“Repeal & Replace” is out as GOP, Red States build on Obamacare

Out of the three GOP debates that have now taken place, the Affordable Care Act has been mentioned a mere 1 time. The reason?

The groundbreaking piece of healthcare reform is finally being seen as the law of the land on both sides of the aisle. The law, which created a federal healthcare marketplace, also gave states the ability to create their own marketplaces and set new standards for consumer protections, was contested for years after it's passing. Repealing it became a campaign platform for many Republican candidates.?

The GOP may have finally accepted Obamacare

The Trump Administration ushered in a new rule creating Individual Coverage Health Reimbursement Accounts (ICHRAs) to enable employers to offer tax-advantaged stipends to their workers to buy their own coverage — and stapled the entire rule to the Affordable Care Act marketplaces.

And now, many red and purple states are looking to build and innovate on top of those marketplaces too.

Texas and Alabama, who were at the forefront of the “repeal and replace” campaign, are now looking to create their own state-based health insurance exchanges—embracing the Affordable Care Act and putting their hands up to run communications campaigns, enrollment and support for their own citizens.

However, as more states move away from Healthcare.gov and look to build their own healthcare marketplaces, it’s important that checks and balances remain in place and that consumer protections, affordability and accessibility - key pillars of the ACA - remain top priorities.?

A little “Obamacare” history

The Patient Protection and Affordable Care Act was passed by Congress and signed into law in 2010. It represented the most significant regulatory overhaul and expansion of healthcare coverage since the enactment of Medicare and Medicaid in 1965.?

As one part of the ACA, individual health insurance markets were overhauled and insurers were made to accept all applicants, without charging based on preexisting conditions or demographic status. However, even after the bill became law, it was heavily contested by Republicans. Donald Trump campaigned on “repealing and replacing” the ACA, but even after winning control of the presidency, Senate, and House, in 2016, the law remained intact. More recently, Republican Senator Susan Collins was quoted saying: “The Affordable Care Act is now embedded in our healthcare system.”?

Since going into effect in 2010, 18 states have created their own State Based Marketplaces, otherwise known as SBM’s. And more are on their way. This year, Virginia will have its first Open Enrollment on its fully state-run exchange. Georgia will begin running its own enrollment platform in 2024, while Illinois plans to have its own by the 2026 plan year.?

And what’s even more surprising, deep red states like Texas and Alabama—states that were supportive of removing “Obamacare” from our healthcare system altogether—have now put forth legislation that would create their own health insurance marketplaces.?

So why are red states embracing the ACA and creating their own exchanges?

The first reason is pretty obvious: money. The federal government currently charges states a user fee for using Healthcare.gov (2.2% for FFEs and 1.8% for SBEs). And while building their own marketplace will require some upfront investment, it will ultimately save states millions of dollars in fees. For example, New Mexico announced it will likely save over $8 million by 2025 by transitioning to a full state-based marketplace. And Nevada, which launched its state marketplace in 2019, anticipates the exchange will save more than $18 million over five-years.?

The second is control and customization. States are able to better customize their own platform to fit their markets’ particular needs. States on HealthCare.gov have no control over the experience as the federal marketplace is not currently able to accommodate state-by- state customization. When in the hands of the states, they can integrate enrollment in other state programs or extend the enrollment period.?

But there are undercurrents of new threats to the consumer protections of the ACA

We already know that the dismissal of “repeal and replace” does not necessarily indicate agreement with core ACA policies. One example is the Custom Health Option and Individual Care Expense (CHOICE) Arrangement Act of 2023 that just passed through the US House. Though unlikely to pass through the Democrat-controlled Senate, the Act is intended to reduce health insurance premiums for certain businesses and consumers. Sounds good and fair, right? Not exactly.

The proposed reforms would roll back consumer protections such as pre-existing condition requirements and essential health benefits standards, which guarantee certain care in all ACA health plans. While plans might be cheaper for healthier Americans, out-of-pocket costs for consumers with chronic conditions and other vulnerable populations could be significantly higher. The legislation also pushes for short-term health plans, which are not regulated the same way that ACA policies are and are risky given their lack of coverage for preventive and other care including maternity, mental health and any sort of pre-existing condition.??

While it’s major progress to see that red states and the Republican party may have accepted the Affordable Care Act as the law of the land, it’s still important that as any state creates their own state-based exchanges, consumer protections are not lost and accessibility and ease of use remain top priorities.?

A path forward that ensures we cover more Americans

A key component to making sure state-based marketplaces can run effectively are their accessibility and ease of use. No surprise, but government run sites are not known for their easy navigation and intuitive user experiences. The good news is that more Private sector companies—like my company Stride Health—are partnering with the government to extend their reach and deliver alternative user experiences.

Enhanced Direct Enrollment (known as “EDE”) is a federally adopted technology approach that allows private companies to assist with exchange enrollment. Through EDE, private companies are able to extend the marketplace’s reach by integrating enrollment & tax credits into experience for the customer bases they already market serve. This provides a smoother, non-governmental enrollment experience that extends the reach of the exchanges and creates a more dynamic set of experiences that can be tuned to the needs of specific populations of Americans who need their own insurance.?

It’s important that the states remain open minded about how the public and private sector can work together, hopefully using EDE to deliver more extensive consumer reach and experiences to these states who are embracing their own exchanges.

The fact that the ACA has faded from partisanship debates and is being “embraced” on both sides of the aisle is a big step in the right direction for our country. Now, we need to ensure that as states build their own marketplaces and take more control over their citizens’ healthcare, they continue to work in favor of and protect all of the people it was built to serve.