Navigators Outreach Elimination of CSRs 1332 Waivers Proposed: subsidy reductions, higher OOP costs, HRAs Law has taken a number of body blows, some pretty serious. Marketplace cuts: Navigators - $10M for 2019 (80% drop in funding over 2 years) Outreach - $10M – same as last year but 85% cut from 2016 Elimination of CSRs – ironically costing feds estimated $29B over 10 years in extra PTC funding. 1332 – relaxing the ACA’s guardrails, making it easier for states to design programs encouraging enrollment in skimpier health insurance products, such as short-term plans Premium indexing proposal (in NBPP) – change in methodology = higher premiums for subsidized MP enrollees (~$200/annually for family of 4). Increases MOOP by $200 for individual, $400 per family (applies to IM, GM, including self-funded)

Premiums relatively stable (-1.5%) Insurer participation stable ACA’s Present: 2018-2019 Premiums relatively stable (-1.5%) Insurer participation stable Majority public support ~87% receive premium subsidies BUT: 3.7% decline in enrollment 8.8% still uninsured Off-exchange enrollment declining (-38%, 2017-18) Surprising resiliency Polling data: half of the public holds a favorable view of the Affordable Care Act while four in ten hold an unfavorable view. (Sept. 2018); compare to 2014, when it was 53% unfavorable, 37% favorable Enrollment data – 8.3M in OE5 8.0M in OE6 87% get APTCs, up from 85% last year Where there are problems – unsubsidized enrollment declining – off-exchange dropped 38% last year.

ACA: What’s Going on in the States? Codifying pre-existing condition protections Rejecting – or embracing – Trump administration actions Individual mandate 1332s: Reinsurance Marketplace conversions ACA improvements Subsidy wraps Public option/Medicaid buy-in

ACA: Future Legislative Action? Reversing Trump administrative actions 1332, Short-term plans, AHPs Marketplace support Navigators Outreach Reinsurance? Cost-sharing reduction subsidies? Affordability improvements?

Sabrina Corlette, J.D. Questions? Research Professor (202) 687-0880 sc732@georgetown.edu @SabrinaCorlette