STATEMENT: CAP’s Topher Spiro Says Executive Order Creates “Junk Plans”

Washington, D.C. — Topher Spiro, vice president for Health Policy and a senior fellow for Economic Policy at American Progress, issued the following statement after President Donald Trump signed an executive order that would roll back protections for individuals with pre-existing conditions, destabilize the insurance market for small businesses, and encourage the proliferation of junk plans that offer scant coverage:

Today’s executive order is sabotage, plain and simple. Trump is trying to take us back to the bad old days before the Affordable Care Act (ACA), when coverage wasn’t there when you needed it and when people who were older or had pre-existing conditions faced sky-high costs.

These changes would be devastating for small businesses, sending their premiums soaring and undermining the small-group insurance market. And while many consumers in the ACA marketplaces would be protected from the higher individual market premiums resulting from this order, confusion will depress enrollment, some insurers may exit markets, and middle-income Americans with pre-existing conditions would face premium spikes.

Let’s be clear: Trump plans are junk plans that will leave people without care when they need it most.

Below is a comprehensive timeline of Trump policies that are undermining the ACA marketplace.

Click here to see the Center for American Progress Action Fund’s tracking of the Trump Administration’s sabotage to the law.

  • On January 20, President Trump issued an executive order that directs agencies to take all legal steps to undermine the ACA, including by weakening enforcement of the individual mandate.
    • As a result of the order, on February 14, the IRS canceled a new policy that would improve enforcement of the individual mandate.
  • On January 26, the Trump administration canceled millions of dollars’ worth of outreach efforts to inform people of the availability of ACA health plans during a crucial moment of the enrollment period for 2017 coverage. The former chief marketing officer for HealthCare.gov estimated that this reduced enrollment by almost 500,000 people.
  • On February 23, the Trump administration extended by another year an exemption from ACA requirements for certain health insurance plans. This policy change will keep healthier, less expensive enrollees out of the ACA marketplace, increasing prices for everyone else.
  • On April 18, the U.S. Department of Health and Human Services (HHS) issued a so-called Market Stabilization rule. HHS acknowledged that “there is some uncertainty regarding the net effect on enrollment, premiums, and total premium tax credit payments” and that the effect of the rule on enrollment and premiums could be negative; HHS is certain, however, that the rule will transfer money from consumers to insurance companies. The rule will have many negative consequences, including:
    • Lowering premium tax credits for enrollees, resulting in an increase in the amount they will pay for care
    • Cutting the enrollment period in half, which will likely decrease enrollment
    • Expanding the number of people subject to burdensome paperwork when they seek coverage after a qualifying event such as losing a job or having a child, which will decrease the number of healthy people who sign up for health coverage and raise costs for everyone
  • On May 4, the House majority passed the American Health Care Act, which would result in 23 million people losing coverage and destabilize the individual health insurance market in states that contain one-sixth of the U.S. population.
  • On May 5, House leaders refused to clarify in the annual spending bill that they will fully fund CSR payments, allowing President Trump to continue to threaten to cancel the payments and thereby exacerbating uncertainty for insurers.
  • On May 22, the Trump administration asked the D.C. Court of Appeals for a three-month extension in House v. Price, a lawsuit brought by House Republicans during the previous administration to try to end CSR payments, which will extend uncertainty for insurers beyond the August rate filing date, guaranteeing massive premium increases in the absence of congressional action.
  • On May 23, President Trump proposed in his budget to reduce funding for HealthCare.gov by 21 percent, which would decrease enrollment and make insurance more expensive.
  • On July 13, HHS announced that it would stop providing premium tax credits to individuals for paperwork errors without addressing concerns about providing them proper notice; this would cause people’s costs to increase and therefore decrease marketplace enrollment.
  • On July 20, it was reported that HHS had been using funding that was provided to encourage enrollment in the ACA marketplace to instead wage a public relations campaign to undermine the law.
  • On July 20, it was reported that HHS had cancelled contracts to provide in-person enrollment assistance in 18 cities, including enrollment fairs and sign-ups in public libraries.
  • On August 10, it was reported that HHS is not coordinating enrollment efforts with the Latino Affordable Care Act Coalition, a group of local and national organizations that have worked with the administration in every previous enrollment period, helping to ensure Latinos have the necessary information to sign up for health insurance.
  • On August 14, it was reported that HHS is not coordinating enrollment efforts with a range of partner groups that have assisted in such efforts in previous years, including youth organizations, medical organizations, churches, private companies, and women’s groups.
  • On August 24, it was reported that some states had not yet been contacted by administration officials regarding open enrollment, a sharp break from past practice.
  • On August 31, HHS announced that it would be cutting funding for advertising to encourage enrollment in the ACA marketplace by 90 percent or $90 million. It also announced that it would be cutting funding for people who help individuals enroll in coverage by more than $25 million.
  • On September 22, Minnesota was informed by HHS that its state innovation waiver to create a reinsurance program to reduce premiums was approved, but that funding for its basic health program, which provides health care to low-income Minnesotans, would be cut by hundreds of millions of dollars as a result. This was contrary to previous statements from HHS that the waiver would not result in a funding cut to the basic health program.
  • On September 22, HHS announced that it will shut down HealthCare.gov, the primary means for people to sign up for health insurance, for 12 hours every Sunday but one during the open enrollment period. This is the equivalent of shutting the site down for 2.5 days and a significant increase in downtime from previous years. HHS will also shut down the website overnight on the first day of open enrollment.
  • On September 26, HHS delayed the deadline for issuers to inform consumers about plan renewals and 2018 rates, which is necessary to help them make informed enrollment decisions for the upcoming year.
  • On September 27, it was reported that HHS regional representatives would no longer be attending pre-enrollment events to help outside groups prepare for open enrollment and understand changes from the previous year’s enrollment period.
  • On September 29, Oklahoma was forced to withdraw a state innovation waiver to create a reinsurance program that would have reduced premiums by more than 30 percent. HHS did not approve the waiver in time for it to be enacted, despite having approved a similar waiver for Alaska earlier in the year.

For more information on this topic or to speak with an expert, please contact Devon Kearns at 202.741.6290 or dkearns@americanprogress.org.