During his 2016 campaign, President Donald Trump repeatedly said he was for “insurance for everybody” and promised to “take care of everybody” and to lower costs. Almost four years later, the Trump administration’s record falls far short of these promises: The number of uninsured Americans has swelled, his administration has chipped away at the consumer protections guaranteed by the Affordable Care Act (ACA), costs have risen for Americans with marketplace plans, and the nation is mired in a public health crisis.
The wake of one of the administration’s most destructive health care policies may trail far beyond this term of his presidency. The health care repeal lawsuit that he helped advance to the U.S. Supreme Court could invalidate the entire ACA next spring, ending coverage for more than 20 million Americans, driving up costs for those seeking to buy coverage on their own, and eliminating consumer protections for millions of people with preexisting conditions—all in the midst of the COVID-19 pandemic.
Millions of Americans lost coverage before and during the pandemic
Since President Trump took office, millions of Americans have lost health insurance coverage. The number of uninsured Americans rose by 2.3 million from 2016 to 2019, including 726,000 children, according to the U.S. Census Bureau. Among the 41 states with increases in their numbers of uninsured residents, the largest increases were in Texas (689,000) and Florida (240,000). Many smaller states, such as Michigan (44,000) and Wisconsin (29,000), saw increases in the tens of thousands. Just a handful of states experienced a net gain in coverage, including New York, where the number of uninsured people declined by 176,000. (see Table 1)
The increase in the number of uninsured people over the past few years (see Figure 1) is the product of Trump administration policies aimed at attacking the ACA, including signing the repeal of the ACA’s individual mandate penalty and making it more difficult for Americans to obtain comprehensive insurance coverage. According to the Congressional Budget Office, “Increases in health insurance premiums and the elimination of the individual mandate penalty have contributed to” the rise in the uninsurance rate.
Another factor driving up uninsurance is the Trump administration’s attacks on Medicaid. The administration’s public charge rule has created “chilling effects” that discourage immigrants and their family members from seeking coverage and care for which they are eligible. In addition, at the Trump administration’s urging, some states implemented work requirements for Medicaid. A study on Arkansas’ program demonstrated that these requirements, which a federal appeals court struck down earlier this year as illegal, resulted in coverage losses without actually increasing employment.
Rather than extending coverage to the uninsured as promised, the Trump administration has prioritized skimpy coverage sold through association health plans and short-term, limited-duration insurance. These latter types of plans are not required to comply with the ACA’s rules that protect consumers, and they commonly charge people higher premiums based on preexisting conditions, set annual limits on benefits, omit basic benefits such as mental health care and prescription drugs, and rescind coverage after treatment. Enrollees in non-ACA-compliant plans may not realize the limited extent of their coverage until it’s too late. An investigation by the Government Accountability Office found that health insurance sales representatives used “potentially deceptive practices, such as claiming the pre-existing condition was covered when plan documents said otherwise.”
At the same time, the Trump administration has erected barriers to obtaining comprehensive plans through the marketplaces by cutting funding for initiatives to inform uninsured people about coverage options, scaling back enrollment assistance programs, and shortening the annual HealthCare.gov open enrollment period. Total enrollment across all states’ marketplaces has fallen over the past few years, from 12.7 million people in 2016 to 11.4 million people in 2020. States that operate their own marketplaces, known as state-based marketplaces, have had more leeway to continue promoting enrollment and support their consumers, and their collective enrollment has increased over the same period. In a previous analysis, the Center for American Progress estimated that at least 1.26 million more people would be covered through marketplace plans in states that rely on the federal HealthCare.gov platform if not for the Trump administration’s sabotage of marketplace enrollment.
The pandemic is driving the number of uninsured people even further up, as Americans continue to lose jobs and job-based health insurance. In recognition of the importance of coverage, about a dozen states declared a special enrollment period (SEP) in response to COVID-19 to make it easier for uninsured people to enroll in marketplace plans. Sign-ups have surged above normal levels in these states, and Covered California reports that enrollment hit an all-time high in June. The states that use the federal government’s HealthCare.gov platform have been unable to offer the same opportunities to their residents, however, because of the Trump administration’s refusal to relax the rules during these extraordinary times.
While some people who lost job-based insurance have been able to regain coverage, whether through the marketplaces, Medicaid, or from a family member’s employer, census data show that 1.9 million adults became uninsured from May to July. A separate survey, by The Commonwealth Fund, found similar results: Of those who lost job-based coverage, 1 in 5 reported that they or their spouse or partner did not have any insurance coverage. The loss of work and coverage, coupled with financial strain from the pandemic, leads to people avoiding care due to cost or concerns about COVID-19.
As grim as the health insurance coverage losses are so far, the Trump administration continues to actively push forward a health care lawsuit. Just after Election Day, the Supreme Court will hear the case that will decide the future of the Affordable Care Act. The court’s decision could take down the entire law, including Medicaid expansion, marketplace subsidies, and protections for the 135 million Americans with preexisting conditions. Full repeal of the ACA would have resulted in about 20 million more Americans becoming uninsured before the pandemic, according to estimates by the Urban Institute.
During the pandemic, the consequences of ACA repeal will be even graver: More than 20 million people overall could now lose coverage, as people shift from employment-based plans to coverage options made possible by the ACA, such as expanded Medicaid and nongroup coverage, after being laid off by an employer or losing income this year.
Contrary to his promises, Trump has increased health care costs
Marketplace enrollees and taxpayers are paying the cost of the Trump administration’s ACA sabotage. Policies that draw healthier people away from comprehensive coverage leave those remaining in the risk pool with higher premiums. The Congressional Budget Office estimated in 2018 that Congress’ repeal of the ACA’s individual mandate would not only result in 1 million fewer people insured that year but would also drive individual premiums higher than they would have otherwise been starting in 2019.
In its analysis of rate filings for 2019, the Kaiser Family Foundation estimated that plans added an average of 6 percent to premiums to account for the mandate repeal and the Trump administration’s promotion of junk plans. The repeal of the mandate has lasting effects. That extra 6 percent on 2020 premiums means that the average HealthCare.gov marketplace premium—$7,140 annually—is $404 higher than it would be without ACA sabotage.
The Trump administration has meddled with marketplace premiums in less transparent ways as well. Since 2019, insurance plans have been able to raise their premiums up to 15 percent each year without explanation because the Trump administration lifted the ACA’s threshold for federal rate review from its previous 10 percent.
Due to changes in the ACA subsidy formula that the Trump administration enacted through administrative law in 2019, marketplace enrollees who receive financial assistance will owe 2.8 percent more toward their premiums in 2021. As a result, a family of four making $80,000 will pay $216 more annually for marketplace coverage, and a single person making $40,000 will pay $108 more for marketplace coverage, according to CAP analysis of the 2018 National Health Expenditures data used to calculate the 2021 subsidy levels.
The tweaks to the index for the ACA’s annual updates will also increase some patients’ out-of-pocket costs. The out-of-pocket maximum rose faster over the past couple years than it would have absent the Trump administration’s changes. A single person will owe up to $200 more out of pocket—$8,550 instead of $8,350—and a family will need to spend $400 more to reach its out-of-pocket maximum in 2021. This change exposes the sickest, most vulnerable enrollees to higher out-of-pocket costs.
Insurance company profits have soared while families pay more
Across all lines of business, insurance companies’ profit margin has increased in recent years, shooting up from about 1 percent in 2016 to 3 percent in 2019. (see Figure 2) Insurance company profits have been boosted by a number of factors, including the expansion of companies’ business in Medicare Advantage and Medicaid and the benefits of relatively unchecked vertical consolidation with other firms in the health care industry. In years to come, insurance companies stand to benefit if Trump follows through on his executive order to shift more Medicare beneficiaries into private plans, to the detriment of beneficiaries’ access to providers.
While the pandemic has depressed economic activity this year in most industries, insurance companies’ profitability to date has topped last year’s. Medical spending is down dramatically in 2020 due to deferred care during the pandemic, boosting companies’ net income above expectations. Thanks to the ACA’s medical loss ratio requirement, insurers will be required to return excess premiums to consumers if medical spending for the year is below what they anticipated. Meanwhile, the federal Centers for Medicare & Medicaid Services and state regulators have encouraged or required insurers to waive or discount premiums and cost sharing in order to assist consumers and meet medical loss requirements.
After years of chipping away at the ACA and undermining comprehensive coverage, the Trump administration has driven health insurance coverage rates lower and has not met its promises to bring down health care costs. The administration’s mishandling of the COVID-19 pandemic has heightened both these problems and cost thousands of Americans their lives. The outlook for American health care remains grim. As long as the entire ACA remains in danger, another major health care crisis looms ahead.
Emily Gee is the health economist of Health Policy at the Center for American Progress.
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