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A decade later, the ACA awaits Biden’s return

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WILMINGTON – At the dawn of his presidency, one of the most important victories of Joe Biden’s time as vice president, the Affordable Care Act of 2010, has endured a decade of challenges, funding cuts, and a rollercoaster market.

Today, more than 25,000 Delawareans have purchased health insurance due to the legislation perhaps better known via Biden’s former presidential partner as Obamacare. While the COVID-19 pandemic, an economic recovery and the tumultuous end to the Trump administration will likely embroil much of the early days of Biden’s four-year term as president, he has also committed to preserving and strengthening the law that covers about 11.4 million Americans today.

The ACA was a hallmark achievement for President Barack Obama, who saw Biden lobby former Democratic Senate colleagues to ensure it cleared the 60-vote threshold. Upon its signing in a March 2010 East Room ceremony, Biden famously told Obama it was a “big [expletive] deal.”

The bill expanded Medicaid eligibility, opened new marketplaces for individual plans and disallowed insurers from considering pre-existing conditions when reviewing new applicants. Between the expansion of Medicaid and the offering of individual plans through the HealthCare.Gov marketplace, more than 20 million Americans have found health insurance coverage – roughly half of the nation’s uninsured population prior to the law’s passage.

In the years since, however, the law was put into the crosshairs of Republican lawmakers who saw it as government overreach, and it survived a U.S. Supreme Court challenge only to have Congress strike down one of its most controversial features, the individual mandate. With many insurers backing out of individual marketplaces and the Trump administration cutting spending on marketing and enrollment assistance, nationwide sign-ups have fallen annually from a high of 12.6 million in 2016 to about 11.4 million in 2020.

ACA impact on Delawareans

In the First State, ACA individual marketplace enrollment has exceeded 20,000 for the majority of the program’s history. More than 25,000 signed up for the 2021 benefit year, the second consecutive year of enrollment gains, and an estimated 10,000 residents are eligible for Medicaid due to the ACA’s expanded eligibility provisions.

Together, those programs have helped keep the percentage of uninsured Delawareans around 6%, down from around 10% before the ACA’s passage.

Insurance Commissioner Trinidad Navarro

“This is in spite of the best efforts of the Trump administration to kill the ACA through what I call 1,000 paper cuts,” Delaware Insurance Commissioner Trinidad Navarro told the Delaware Business Times. “I think it’s quite remarkable that the numbers have stayed pretty stable and have actually increased [in Delaware] the last two years, given the efforts to disparage and destroy the ACA since 2016.”

Navarro said that his department has undertaken marketing efforts that used to be funded by the federal government to ensure the public is aware of the resources. The importance of having health insurance cannot be overstated for individuals, who carry the inherent financial risk, or the community at-large, he said.

“It prevents, in many cases, people who go into the hospital emergency room for treatment for something as simple as a sinus infection. If you spend money and time in primary care, it will save money in the future with long-term types of illnesses and disease,” Navarro said.

Reinsurance proves successful

Today, only Highmark Blue Cross Blue Shield participates in Delaware’s ACA marketplace, offering 12 plans with differing premium and deductible levels, after Aetna backed out in 2018. Navarro blames that loss on Congress’s refusal to extend so-called risk corridor payments, or a shuffling of funds from more profitable plans to less profitable ones, to meet the intent of servicing all, regardless of how sick a patient was and the cost to treat them.

Using its purse-string powers, Congress essentially shorted the program, only allowing it to pay out annual overages rather than spending more, leaving a bill of more than $2 billion that was only settled by the Supreme Court this past year. Aetna was reported to have lost about $900 million on ACA policies between 2014 and 2017.

“One of the biggest drivers in Delaware is the actual cost of care because we have a very small pool in Delaware and an aging population. I’ve seen a number of national studies that indicate that the reason why insurance costs for health insurance are so high is because of the cost of care in the state of Delaware,” Navarro said of Delaware’s 12th highest average benchmark ACA premium of about $540, before subsidies.

The First State has found success in the past two years with a reinsurance plan, though. The program draws from a $27 million fund of federal subsidy savings and insurer assessments to help insurers cover the cost of the sickest patients. Those savings in turn lead to lower premium costs for all policyholders.

After starting the reinsurance program, premiums for 2020 Delaware ACA plans dropped 19% and another 1% in 2021. Last year, Highmark actually made enough profit on its Delaware ACA plans that it exceeded its allowable 20% margin, and was forced to reimburse state policyholders $21.5 million in September – a first under the ACA in Delaware.

“We are back in talks with other insurers to come back to the state of Delaware so there will be more options,” Navarro added.

The commissioner said that other states have reached out in the months since to learn how Delaware navigated the complex federal waiver system necessary to implement reinsurance. Navarro also recently signed a letter with 10 other insurance commissioners from around the country suggesting that the Biden administration consider funding a national reinsurance program.

Jessica S. Banthin, a senior fellow at the Health Policy Center at the Washington think tank Urban Institute, agreed that a national reinsurance program would be effective.

“It adds a little certainty; it makes it less risky for insurers. Even though they’re supposed to insure against risk, they don’t really like risk,” she said.

What’s next for ACA

The Biden campaign floated several proposals to strengthen the ACA, including offering a Medicare-like public option to anyone who wanted it, removing the income cap on tax credit eligibility to help subsidize more users and offering premium-free access to the public option to more than 4 million people in 14 states that have refused to expand their Medicaid programs under the ACA.

Banthin, who spent 25 years working in the federal government, including on health policy for the Congressional Budget Office, said the public option in particular would allow the federal government to use its negotiating power to push down costs compared to the commercial market.

“We get a lot for our health care dollars, but it’s just really expensive. So, there’s still a number of people who can’t really afford to buy on the exchange or find it very onerous to do so,” she said.

Looking back, Navarro said that he considers the ACA “a significant success,” and notes that its impact has been exemplified by the COVID-19 pandemic. Before the federal law, infection of the coronavirus would have been considered a pre-existing condition for the roughly 67,000 Delawareans who contracted it during the crisis.

A decade on, Banthin agreed.

“When you look at the ACA’s widespread impact, it’s achieved a lot,” she said.

By Jacob Owens

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