President Joe Biden, with Vice President Kamala Harris (left), signs executive orders on health care, including reopening enrollment in the Affordable Care Act. The Biden administration has pledged to expand coverage and help improve affordability under the ACA. Photo by Mandel Ngan/AFP via Getty Images
Since the Affordable Care Act (ACA) became law, more than 20 million people have gained health insurance coverage, with the U.S. uninsured rate reaching a record low by 2016. 1 This expansion in coverage has improved access to care and narrowed racial and ethnic coverage disparities. 2
As with any complex legislation, however, the ACA’s success has been shaped by how federal officials have interpreted and implemented the law’s various requirements and programs. New administrations, each with its own policy preferences, can reach starkly different conclusions on what federal law allows or requires. 3 Federal officials generally have flexibility in implementing and administering the ACA so long as they comply with the Administrative Procedure Act.
The Administrative Procedure Act, adopted in 1946, governs the process that federal agencies must use when developing and issuing new rules. The law helps ensure that agencies use a fair process for decision-making and rely on a sound administrative record.
In general, when issuing a new rule, an agency must first publish a notice of proposed rulemaking in the Federal Register and provide an opportunity for the public to comment on the notice. The agency then publishes a final rule in the Federal Register that considers and responds to the public comments that were received. (There are some exceptions to this process that allow an agency to avoid having to provide advance notice or solicit public comment, such as when issuing nonbinding guidance or interim final rules in response to an emergency.)
The Administrative Procedure Act also establishes standards for courts to use when reviewing agency action. There is a substantial amount of case law regarding agency rulemaking and procedures under the Administrative Procedure Act. In general, the Supreme Court has held that an agency’s decision is arbitrary and capricious if the agency relied on factors that Congress did not intend for it to consider, failed to consider an important aspect of the problem, offered an explanation that runs counter to the evidence, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. This same standard applies to other types of agency action, such as the approval of state waiver requests.
Many Obama- and Trump-era rules and other actions were challenged on these grounds (in addition to constitutional grounds or under other statutes, such as the Religious Freedom Restoration Act). Past administrations have won about 70 percent of challenges brought under the Administrative Procedure Act. The Trump administration — which faced criticism for stretching the bounds of executive authority and not always heeding “the rules about the rules” — only won about 23 percent of these challenges.
Sources: 5 U.S.C. § 551 et seq.; Todd Garvey, A Brief Overview of Rulemaking and Judicial Review (Congressional Research Service, Mar. 27, 2017); Institute for Policy Integrity, “Roundup: Trump-Era Agency Policy in the Courts,” New York University School of Law, Feb. 2021; Bethany A. Davis Noll and Christine Pries, “The Administration’s Record in the Courts,” The Hill, Nov. 3, 2020; and Margot Sanger-Katz, “For Trump Administration, It Has Been Hard to Follow the Rules on Rules,” New York Times, Jan. 22, 2019.
In light of this flexibility, health care stakeholders offered a range of recommendations to the incoming Biden administration on ways to enhance the ACA and the Medicaid program. This analysis reflects a review of nine publicly available recommendations to the Biden–Harris presidential transition team from a diverse group of health care stakeholders. The stakeholders include a coalition of 33 patient advocacy organizations, Families USA, the Center on Budget and Policy Priorities, the Association for Community Affiliated Plans, the Federation of American Hospitals, the Catholic Health Association of the United States, the American College of Physicians, the State Health Exchange Leadership Network of the National Academy for State Health Policy (on behalf of 17 state marketplaces), and 11 state insurance commissioners. 4
These recommendations were identified based on a scan of publicly available organizational comments to the incoming Biden–Harris administration and selected to represent diverse stakeholder interests that span the health care industry. Not all sets of recommendations mention all issues, and silence should not be taken as a sign that the issue is not a priority. 5
Using its executive authority, the Biden administration has significant opportunities to shape the administration and evolution of the ACA and the Medicaid program using its executive authority. There is broad support among a diverse group of health care stakeholders for federal administrative policy changes to increase access to affordable, comprehensive health insurance and promote health equity. The priorities listed below were cited in a majority of the stakeholder recommendations (Exhibit 1). Those garnering the most support were: limiting the duration of short-term plans, reversing the Trump administration’s public charge rule, and rescinding Section 1332 guidance on “innovation waivers.”
All but one of the recommendations call for reversing Trump-era policies. The Biden administration has already heeded some of these calls, particularly in making operational changes that do not require new rulemaking. Other changes will require federal officials to release new guidance or issue new regulations that comply with the Administrative Procedure Act.
Recommendations were made before enactment of the American Rescue Plan Act, which makes significant enhancements to both the ACA and Medicaid but does not address the high-priority recommendations that stakeholders most frequently cited.
Nearly all stakeholders recommended greater federal investment in marketing, outreach, and enrollment assistance; a COVID-19 emergency enrollment period; and reverses to funding cuts and regulatory changes to the navigator program. The Biden administration has already implemented such policies. In response to an executive order, federal officials authorized a six-month COVID-19 special enrollment period where qualifying individuals can newly enroll in coverage or change their plan through HealthCare.gov. 6 Federal officials also authorized $100 million for marketing and will award $80 million for navigator grantees for 2022. 7
Most stakeholders also called for increased oversight of direct enrollment (DE) entities. DE was launched in fall 2013 in response to the challenging HealthCare.gov rollout and then expanded by the Trump administration, which created an “enhanced” DE pathway. Under this pathway, the entire marketplace enrollment process is completed on a third party’s website (meaning a consumer never visits or creates an account with HealthCare.gov).
Stakeholders echoed concerns that have long been raised about DE entities and the enhanced DE pathway. 8 The state insurance commissioners noted that expanded DE could undermine core goals of the ACA by providing incomplete information about coverage options to consumers and failing to coordinate with state Medicaid programs. The Federation of American Hospitals more simply urged the Biden administration to “strengthen standards for web brokers and brokers selling marketplace plans.”
Finally, stakeholders urged the Biden administration to rescind guidance and waivers that allow states to impose work or community-engagement requirements on Medicaid beneficiaries. These waiver approvals were successfully challenged in court, and the Supreme Court may rule on their legality even though the Biden administration rescinded prior guidance and revoked approved waivers. 9 Some stakeholders also highlighted the need to reverse other Medicaid waivers related to block grants, premiums, and lockouts.
Stakeholders made many other recommendations regarding access to coverage. These are not listed in Exhibit 1 because they were not included in the majority of recommendations. However, the Biden administration also was encouraged to:
Stakeholders urged the Biden administration to fix the “family glitch” and reverse the methodology for calculating the premium adjustment percentage. Legislation has been introduced, but not enacted, to address these issues, but the Biden administration could rectify these affordability challenges on its own.
The “family glitch” stems from an Obama-era interpretation of whether an offer of job-based coverage is “affordable” or not. 10 Currently, the definition of “affordable” for both an individual employee and their family is based on the cost of individual-only coverage. When an employee has access to an offer of “affordable” job-based coverage, the employee and their family are ineligible for premium tax credits through the marketplace. This is true even when the cost of family or spousal coverage is very high, meaning that the family members of low-income workers are ineligible for marketplace subsidies and cannot afford the family coverage being offered. This interpretation has been criticized for unfairly penalizing families and for being inconsistent with the goals of the ACA. 11
In the absence of a congressional fix, stakeholders urged the Biden administration to redefine “affordable” using the cost of family coverage. Doing so could extend marketplace subsidies to an estimated 5.1 million low-income people — more than half of whom are children — who do not currently qualify for financial help (and will not see relief under the American Rescue Plan). 12
The premium adjustment percentage is a measure of premium growth that helps determine how much individuals must contribute to premiums and out-of-pocket costs. The Trump administration altered this methodology in a way that increased premiums and out-of-pocket costs for millions of consumers. 13 Stakeholders urged the Biden administration to revert to a prior methodology that is less inflationary. The Biden administration did so in a spring 2021 rule; this methodological change will reduce the maximum limit on out-of-pocket costs for 2022 plans by $400 relative to the Trump-era methodology. 14
Stakeholders made many other recommendations regarding affordability. These are not listed in Exhibit 1 because they were not included in the majority of recommendations. However, the Biden administration also was encouraged to:
Stakeholders offered significant support for reversing Trump-era rules on short-term health plans and association health plans. Many stakeholders also urged the Biden administration to address other insurance products that are exempt from ACA protections.
Much attention has been paid to short-term health plans and association health plans following the Trump administration’s rules to expand access to those products. But these are not the only types of noncomprehensive insurance products currently on the market that are exempt (or largely exempt) from the ACA’s protections.
Stakeholders also raised concerns about fixed-indemnity products, farm bureau plans, health care sharing ministries, and direct primary care arrangements. Their concerns include inadequate benefits, deceptive marketing practices, consumer confusion, lack of state and federal oversight, and limited avenues for legal recourse. Some also highlighted emerging arrangements that seek to be regulated only under federal law and not state laws, as is the case with the Data Marketing Partnership, an arrangement that is under litigation in Texas.
Most stakeholders made fewer explicit recommendations as to how the Biden administration should address these other products. Stakeholders, such as the Association for Community Affiliated Plans, urged the Biden administration to institute robust data collection and reporting efforts for all types of noncompliant plans. And the state insurance commissioners urged the Biden administration to modernize the Department of Labor’s approach to oversight of federally regulated health plans.
Even without more explicit recommendations, stakeholders underscored the need for federal officials to explore policies to limit — or, at a minimum, monitor — a broader array of non-ACA products beyond short-term plans and association health plans. Doing so is critical to protecting consumers from these products, which often fail to offer comprehensive coverage and are increasingly marketed in aggressive, misleading ways.
Short-term plans do not have to meet the ACA’s requirements and include significant benefit gaps that make these policies less expensive and thus more attractive for younger and healthier people. 16 The Obama administration limited the sale of short-term plans to those that cover only three months. The Trump administration revised that rule to allow short-term plans to provide coverage for up to one year and be renewed for up to three years. The Trump-era rule was challenged, but ultimately upheld, in court. 17 Congress, the court noted, gave the government “wide latitude” to define short-term plans and made clear that a future administration could narrow this definition and further revise the rule on short-term plans. 18
The association health plan rule enabled sole proprietors and small businesses to enroll in large-group coverage that is not subject to the same protections that apply in the individual and small-group health insurance markets (such as rating limits based on age or gender). Most of the rule’s provisions were invalidated by a district court judge. 19 That decision was appealed, but a decision has not yet been issued, and the Biden administration asked for a delay in the litigation to consider its options.
Stakeholders generally urged the Biden administration to reinstate Obama-era restrictions on short-term plans and to reverse the association health plan rule, with some encouraging additional restrictions on short-term plans. These include a ban on the purchase of consecutive short-term plan policies (known as stacking) and a ban on sales during the annual marketplace open enrollment period.
Stakeholders made many other recommendations regarding coverage adequacy. These are not listed in Exhibit 1 because they were not included in the majority of recommendations. However, the Biden administration also was encouraged to:
Stakeholders strongly urged the Biden administration to reverse the “public charge” rule which discouraged immigrants from enrolling in certain public programs, such as Medicaid, even when eligible. 20 The Supreme Court was scheduled to hear some of the challenges to the public charge rule, but the Biden administration settled the lawsuits, leading to dismissal. The U.S. Department of Homeland Security then formally rescinded the rule. 21
Stakeholders also recommended reversing changes made by the Trump administration to implement Section 1557 of the ACA, the law’s primary nondiscrimination provision. The Trump-era rule eliminated certain language-access requirements (such as a requirement to include translated taglines on consumer notices and allowing audio, instead of video, interpretation services) and explicit protections for LGBT patients, among many other changes. 22 The Biden administration announced in guidance that it would enforce Section 1557’s protections on behalf of LGBT people, 23 but new rulemaking and additional changes are expected. Implementation of Section 1557 has long been litigated, and challenges over both Obama- and Trump-era interpretations remain pending.
Stakeholders made many other recommendations regarding health equity. These are not listed in Exhibit 1 because they were not included in the majority of recommendations. However, the Biden administration also was encouraged to:
Many stakeholders urged the Biden administration to rescind the current approach to state innovation waivers under Section 1332 of the ACA. The Trump administration replaced Obama-era guidance with its own interpretation of Section 1332 that was criticized as legally unsound. 24 That interpretation was ultimately adopted in regulations. 25
Beyond reverting to Obama-era policy on Section 1332, several stakeholders asked for additional flexibility in the use of Section 1332 waivers. The State Health Exchange Leadership Network, the state insurance commissioners, the American College of Physicians, and Families USA identified ways that Section 1332 could better enable state experimentation to advance progressive policy goals. Some of these stakeholders explicitly noted the use of Section 1332 waivers for state public health insurance options.
Stakeholders made many other recommendations regarding state flexibility. These are not listed in Exhibit 1 because they were not included in the majority of recommendations. However, the Biden administration also was encouraged to:
The Biden administration has flexibility to change its positions on ACA and Medicaid policies. The recommendations discussed in this brief offer a framework for policy changes that are supported by diverse health care stakeholders and are consistent with President Biden’s goals of protecting and strengthening the Affordable Care Act and Medicaid. These policies also complement the changes made under the American Rescue Plan and the Biden administration’s stated commitment to advance health equity.
Stakeholder consensus was greatest on the need to reverse Trump-era changes. This is likely because those policy changes are well-known and understood. 26 Apart from fixing the family glitch, there was less consensus for affirmative policies that go beyond reversing Trump-era changes. Stakeholders were supportive of new affirmative policies but included fewer specific recommendations. This suggests that additional policy development will be helpful to further build consensus as the Biden administration turns to new rulemaking.
Stakeholders also emphasized the need for policies that help people enroll in and stay enrolled in coverage, including the millions of people who are already eligible for, but not enrolled in, subsidized marketplace coverage or Medicaid. To make this vision a reality, stakeholders urged the elimination of bureaucratic eligibility hurdles; auto-enrollment based on, say, the receipt of Supplemental Nutrition Assistance Program (SNAP) benefits; continuous Medicaid eligibility for adults; and consumer-friendly plan design policies (such as facilitated plan selection, standardized plans, and meaningful difference standards). These changes would likely reduce enrollment barriers and make it easier for families to select a plan and keep their coverage.
In making changes, federal officials are required to comply with the Administrative Procedure Act and fully justify all policy changes. 27 Failure to do so will make it harder to defend legal challenges before a much more conservative federal judiciary. 28 Litigation could inhibit, or at least delay, progress on these stakeholder priorities.
The Biden administration can use executive action to increase access to affordable, comprehensive health insurance and promote health equity in the areas of private health insurance and Medicaid. Doing so is supported by a range of diverse health care stakeholders.
The author thanks Tim Jost, Rachael Klarman, and Kevin Lucia for their thoughtful comments and suggestions.
3. There are more than 1,000 instances in the Affordable Care Act where Congress explicitly directed or permitted federal officials to act (such as issue new regulations or award grants). Simon F. Haeder and Susan Webb Yackee, “A Look Under the Hood: Regulatory Policy Making and the Affordable Care Act,” Journal of Health Politics, Policy & Law 45, no. 5 (Oct. 2020): 771–86. Beyond explicit directives from Congress, federal agencies have authority to interpret federal laws within their purview and to, for instance, clarify statutory terms or requirements. Courts have generally deferred to agency interpretations of federal laws that are silent or ambiguous so long as the agency’s interpretation is reasonable. This is generally known as the Chevron doctrine. Valerie C. Brannon and Jared P. Cole, Chevron Deference: A Primer (Congressional Research Service, Sept. 19, 2017).
4. The 100 Days Agenda: A Patient-First Blueprint, Recommendations on Behalf of 33 Patient Advocacy Organizations (Leukemia & Lymphoma Society, Oct. 2020); Families USA Health Equity Task Force, Eight Recommendations for Federal Policy Priorities in 2021 (Families USA, Jan. 2021); Stan Dorn and Frederick Isasi, “President-Elect Biden Can Take Administrative Action to Dramatically Cut Consumers’ Health Care Costs and Cover Millions of Uninsured,” Health Affairs Blog, Dec. 7, 2020; Sarah Lueck, Administration Should Act to Expand and Improve Health Coverage (Center on Budget and Policy Priorities, Jan. 2021); Margaret A. Murray, “ACAP Recommendations for Regulatory Changes to Medicaid, Medicare, and the Marketplaces to the Biden–Harris Agency Review Team for the Department of Health and Human Services,” letter from the Association for Community Affiliated Plans to Chiquita Brooks-LaSure of the Biden–Harris Agency Review Team, Dec. 22, 2020; Charles N. Kahn III, Letter re: Transition Team Recommendations, letter from the Federation of American Hospitals to the Biden–Harris Transition Team, Dec. 22, 2020; Sr. Mary Haddad, Letter re: Transition Team Recommendations, letter from the Catholic Health Association of the United States to the Biden–Harris Transition Team, Jan. 7, 2021; Jacqueline W. Fincher, Letter re: Transition Team Recommendations, letter from the American College of Physicians to the Biden–Harris Transition Team, Dec. 10, 2020; Trish Riley, “State-Based Marketplace Strategies for Insurance Market Stabilization and Improvement,” letter from the State Health Exchange Leadership Network of the National Academy for State Health Policy to the Biden–Harris Transition Team, Nov. 20, 2020 (these recommendations are consistent with similar analyses of the priorities of state marketplace officials); Rachel Schwab et al., Federal Policy Priorities for Preserving and Improving Access to Coverage: Perspectives from State-Based Marketplaces (Commonwealth Fund, Feb. 2021); and “Priorities to Strengthen Insurance Coverage and the ACA,” letter with recommendations on behalf of 11 state insurance commissioners to the Biden–Harris Transition Team, Dec. 23, 2020.
5. Recommendations from Families USA, for instance, focused primarily on “affirmative” steps that the Biden administration could take and only generally note the need to “revers[e] harmful Trump administration policies.” See Dorn and Isasi, supra note 4. In acknowledging the need to “go beyond reversing harmful Trump administration policies,” Families USA linked to a piece that encouraged federal administrative action consistent with those recommended by others here. These actions included authorizing a COVID-19 emergency enrollment period for HealthCare.gov; increasing marketing, outreach, and enrollment assistance; fixing the family glitch; and reversing the public charge rule. See Katie Keith, “CMS Could Do More in Light of the Coronavirus Crisis,” Health Affairs Blog, Mar. 25, 2020.
13. Tara Straw, “Trump Proposal Threatens Coverage of HealthCare.gov Enrollees,” Off the Charts (blog), Center on Budget and Policy Priorities, Dec. 7, 2020; and Aviva Aron-Dine and Matt Broaddus, Change to Insurance Payment Formulas Would Raise Costs for Millions with Marketplace or Employer Plans (Center on Budget and Policy Priorities, updated Apr. 26, 2019).
17. Katie Keith, “Appeals Court Upholds Rule Relaxing Short-Term Plan Restrictions,” Health Affairs Blog, July 19, 2020. One judge dissented, asserting that the Trump administration’s rule conflicts with the Affordable Care Act because it expanded a narrow statutory exemption for short-term plans into a parallel market that competes with Affordable Care Act coverage.
18. Association for Community Affiliated Plans v. U.S. Department of the Treasury, 966 F.3d 782, 790, United States Court of Appeals for the District of Columbia Circuit, July 17, 2020.
19. Timothy S. Jost, “The Past and Future of Association Health Plans,” To the Point (blog), Commonwealth Fund, May 14, 2019.
27. Federal agencies will need to acknowledge a change in the policy, explain why the agency believes the new policy is better, identify factual or policy arguments for why it is changing its position, and address the interests of those who may have relied on the prior interpretation.
