When it comes to their oft-repeated vow to repeal the Affordable Care Act, President-elect Donald Trump and his Republican allies in Congress are like the dog that chased the car. Now that they’ve caught it, what are they going to do?
It was easy to blame Obamacare for all the ills in the country’s dysfunctional health care system, even the problems that existed long before Democrats passed the measure expanding coverage to more than 20 million people.
But repealing the law and replacing it with something Americans will like more will be very difficult.
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To review, Obamacare has three main parts. First, it paid for a massive expansion of Medicaid, the program that provides care to low-income people. In California alone, 3 million-plus more people received coverage under Medi-Cal, with the federal government paying 90 percent of the cost.
Second, the law established new insurance exchanges where private insurance companies offer standardized coverage. Consumers can easily pick and choose among different companies and different levels of financial protection all offering the same basic benefits. Low-income and middle-income families get subsidies to make this coverage more affordable.
Finally, the law included a number of consumer protections. It ended annual and lifetime caps on the amount insurers would pay – practices that had bankrupted many people who had insurance but whose treatment cost more than the limits. The law also required insurance companies to cover children on their parents’ policy up to age 26. And, crucially, it banned insurers from excluding or charging more to people who had pre-existing health conditions.
Reversing the Medicaid expansion would be simple enough. Congress could just revert to the old eligibility rules and pull back money from the states. Republicans would have to deal with the political outcry from throwing millions of people off insurance, but nothing would stop them from doing so if they could stand the heat.
Abolishing the insurance exchanges and withdrawing their subsidies would take some time. But the change could be phased in over a year or two. Those customers who could afford insurance could move to unsubsidized coverage in a private market and the rest would be on their own again.
Repealing the consumer protections might be the most difficult. Most Americans like these new rules, even if they never gave the Democrats much credit for enacting them. Allowing insurers to once again exclude customers who have been sick, for example, would put all Americans an illness away from being denied coverage.
Trump now says he wants to keep that part of the law. But he doesn’t seem to understand that he can’t keep that provision without also preserving other parts that he opposes.
If anyone can get coverage, even if they are sick, no one will have an incentive to buy insurance until they need it. And if the only people who buy insurance are the ones who are already sick, the insurance industry collapses, because there are no healthy people paying in to spread the risk and the costs.
That’s why Obamacare required everyone to have insurance. And since not everyone could afford it, the law also expanded public programs and offered subsidies to help people buy private coverage. The insurance exchanges were an efficient way to deliver those subsidies and simplify shopping for consumers.
Bottom line: preserving the consumer protections Trump likes – in more than name only – without keeping the rest of the program will prove to be devilishly complicated, if not impossible.
Daniel Weintraub is editor of the California Health Report. He can be contacted at firstname.lastname@example.org.