TrumpBeat: The Trump Administration’s Own Data Says Obamacare Isn’t Imploding

A [FiveThirtyEight]( email [TrumpBeat]( Friday, Jul. 7, 2017 Welcome to [TrumpBeat](, FiveThirtyEight’s weekly feature on the latest policy developments in Washington and beyond. Want to get TrumpBeat in your inbox each week? Sign up for our [newsletter](. Comments, criticism or suggestions for future columns? President Trump and other Republicans have [said repeatedly]( that one reason they have to repeal and replace the Affordable Care Act is that the [law is failing](: Healthy people are [abandoning the insurance marketplaces]( set up by the law, driving up costs and leading yet more people to drop insurance — a so-called “[death spiral](.” Many health insurance experts, however, have argued that those [fears are overblown](, and they recently got support from an unlikely source: the Trump administration itself. The Centers for Medicare and Medicaid Services, which is part of the Department of Health and Human Services, last week released [a report]( about a wonky aspect of the Affordable Care Act related to insurance payments. Tucked away in the report, however, was evidence that the health insurance marketplaces set up by Obamacare were relatively stable in 2016. Contrary to the “death-spiral” narrative, the CMS report [found]( that the mix of healthy and sick people buying insurance on the Obamacare marketplaces in 2016 was surprisingly similar to those who enrolled in 2015. Explaining what CMS found requires a dip in the sea of the actuarial terminology, so take a deep breath, we’ll be back up for air shortly. The report looked, in part, at so-called [risk-adjustment]( payments, which are part of the ACA’s system for encouraging insurers to enroll high-cost patients. This system is meant to prevent insurers from cherry-picking the healthiest people on the market by collecting money from plans with healthier enrollees to distribute to plans that have people with higher health care costs. (Another type of payment discussed in the report, known as [reinsurance](, serves a similar purpose through a different mechanism: The government effectively covers part of the cost of patients with very expensive health needs.) To determine the mix of healthy and sick enrollees for risk-adjustment payments, the federal government assigns risk scores to people based on their age, sex and health diagnosis and then averages the scores for a plan. What CMS found was that [those averages were relatively stable]( in 2016. That’s a good sign for the marketplaces, because stabilizing the mix of healthy and sick people buying on the marketplaces goes a long way toward stabilizing prices. Despite expectations that in the face of rising premiums, healthier enrollees would be less inclined to enroll last year, that doesn’t appear to have been the case. That doesn’t mean the marketplaces are working for everyone. There are millions of people who don’t qualify for subsidies, face high prices in the private market and likely haven’t enrolled in insurance as a result. That’s a problem that needs solving, but it’s a different problem than the [marketplaces being in a death spiral](. More health care: CHIP on the block? While Congress has been debating plans to partially repeal and replace the Affordable Care Act, a lot of other legislation has been put on hold. Some of the delays have concerned things the Republicans in charge [want to deal with](, such as tax reform. But progress has also stalled on some things that Congress has to deal with. In the latter category is whether to renew funding for a program that provides health insurance to nearly 9 million children in the United States. The Children’s Health Insurance Program, or CHIP, was created in 1997 as a way to get health insurance to children whose families earned too much to qualify for Medicaid but whose incomes were small enough that it would be difficult to purchase insurance outright. [Around 8.9 million children]([1](#fn-1) were insured through CHIP at some point in 2016, according to government estimates. The program is administered by the states but partly funded by the federal government. That federal funding is set to expire on Sept. 30, but Congress has so far put off dealing with it. The last time the program’s funding came up for consideration in 2015, it was renewed for an additional two years under the same terms that the federal government had previously had with states. But this time around, CHIP renewal is hitting some snags: A Senate hearing that was supposed to begin the renewal process in May was canceled. Policy wonks, both [conservative]( and [liberal](, have warned that Republicans could use the program [as leverage]( to win Democratic votes on policies they would otherwise oppose — possibly including some health care changes if the Senate bill to repeal and replace the ACA is unsuccessful. [It wouldn’t be the first time]( politicians had wrestled over the program. State Medicaid directors, who also run CHIP in most states, were expressing concern about the slow renewal even before the May hearing was canceled. They [wrote a letter to Congress in March]( asking that it commit to the funds; today, nearly all of the [state legislatures have already adjourned for the year](, meaning that states have few options to pay for the program if Congress doesn’t renew the funding or reduces how much the federal government contributes. None of this is to suggest that Republicans are likely to kill off the program: CHIP has had bipartisan support since its inception. They could, however, reduce the share of the bill paid for by the federal government, [as Trump’s budget has proposed](, forcing states to make tough choices about how many children are enrolled in the program in the process. One thing that’s certain is that lots of things are on hold while Republicans try to follow through on their promise to repeal and replace the ACA. Education: Summer school President Trump has [drawn criticism]( from education groups for proposing [sharp cutbacks to education funding](. But the government is [getting plaudits]( for one move: [restoring year-round Pell grants](. The federal [Pell grant program]( helps cover tuition, fees and other costs for low-income students. [About 7.6 million students]( — roughly one-third of undergraduates — [received a Pell grant]( in 2015-16. But apart from a [brief period several years ago](, Pell grants typically haven’t been available for more than two semesters a year — meaning students who hoped to graduate early, or who needed to take summer classes, often had to borrow money to do so. In June, however, Education Secretary Betsy DeVos [announced]( the return of year-round Pell grants, starting July 1. Under the new policy, Pell grant recipients who are enrolled at least half-time can receive up to 150 percent of their standard two-semester grant over the course of an academic year, meaning they will be able to use the grants to pay for summer classes. The new policy [doesn’t change]( the Pell program’s lifetime cap of 12 semesters of aid. About 1 million students would benefit from the program, [Politico]( and [The Washington Post]( reported. Education advocates have [long argued]( that restoring the year-round Pell program is key to boosting low graduation rates among low-income students. While the national [graduation rate hovers around 59 percent](, only [45 percent of low-income students]( graduate in six years.[2](#fn-2) [Research has found]( that helping students graduate quickly is key to their success: The longer students spend in college, the less likely they are to graduate. Spending more time in school is expensive, too. Factoring in lost wages, the cost of each additional year after the first four amounts to $68,153, according to [Complete College America](, a research and advocacy group. But while education experts [praised the return to year-round Pell grants](, they said there are some limitations to the program. The budget deal that restored the program didn’t include extra money to pay for it; instead, it took [$1.3 billion]( out of existing Pell accounts. Trump’s [proposed 2018 budget]( likewise provides money for year-round Pell grants but [wouldn’t boost overall Pell funding](. That could put pressure on the Pell budget at a time when [the cost of college is rising](. Jessica Thompson, research and policy director at the nonprofit research and advocacy group [Institute for College Access and Success](, said the Department of Education needs to do more to direct aid money to the students who need it most. “Year-round Pell is one piece, but it is only one piece,” Thompson said. Environmental policy: No easy way out Last July, the Environmental Protection Agency made a formal determination that aircraft emissions [contribute to climate change and endanger public health](, setting in motion the process of creating new regulations on emissions from airplanes. The White House has changed hands since then, but the regulation process marches on: EPA [officials told the trade publication InsideEPA last week]( that they still plan to issue a proposed rule by January and finalize it by the end of 2018. If that seems a little odd, coming from an agency that’s also [in the process of rolling back]( other greenhouse gas emissions rules and looking at [cutting programs related to climate change](, welcome to the weird world of regulatory law, which has put Scott Pruitt’s EPA in a strange position: [publicly dubious of the idea that climate change is a real threat]( yet legally bound to treat climate change as a real threat. This particular story begins [back in 2007](, when the Supreme Court ruled that the EPA had to determine where the science stood on climate change — was there enough evidence to say that greenhouse gases are a threat to public health or not? The EPA reviewed the evidence and found it convincing enough to issue a so-called endangerment finding, which basically means that the EPA has to treat greenhouse gases as a dangerous pollutant under the Clean Air Act. Today, that determination is causing all kinds of headaches for Pruitt’s EPA. That’s because the endangerment finding can’t easily be struck from the books. Among other challenges, you’d have to prove that the science it’s based on was wrong. The finding has already been challenged (unsuccessfully) in court and Pruitt [has told both the White House and Congress that he won’t fight it](. The endangerment finding doesn’t mean the EPA is moving full speed ahead on greenhouse gas regulations, but it does make it harder to reverse the Obama administration’s policies. Rather than simply striking Obama-era rules from the books, for example, the EPA is contesting some of them on technical details. And even with this more focused approach, the administration is running into obstacles: On July 3, the U.S. Court of Appeals for the District of Columbia Circuit struck down an EPA moratorium, announced earlier this year, that would have halted the implementation of an Obama-era methane regulation for two years. Pausing the implementation of regulation was easier, legally speaking, than dismantling it outright — a process that would have forced the EPA to either replace that regulation with another one [or challenge the endangerment finding itself](. But, [the court ruled](, the pause button can’t be used as an “arbitrary” and “capricious” means of boxing out regulations you don’t like. The endangerment finding is a chasm, and Pruitt just lost one of his best bridges across it. --------------------------------------------------------------- Share [Facebook]([Twitter]([Email](mailto:?subject=I%20thought%20you’d%20like%20this%20article%20from%20FiveThirtyEight&body= [FiveThirtyEight] [View in browser]( [ESPN]( [Unsubscribe]( Our mailing address: FiveThirtyEight, 147 Columbus Avenue, New York, NY 10023.