The Disappointing Affordable Care Act

Later today, President Trump will deliver a major speech in Charlotte, NC, reviewing the health policy achievements of his administration and laying out his vision for a second-term agenda. Many of these achievements involve providing relief to Americans from the many failures of the Affordable Care Act. 
In a new Forbes piece, Galen Institute senior fellow and former special assistant to the president at the National Economic Council Brian Blase, discusses the ACA’s failures and how Trump administration reforms have helped. 
According to Blase:

"The Affordable Care Act (ACA), or Obamacare, was principally intended to improve health insurance markets for individuals and small businesses, lower health costs, and increase the number of people with insurance. It largely failed. Health insurance markets are only afloat because of massive federal subsidies, and premiums and out-of-pocket obligations significantly increased for families. 

"While the ACA has led to about 13 million more people with Medicaid, many more have been harmed. Middle-income families without employer-provided coverage and small businesses and their workers have largely fared worse from higher health care costs as did the nation’s taxpayers who are responsible for funding all of the law’s new spending."

Blase notes that despite spending $50 billion in taxpayer money on premium subsidies, individual market enrollment is up by just 2 million people from pre-ACA levels—a staggering $25,000 tab per newly insured. Exchange enrollment is 60 percent below expectations given how unattractive the products are to middle-income families. 
Blase echoes Brookings Institution scholar Stuart Butler in referring to the ACA as “The Medicaid Expansion Act.” Brian writes:

"Calling the law ‘The Medicaid Expansion Act’ seems more appropriate than ever since 100 percent of the net reduction in the uninsured has occurred because of Medicaid. A massive expansion of Medicaid—a welfare program that traditionally served low-income children, pregnant women, seniors, and individuals with disabilities—is not what the ACA’s proponents talked about when selling the law to the American people."

Fortunately, the policies of President Trump reversed some of this damage. Blase discusses actions to shore up the exchanges as well as expand more affordable options through Association Health Plans (AHPs) and short-term plans. 
A Council of Economic Advisers report found that these expanded options, along with eliminating the individual mandate tax penalty, generate $45 billion in net economic benefit each year for Americans. 
And the Trump administration’s health reimbursement arrangement (HRA) rule, which allows employers to offer tax-free payments that workers can use to purchase individual market coverage, is expected to add 8 million people to the market—four times as many as the ACA with no new federal spending. 
While the Trump administration made great strides to help Americans harmed by the ACA, Blase argues that “A better approach would be freeing people to purchase coverage that best meets their needs and budgets, allowing states to establish safety net programs to ensure people with pressing health care needs receive the care they need, and transitioning as much government assistance as possible directly to consumers rather than funneled to health insurers.”

Brian Blase’s Forbes piece:
The Galen Institute’s analysis of the Affordable Care Act at its ten-year anniversary:

Copyright © 2020 Galen Institute, All rights reserved.

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