The Trump Effect On Insurance: Policy Changes And Their Timelines

During his 2016 campaign, Donald Trump promised \insurance for everybody\ and to \take care of everybody\ and lower costs. However, his administration's record on healthcare has been criticised for falling short of these promises. The number of uninsured Americans rose by 2.3 million from 2016 to 2019, and Trump's administration has been accused of chipping away at the consumer protections guaranteed by the Affordable Care Act (ACA). Trump has also supported a lawsuit to overturn the ACA, which would end coverage for more than 20 million Americans.

Trump's administration has pursued a series of measures intended to undermine the ACA by making the health insurance it provided less accessible and affordable, and by reducing coverage. These changes include cutting funding for advertising and enrollment assistance, reducing open enrollment periods, and ending cost-sharing subsidies for insurance companies. Trump has also refused to defend the ACA in court and expanded short-term insurance policies that do not have to cover pre-existing conditions.

In addition, the Trump administration has proposed spending reductions for Medicaid and Medicare and has issued executive orders aimed at lowering prescription drug prices. However, most of these proposals have not been implemented, and health care experts have criticised them as largely political posturing.

Trump's efforts to repeal and replace the Affordable Care Act (ACA)

On his first day in office, President Trump issued an executive order to repeal and replace the Affordable Care Act (ACA). However, he failed to deliver a specific plan of his own and had to rely on Republicans in the House to draft a substantive bill. This resulted in a delay in Trump's promised repeal of the law.

The bill, called the American Health Care Act (AHCA), included the elimination of the ACA's "individual mandate", a reduction in individual tax credits for insurance purchases, cuts in federal Medicaid funding, and nearly $1 trillion in tax cuts over a 10-year period. The bill faced objections from both moderate and conservative Republicans and was ultimately withdrawn without a vote.

Six weeks later, a revised version of the AHCA was narrowly passed by the House. This version included the removal of the penalty for individuals not having health insurance and a substantial scaling back of the outreach program to help Americans sign up for the ACA. As a result, the number of Americans covered under the ACA dropped from 17.4 million in 2015 to 13.8 million in 2018.

Despite these setbacks, the Trump administration continued to pursue a series of measures intended to undermine the ACA. These included cutting funding for advertising and enrollment assistance, limiting open enrollment periods, and repealing the ACA's "individual mandate".

The Trump administration also supported a lawsuit pending before the U.S. Supreme Court to overturn the ACA in its entirety. This lawsuit, known as Texas v. Azar, argued that since Congress had eliminated the financial penalty for failing to obtain health insurance, the mandate to purchase coverage was unconstitutional and invalidated the entire ACA.

In addition to his efforts to repeal and replace the ACA, Trump also proposed spending reductions for Medicaid and Medicare and issued executive orders aimed at lowering prescription drug prices.

The rise in the number of uninsured Americans

During his 2016 campaign, Donald Trump promised "insurance for everybody" and to “take care of everybody”. However, the number of uninsured Americans rose by 2.3 million from 2016 to 2019, including 726,000 children. This was the result of Trump's administration attacking the Affordable Care Act (ACA), signing the repeal of the ACA's individual mandate penalty, and making it more difficult for Americans to obtain comprehensive insurance coverage.

Trump's administration has also attacked Medicaid, with policies that have discouraged immigrants and their family members from seeking coverage and care. They have also supported work requirements for Medicaid, which have resulted in coverage losses.

Trump's administration has prioritised short-term, limited-duration insurance plans that do not have to comply with the ACA's rules that protect consumers. These plans often charge people higher premiums based on pre-existing conditions, set annual limits on benefits, and omit basic benefits such as mental health care and prescription drugs.

Trump's response to the COVID-19 pandemic has also contributed to the rise in the number of uninsured Americans. Millions of Americans lost their jobs and their health insurance during the pandemic.

Despite Trump's promises to protect Americans with pre-existing conditions, he supported a lawsuit to overturn the ACA, which would have wiped out health coverage for millions of Americans without proposing a replacement.

The overall number of Americans without health insurance dropped by 5.6 million from 2019 to 2022, coinciding with the beginning of the Biden-Harris Administration in January 2021. The national uninsured rate reached an all-time low of 8% in early 2022, with 5.2 million people gaining coverage since 2020.

Trump's proposed cuts to Medicaid and Medicare

During his 2016 campaign, Donald Trump pledged not to cut Medicaid, Social Security, and Medicare. However, his 2020 budget proposal broke this promise, cutting all three.

Trump's 2020 budget aimed to spend $1.5 trillion less on Medicaid over ten years, allocating $1.2 trillion in a block-grant program to states. The budget also proposed transforming the current pay-as-needed system to a block grant, where states are given a capped lump sum that doesn't grow with increased need or rising costs. This could leave millions more uninsured.

In terms of Medicare, Trump's budget proposed finding $845 billion in savings over ten years. However, $269 billion of that figure was reclassified under the Department of Health and Human Services, bringing the Medicare cuts to $575 billion. The administration aimed to achieve these cost reductions by targeting wasteful spending and provider payments, and lowering prescription drug costs.

Trump's budget also continued an attack on Social Security, including a program that gives assistance to those who have disabilities that prevent them from being in the workforce. In total, the cuts to Social Security amount to $25 billion over ten years.

While Trump's budget has no chance of passing, as it requires Congressional approval, it provides a blueprint for his policy priorities and what he would try to accomplish if given the opportunity.

The impact of the COVID-19 pandemic on health insurance

The COVID-19 pandemic has had a profound impact on the health insurance industry, highlighting the vulnerabilities of a system that ties health insurance to employment. As businesses closed and workers lost their jobs, millions of people lost their health insurance provided by their employers. This disruption to health coverage occurred during a public health crisis, putting families' health and financial security at risk.

Impact on Employment and Health Insurance

During the initial months of the pandemic in 2020, the US economy experienced a near-total shutdown, resulting in massive job losses. While there was a bounce back in job growth in the following months, the overall employment level remained low compared to pre-pandemic times. This economic shock caused significant churn in the labor market, with people losing and gaining jobs, leading to a net loss of health insurance coverage.

According to estimates, between February and July 2020, approximately 6.2 million workers lost access to employer-sponsored health insurance (ESI). The net loss of ESI coverage was even higher than during the Great Recession of 2008-2009. This highlights the vulnerability of a system where health insurance is closely tied to employment.

Impact on Health Insurance Claims and Costs

The pandemic also had a significant impact on health insurance claims and costs. The increase in COVID-19 hospitalizations and testing requirements put upward pressure on insurer costs. Insurers were required to cover the cost of COVID-19 tests and waive out-of-pocket expenses for policyholders hospitalized with COVID-19. However, the postponement and cancellation of elective procedures during the pandemic offset some of these increased costs.

The pandemic also affected the financial markets, leading to a decrease in interest rates. This had an impact on the risks that health insurers are subject to and their overall profitability. The decrease in interest rates resulted in a decline in investment income for insurers.

Impact on Enrollment and Coverage

The pandemic led to changes in health insurance enrollment and coverage. There was an increase in enrollment in Medicaid and Marketplace plans as people who lost job-based coverage sought alternative options. This helped to offset the significant effect of the pandemic on employment and the resulting reduction in employer-sponsored coverage.

The Affordable Care Act (ACA) also played a role in providing coverage options for those who lost their insurance. However, switching plans can result in losing access to preferred physicians and providers, creating instability in coverage and access to care.

Impact on Health Spending

The pandemic had a significant impact on national health spending in the US. Total national healthcare spending grew by 9.7% in 2020, reaching $4.1 trillion. This growth was driven primarily by increased federal spending on initiatives such as the Provider Relief Fund and the Paycheck Protection Program. The share of Gross Domestic Product (GDP) devoted to health increased sharply from 17.6% in 2019 to 19.7% in 2020.

The COVID-19 pandemic exposed the weaknesses of a health insurance system heavily reliant on employer-sponsored coverage. It highlighted the need for a more robust public insurance option and the importance of delinking health insurance from specific jobs. The pandemic's impact on health insurance costs, enrollment, and spending underscored the fragility of the current system and the need for reform to ensure access to affordable and stable health coverage for all.

Trump's executive order to lower prescription drug prices

On July 24, 2020, President Trump signed four executive orders aimed at reducing prescription drug prices. The orders were:

• To eliminate the rebates that drug manufacturers give to pharmacy benefit managers or health plans that negotiate discounts on the list prices of drugs. Instead, these discounts would be passed along to Medicare beneficiaries.
• To require Federally Qualified Health Centers to make insulin and epinephrine available at low prices to low-income individuals who don't have health insurance or have high cost-sharing for those drugs.
• To increase the importation of drugs by granting waivers to individuals to legally import drugs, allowing the reimportation of insulin, and finishing the rule-making process to allow the importation of some drugs from Canada.
• To ensure the United States pays the lowest price available among economically advanced countries for Medicare Part B drugs.

The executive orders were an attempt by the Trump administration to lower prescription drug prices and increase access to life-saving medications. However, experts and critics argue that the orders will have little to no immediate impact and are merely a distraction from the administration's inaction on the issue. Furthermore, the orders do not address the underlying issues of research and development costs and the pricing system in place.

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