Between the fiercely competitive midterm elections and ongoing upheaval over the Trump administration’s immigration policies, 2018 was no less politically tumultuous than 2017. The same was true for the world of health care. Republicans gave up on overt attempts to repeal and replace the Affordable Care Act (ACA) through legislation, but the administration’s executive actions on health policy accelerated. Several states took decisive action on Medicaid and some of the struggles over the ACA made their way to the courts. Drug prices remain astronomically high, but public outrage prompted some announcements to help control them. At the same time, corporate behemoths made deeper inroads into health care delivery, including some new overtures from Silicon Valley. Here’s a refresher on some of the most notable events of the year.
1. The ACA under renewed judicial assault
Texas v. Azar, a suit brought by Texas and 19 other Republican-led states, asked the courts to rule the entire ACA unconstitutional because Congress repealed the financial penalty associated with the individual mandate to obtain health insurance that was part of the original law. District Judge Reed O’Connor ruled in favor of the plaintiffs, creating confusion at the end of the ACA’s open enrollment period, and setting up what may be a years-long judicial contest (yet again) over the constitutionality of the ACA. To learn more about the legal issues at stake, see Timothy S. Jost’s recent To the Point post.
2. Turnout for open enrollment in health insurance marketplaces surged at the end of the sign-up period
The federal and state-based marketplaces launched their sixth enrollment season on November 1 for individuals seeking to buy health coverage in the ACA’s individual markets for 2019. Insurer participation remained strong and premiums fell on average. While some states have extended enrollment periods, HealthCare.gov, the federal marketplace, closed on December 15. After lagging in the early weeks, enrollment ended just 4 percent lower this year than in 2017.
3. The administration continues efforts to hobble ACA marketplaces
While the reasons behind lower enrollment cannot be decisively determined, executive action in 2018 may have contributed. The Trump administration dramatically cut back federal investments in marketplace advertising and consumer assistance for the second year in a row. The federal government spent $10 million on advertising for the 34 federally facilitated marketplaces this year (the same as last year but an 85 percent cut from 2016) and $10 million on the navigator program (down from $100 million in 2016), which provides direct assistance to hard-to-reach populations.
4. Insurers encouraged to sell health plans that don’t comply with the ACA
Another tactic the Trump administration is using to undercut the ACA is increasing the availability of health insurance products, such as short-term health plans, that don’t comply with ACA standards. Short-term plans, previously available for just three months, can now provide coverage for just under 12 months and be renewed for up to 36 months in many states. These plans may have gaps in coverage and lead to costs that consumers may not anticipate when they sign up. By siphoning off healthy purchasers, short-term plans and other noncompliant products segment the individual market and increase premiums for individuals who want to — or need to — purchase ACA-compliant insurance that won’t discriminate against people with preexisting conditions, for example.
5. Medicaid expansion in conservative states
Few states have expanded Medicaid since 2016, but in 2018, a new trend toward expansion through ballot initiatives emerged. Following Maine’s citizen-initiated referendum last year, Idaho, Nebraska, and Utah passed ballot initiatives in November to expand Medicaid. Other red states may follow in 2019. Medicaid expansion not only improves access to care for low-income Americans, but also makes fiscal sense for states, because the federal government subsidizes the costs of newly eligible Medicaid enrollees (94 percent of the state costs at present, dropping to 90 percent in 2020).
6. Red states impose work requirements for Medicaid
A number of states submitted federal waivers to make employment a requirement for Medicaid eligibility. Such waivers were approved in five states — Arkansas, Kentucky, Wisconsin, New Hampshire, and Indiana — and 10 other states are awaiting approval. At the end of 2018, lawsuits are pending in Arkansas and Kentucky challenging the lawfulness of work requirements for Medicaid eligibility. About 17,000 people have lost Medicaid in Arkansas as a result of work requirements.
7. Regulatory announcements respond to public outrage over drug prices
Public outrage over prescription drug prices — which are higher in the U.S. than in other industrialized countries — provided fodder for significant regulatory action in 2018 to help bring costs under control. Of note, the Food and Drug Administration announced a series of steps to encourage competition from generic manufacturers as well as greater price transparency. The U.S. Department of Health and Human Services in October announced a proposed rule to test a new payment model to substantially lower the cost of prescription drugs and biologics covered under Part B of the Medicare program.
8. Corporations and Silicon Valley make deeper inroads into health care
Far from Washington, D.C., corporations and technology companies made their own attempts to alter the way health care is delivered in the U.S. Amazon, Berkshire Hathaway, and J.P. Morgan Chase kicked 2018 off with an announcement that they would form an independent nonprofit health care company that would seek to revolutionize health care for their U.S. employees. Not to be outdone, Apple teamed up with over 100 health care systems and practices to disrupt the way patients access their electronic health records. And CVS Health and Aetna closed their $69 billion merger in November, after spending the better part of the year seeking approval from state insurance regulators. In a surprise move, a federal district judge then announced that he was reviewing the merger to explore the potential competitive harm in the deal.
9. Growth in health spending slows
The annual report on National Health Expenditures from the Centers for Medicare and Medicaid Services estimates that in 2017, health care spending in the U.S. grew 3.9 percent to $3.5 trillion, or $10,739 per person. After higher growth rates in 2016 (4.8%) and 2015 (5.8%) following expanded insurance coverage and increased spending on prescription drugs, health spending growth has returned to the same level as between 2008 to 2013, the average predating ACA coverage expansions.
10. Drug overdose rates hit a record high
Continuing a tragic trend, drug overdose deaths are still on the rise. The Centers for Disease Control and Prevention reported 70,237 fatalities in 2017. Overdose deaths are higher than deaths from H.I.V., car crashes, or gun violence, and seem to reflect a growing number of deaths from synthetic drugs, most notably fentanyl. 2018 was the first year after President Trump declared the opioid crisis a public health emergency. National policy solutions have so far failed to stem the epidemic, though particular states have made progress.
As we slip into 2019, expect health care issues to remain front and center on the policy agenda, with the administration continuing its regulatory assault on many key ACA provisions, Democrats harassing the executive branch with House oversight hearings, both parties demanding relief from escalating pharmaceutical prices, and the launch of health care as a 2020 presidential campaign issue.