The Affordable Care Act in 2019: Still alive

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Two years into the Trump administration, the Affordable Care Act (ACA) remains law yet Republican lawmakers and the administration have reshaped parts of it through legislative, regulatory, budgetary and legal actions. In 2019, these actions will create new winners and losers.

Healthy individuals and small businesses seeking cheaper premiums will benefit in 2019, as will payers selling short-term, limited duration insurance and supporting association health plans. New entrants specializing in underinsured and uninsured consumers may find new markets thanks to Republican actions to expand access to these plans. Financial services companies, makers of nonretail medical devices and employers offering high-cost insurance plans all will enjoy modest gains too.

On the losing end of these policies and decisions are middle-class consumers seeking comprehensive coverage on the ACA exchanges, and providers and payers dependent on patients covered by Medicaid or ACA plans living in conservative-leaning states that are more skeptical of the law. Some ACA revenue-raising provisions have been delayed or eliminated, exacerbating their situation.

The administration’s efforts to chip away at the ACA can be seen around the law’s edges through softening individual and employer mandates, expanding access to health insurance plans that don’t conform to ACA rules, reducing operational and financial support for individual exchanges, dialing back on Medicaid spending and expanding the use of health savings accounts.

Explore key findings


Individual mandate penalty reduces to $0 on Jan. 1, 2019; HHS reduces paperwork to claim hardship exemption for 2018 tax year filed in 2019


In 2019, increases number of uninsured by 4 million, reduces individual markets by 3 million, reduces Medicaid population by 1 million


Consumers wishing to purchase short-term, limited duration insurance (STLDI) or go without coverage; new entrants serving cash customers


Providers in states that don’t replace penalty; payers dependent on ACA exchanges


Expanded access to association health plans (AHP) and short-term limited duration insurance (STLDI) through rule-making process. Sales began late 2018, with 2019 as first full year


In 2019, enrollment in STLDI increases by 600,000, decreasing on- and off-exchange enrollment by 500,000; AHP enrollment expected to be 4 million by 2023


Payers selling STLDI and supporting administration of new products in states that allow sales; healthy individuals, self-employed and small employers seeking cheaper coverage


Providers in states embracing sales; payers heavily dependent on nongroup and small group sales in states allowing sales; middle-class nongroup consumers seeking comprehensive coverage


In 2019, reduced ACA enrollment periods, reduced funding for navigators and advertising


7% decrease in ACA enrollment between 2016 and 2018, when 11.8 million enrolled


Sellers of STLDI and AHPs


Providers serving large numbers of ACA patients; payers dependent on ACA exchanges


Delays on taxes on payers, high-cost employer-sponsored insurance and nonretail medical devices


Reduction in federal revenues of $14.6 billion in fiscal year 2019


Payers, employers offering “Cadillac” plans; medical device companies


Federal Coffers


Approvals of Section 1115 waivers are allowing creation of state Medicaid work requirement programs. At least three states will operate programs in 2019


In Arkansas, 4,300 beneficiaries were cut in September


States with work requirements may see modest decreases in state Medicaid spending


Payers and providers serving Medicaid beneficiaries in states with work programs


Congress will consider several bills in 2019 to increase allowable contributions and goods and services eligible for HSA funds


If legislation passes, federal revenues would decrease by about $650 million in the first fiscal year


Affluent consumers; financial services companies servicing HSAs; providers serving patients with high deductibles and well-financed HSAs


Federal coffers

President Donald Trump, his administration and the Republican party campaigned in 2016 on repealing and replacing the ACA but failed to do it in a single piece of legislation in 2017.1 “Repeal and replace” as a political rallying cry fell away in this fall’s midterm elections, but in 2019, reshaping the law will remain a goal for the president, his administration and Republican lawmakers.2

Christopher Holt, director of health care policy for the Washington, D.C.-based American Action Forum, can foresee a scenario in which Republicans feel compelled to take another run at the ACA. “There’s certainly the potential for another round of ‘repeal-and-replace’ efforts in some form,” he told HRI in an interview. “There are elements inside Congress and the administration that feel that changing the ACA is why they’re here. They’ll want to push, and it will be hard for congressional leaders not to play that out.”

These endeavors are occurring against a backdrop of general industry deregulation, including CMS’ campaign to reduce reporting requirements and paperwork for providers and the FDA’s efforts to streamline medical product reviews.3,4 The health industry also is contending with the president’s proposed and enacted tariff increases on Chinese exports to the US—including some medical products and materials used to make them—which have triggered Chinese tariffs on American exports.5,6

In 2019, providers and pharmaceutical and medical device companies will benefit from deregulation, while some life sciences and durable medical equipment companies may be caught in the middle of the US and China’s simmering trade war.

Nine years after the ACA’s passage, Americans remain ambivalent about the law. Residents of the 34 states and the District of Columbia that expanded Medicaid under the law were more likely to say the law helped their family than respondents living in the 17 states that didn’t expand Medicaid, according to an HRI survey conducted shortly before the 2018 midterm elections.

Respondents living in Medicaid expansion states also were less likely to say the law had hurt their families. While residents of expansion states were more likely to favor strengthening or modifying the law than those in non-expansion states, more than a third of expansion state residents said they favor repealing and/or repealing and replacing the law.


Of all the actions that the Trump administration and Republican lawmakers took to affect the ACA, the one that will most strongly affect the health industry in 2019 is the reduction of the ACA individual mandate penalty to $0 on Jan. 1, a change included in the Tax Cuts and Jobs Act of 2017.8

The Congressional Budget Office (CBO) estimates that 4 million Americans will choose to forgo coverage in 2019 because of the $0 individual mandate penalty.Three million likely will be Americans who otherwise would have purchased comprehensive nongroup coverage, while 1 million likely will be people who would otherwise have enrolled in Medicaid, according to the CBO.10

This means the $0 individual mandate penalty will have the most significant effect on Medicaid in 2019. This is in spite of CMS’ headline-grabbing approvals of work requirement programs for Medicaid expansion beneficiaries in a handful of conservative-leaning states, including Arkansas and Indiana.11 In Arkansas, the first state to establish a work requirements program, 4,353 beneficiaries lost benefits in the first three months for failing to comply with the program.12 In 2019, 170,000 Arkansas expansion beneficiaries will be subject to the requirements, according to the state. At least three states will operate under work requirements in 2019, with more likely to join.13

Providers and Medicaid managed care organizations serving Medicaid populations in Arkansas, Indiana and other states that eventually launch work requirement programs could see a slow attrition in coverage in 2019 as beneficiaries gradually lose coverage for failing to comply. Providers in these states could find themselves responsible for educating beneficiaries about the programs to help them remain compliant, and also helping former beneficiaries understand why they lost benefits once they seek care.

The administration’s new regulations allowing longer terms for short-term, limited duration insurance, which is exempt from many of the ACA’s consumer protections, will create opportunities for payers selling and supporting these products in 2019, the first full year they will be sold under the new rules.14 The same is true of association health plans.15 In 2019, the administration’s new rules will allow more people to join forces for coverage under these products, which may be subject to fewer restrictions than nongroup and small group plans under the ACA.16

The CBO estimates that an additional 600,000 people will buy short-term, limited duration plans in 2019, with up to 4 million additional people covered by association health plans by 2023.17 Losers will include payers focusing on sales of ACA nongroup and small group coverage as hundreds of thousands of their customers swap those plans for the cheaper short-term and association ones.

Lawmakers also have made headway continuing delays of ACA taxes and fees, including the excise tax on nonretail medical devices, the fee on health insurance providers and the excise tax on so-called “Cadillac” employer-sponsored health plans.18 Together, these provisions would have raised $14.6 billion in revenue in fiscal year 2019.19

In 2019, lawmakers from both parties also may opt to increase the amount Americans are allowed to contribute to health savings accounts (HSAs) and expand the goods and services that can be purchased with those funds.20 This decision, put forth in several bills under consideration, would modestly benefit financial services companies servicing these accounts and reduce federal revenue by about $650 million during the first fiscal year.21

The reason for the relative pittance? Only 13 percent of HSA account holders contributed the maximum allowable amount in 2016, according to a study by the Washington, DC-based Employee Benefit Research Institute.22 An expansion would mostly benefit a relatively small number of affluent Americans, offering them a tax-sheltered way to pay medical bills and perhaps making it a little easier for the providers who care for them to chase down those bills.

Broadly, the administration’s actions affecting the ACA have shifted power to the states, which means the fates of many providers and payers depend on decisions made by state lawmakers and bureaucrats. Empowered, states are nurturing innovation for the industry. New Jersey, Vermont and Massachusetts have individual mandate penalties to stand in for the $0 federal one.23 Others, such as Alaska and Wisconsin, have opted to create reinsurance programs to pay high-cost ACA claims in an attempt to keep premiums down.24 Others are still ripe for experimentation in the Medicaid space, even as budgets grow tighter. Which states will take on which initiatives is partially determined by their political makeup, though the goals are the same: fewer uninsured people and reduced healthcare costs.

“There’s an incredible opportunity for states to be innovative,” said Samantha Burch, senior director of congressional affairs at Chicago-based Healthcare Information and Management Systems Society, in an interview with HRI. “Health policy battles may get started on Capitol Hill, but they more often than not are won or lost in a statehouse.”


Care delivery must move beyond the office and to a broader team

Anticipating less robust coverage on individual and nongroup markets due to the greater availability of insurance plans that don’t conform to ACA regulations, providers and payers should develop plans for triaging patients and members to lower-cost care options, including telehealth or in-home nurse visits. Providers also should pair patients with the most appropriate clinician to address patients’ immediate health issues. This could mean scheduling them with a nurse, dietitian, mental health specialist or social worker instead of a higher cost physician.

HRI found that a well-designed primary care team could result in savings of $1.2 million per 10,000 patients served annually.25 Providers and payers should enlist social and community supports to address the social determinants of patients’ health—such as obtaining reliable transportation or food security—and drive adherence to treatment plans with the goal of reducing avoidable hospitalizations and emergency room visits. Longer-term strategies should focus on tackling fixed costs, such as replacing certain physical infrastructure with virtual infrastructure, and creating a value line of product and service options at different price points for patients.

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Attention to drug prices will increase despite a slowdown in rulemaking for manufacturers

An ACA provision that would implement monetary penalties on manufacturers that knowingly charge more than the ceiling price for a covered outpatient drug under the 340B purchasing program is scheduled to go into effect July 1. The Trump administration had previously delayed the provision. Lawmakers in 2019 will be increasingly interested in how 340B entities are using the benefit and whether or not savings generated by the program are making it to consumers or padding companies’ pockets. Government scrutiny of drug prices is expected to continue. Seventy-three percent of Americans surveyed by HRI said they want the government to do more to control the cost of prescription drugs.

The frail elderly, consumers with chronic conditions and consumers with a mental illness most strongly endorsed government action. In July 2018, after drawing criticism from President Trump, drug companies Novartis and Pfizer announced they would freeze prices on their products in the US for the remainder of 2018.26

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Insurance regulations are falling to states, creating a patchwork

States will be taking more direct action to secure their insurance markets in 2019, even as the methods for doing so become more variate, creating challenges for regulatory compliance. In all states, payers will be able to sell more products in the individual and group markets, but regulations of those products will differ. States that don’t ban new products outright could still place greater restrictions on their use than federal regulations allow for.

At the same time, states will seek ways to stabilize marketplaces through federal assistance, particularly through reinsurance programs designed to reimburse payers with high-cost beneficiaries and slow individual plans’ premium increases. When making decisions in 2019, payers seeking to get the most out of new opportunities should avoid thinking of states as red or blue when they approach marketplaces and should instead closely follow state regulatory decisions.

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1 PwC Health Research Institute, “President-elect Donald Trump: Turnaround time,” November 2016,

2 PwC Health Research Institute, “Healthcare after the 2018 mid-term elections: As control shifts, certainty settles in,” November 2018,

3 Centers for Medicare and Medicaid Services, “CMS administrator Verma announces new Meaningful Measures initiative and addresses regulatory reform; Promotes innovation at LAN Summit,” October 2017,

4 PwC Health Research Institute, “The FDA leans forward: Dr. Scott Gottlieb’s opportunity to reshape the agency,” July 2017,

5 Office of the United States Trade Representative, “USTR finalizes tariffs on $200 billion of Chinese imports in response to China’s unfair trade practices,” September 2018,

6 Office of the United States Trade Representative, “Tariff list — September 17, 2018,” accessed Oct. 25, 2018,

7 For this analysis, PwC used Kaiser Family Foundation data to assess which states had adopted Medicaid expansion as of Oct. 1, 2018, when our survey question was posed to consumers. Note that states that have voted for but not implemented Medicaid expansion, or are in the process of doing so, were not included as “Medicaid expansion” states. States identified as “Medicaid expansion” include: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Vermont, Washington and West Virginia. The District of Columbia also expanded Medicaid. The Henry J. Kaiser Family Foundation, “Status of State Action on the Medicaid Expansion Decision,” accessed Oct. 8, 2018,

8 PwC Health Research Institute, “Tax reform imposes costs on tax-exempt healthcare organizations as for-profit peers weigh benefits,” February 2018,

9 Congressional Budget Office, “Repealing the Individual Health Insurance Mandate: An Updated Estimate,” November 2017,

10 Ibid.

11 Centers for Medicare and Medicaid Services, “State Waivers List,” accessed Oct. 15, 2018,

12 Office of Gov. Asa Hutchinson, “Coverage Closures for Arkansas Works Recipients Who Did Not Meet Work & Community Engagement Requirement for Three Months,” October 2018,

13 PwC Health Research Institute, “Medicaid work requirements could affect millions of beneficiaries and billions in spending,” April 2018,

14 “Short-Term, Limited-Duration Insurance,” 83 FR 38212, 2018,

15 PwC Health Research Institute, “Expansion in sales of two kinds of health plans likely to have modest impact on industry,” August 2018,

16 “Definition of ‘Employer’ Under Section 3(5) of ERISA-Association Health Plans,” 83 FR 28912, 2018,

17 Congressional Budget Office, “Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2018-2028,” May 2018,

18 Congressional Budget Office, “CBO Estimate for Divisions B of Rules Committee Print 115-55—The Extension of Continuing Appropriations Act, 2018 (Discretionary Spending Only),” January 2018,

19 Ibid.

20 Congressional Budget Office, “H.R. 6306 Health Care Security Act of 2018,” July 2018,

21 Ibid.

22 Employee Benefit Research Institute, “Health Savings Account Balances, Contributions, Distributions, and Other Vital Statistics, 2016: Statistics from the EBRI HSA Database,” September 2017.

23 New Jersey Legislature, “New Jersey Health Insurance Market Preservation Act,” A. 3380, 218th legislature, February 2018,; Vermont General Assembly, “An act relating to establishing a State individual mandate,” H. 696, 2017-2018 Session, May 2018,; “An act providing access to affordable, quality, accountable health care,” Mass. MGL c.111M, 2006,

24 PwC Health Research Institute, “ACA reinsurance gains steam,” Aug. 3, 2018,

25 PwC Health Research Institute, “ROI for primary care: Building the dream team,” October 2016,

26 Katie Thomas, “Bowing to Trump, Novartis joins Pfizer in Freezing Drug Prices,” New York Times, July 2018.

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