GOP health law repeal thwarted, but ‘Trumpcare’ already under way

Janella Williams watches television for news on the healthcare vote while receiving treatment at Lawrence Memorial Hospital in Lawrence, Kan., Friday, March 24, 2017. The 45-year-old graphic designer receives medication from an intravenous drip for a neurological disorder, getting the drugs that she says allow her to walk. Under her Affordable Care Act plan, she pays $480 a month for coverage and has an out-of-pocket maximum of $3,500 a year. If she were to lose it, she wouldnít be able to afford the $13,000-a-year out-of-pocket maximum under her husbandís insurance. Her treatments cost about $90,000 every seven weeks. less Janella Williams watches television for news on the healthcare vote while receiving treatment at Lawrence Memorial Hospital in Lawrence, Kan., Friday, March 24, 2017. The 45-year-old graphic designer receives ... more Photo: Orlin Wagner, Associated Press Photo: Orlin Wagner, Associated Press Image 1 of / 9 Caption Close GOP health law repeal thwarted, but ‘Trumpcare’ already under way 1 / 9 Back to Gallery

House Republicans’ failure to advance legislation to replace the Affordable Care Act means that President Barack Obama’s health care law — which has led to millions more Americans receiving health insurance — lives another day.

But the status quo could be short-lived, as the Trump administration has signaled that it is willing to loosen regulations enacted by the Affordable Care Act.

Health experts say too much change could undermine the delicate balancing act of the law, which sought to broaden coverage to people who would not otherwise buy insurance.

President Trump signed an executive order his first day in office pledging to ease the “regulatory burden” of enforcing the law, which it also believes has failed to contain health care costs. And some changes are already under way.

Most notably, the Internal Revenue Service has relaxed its enforcement of the requirement to buy insurance, known as the individual mandate. Republicans largely oppose the requirement as onerous, but Democrats view it as a vital to the law’s effectiveness, because it means people who are healthy — not just those who are sick — must buy insurance. That spreads the risk of incurring high health costs across more people.

Another change came in late January, during the final days of open enrollment, when the U.S. Department of Health and Human Services pulled $5 million in advertising that was meant to remind consumers to sign up for plans on the insurance exchanges, or marketplaces, before open enrollment ended. The administration said it did not want to put additional money toward a health care policy that was already failing. It may have led to fewer people signing up for the exchanges that the Affordable Care Act had established.

“We’re already living with Trumpcare because the administration has and is making substantial changes to the enforcement of the law,” said Micah Weinberg, president of the Bay Area Council Economic Institute, a think tank. “That will have far-reaching ramifications in spite of health care reform being put on hold indefinitely” in Congress.

Immediately after House Speaker Paul Ryan’s announcement to withdraw the legislation, Trump reiterated his long-held assertion that the Affordable Care Act is unraveling and will eventually “explode.” Democrats, who opposed the House legislation, will own the resulting problem, he said.

The failure to pass legislation to replace the Affordable Care Act may not quell the uncertainty felt by insurance companies, many of which are debating whether to continue selling plans on the exchanges after 2017.

“Although the AHCA is off the table for now, we are currently unable to make an informed decision about whether to participate in 2018 in the individual marketplace without additional clarity on a couple of key issues,” said Dr. Mario Molina, CEO of Molina Health.

Larry Levitt, a senior vice president at the Kaiser Family Foundation said: “Insurers still face a lot of uncertainty, it’s just a different uncertainty now.”

Covered California, the insurance exchange where millions of Californians buy health coverage, is relatively stable: Eleven insurers, more than in most states, offer coverage. Five states have only one insurer on the exchange, leaving consumers with limited options for plans and pricing. But California too has been affected by uncertainty and a rocky rollout of the Affordable Care Act. Last year, United Healthcare, one of the nation’s biggest insurers, withdrew from exchanges nationally, including California, citing high health costs.

Of particular concern to insurers is the fate of what’s called “cost-sharing subsidies,” which are now in the hands of the Trump administration.

These subsidies were created under the ACA to help poorer Americans pay for high deductibles and some prescription costs. They are separate from the subsidies the federal government provides consumers to help pay for insurance premiums. Currently, about $7 billion in cost-sharing subsidies go to 7 million people, including 800,000 in California.

The House has sought for years to end these subsidies. In 2014, the body sued the Obama administration, arguing that the Department of Health and Human Services did not have the authority to implement them. A federal judge ruled in the House’s favor, but the Obama administration appealed the decision. After Trump took office in January, his administration asked the appeals court to hold off on the case while the legislative effort to repeal the Affordable Care Act was under way. The failed House legislation had attempted to eliminate the subsidies. Now the department could simply drop the legal appeal, which would end the subsidies — just one of the ways the Trump administration could impact the law.

“The ACA is here to stay,” Levitt said. “The Trump administration really does face a choice ahead about whether to make the law work or undermine it.”

Catherine Ho is a San Francisco Chronicle staff writer. Email: cho@sfchronicle.com Twitter: @Cat_Ho