It is vital that the new Administration, Congress, and state officials orchestrate a smooth and methodical transition for the repeal of Obamacare. For this smooth transition to take place, Congress should act immediately to initiate repeal and the Administration should take aggressive administrative actions to stabilize the private market for the upcoming 2018 plan cycle. The Administration, Congress, and the states should then coordinate efforts to begin the process to have a set of reforms in place for the 2019 plan cycle.
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With Republicans controlling the White House and Congress in January, they’re faced with delivering on their long-time promise to repeal and replace the ACA. Because Republicans will control the Senate by just 52-48, the Senate will have to navigate the complex reconciliation rules processes to avoid filibusters, which require 60 votes to end. Their key policy challenge is to protect the millions of people receiving coverage under the law and convince insurers to continue to offer coverage.
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The election of Donald Trump as president, along with the Republican Party’s retention of both houses of Congress, sets the stage for the long-promised repeal and replacement of the Affordable Care Act (ACA), popularly known as Obamacare. Obamacare boosters warn that repeal would throw 20 million Americans who have gained health insurance coverage through the law back into the ranks of the uninsured overnight. The truth is more complex. Nearly half of the coverage gains made during Obama’s presidency had nothing to do with ACA provisions and will survive repeal. Many other newly insured people will keep their coverage—if changes are made to health-care financing, and if two popular ACA provisions President-elect Trump has spoken favorably of are retained.
Repealing most of the ACA, retaining a few provisions, and replacing programs in 2018 will rid the country of one the most contentious, complex, and wasteful pieces of social engineering ever enacted—and set the stage for a more efficient, consumer-centered health-care system.
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Recent economic research calls into question the value of ObamaCare’s Medicaid expansion, and indeed the entire Medicaid program. In one study, MIT health economist Amy Finkelstein and her colleagues found that Medicaid produced no discernible improvement in enrollees’ measured physical health outcomes. In another, Finkelstein and colleagues estimated enrollees receive only 20-40 cents of benefit for every dollar the program spends.
Researchers at The Economist went looking for factors to explain why Donald Trump outperformed Mitt Romney’s showing in key states four years prior. They found ”the single best predictor identified so far of the change from 2012 to 2016 in the share of each county’s eligible voters that voted Republican” is how low the county scores on an index of public health measures.
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The House of Representatives has asked the Federal Court of Appeals for the D.C. Circuit to temporarily pause the House lawsuit challenging an ACA subsidy program, a move that could allow the incoming Trump administration to swiftly unwind the ACA exchanges. The House argues that the ACA did not fund payments to health insurance companies to help low-income people pay for their out-of-pocket health care costs, which the Obama administration has been paying anyway. If the court approves the request, it would allow Trump’s new administration time to decide whether it wants to keep defending a pivotal part of the health care law as it plots out a strategy to repeal the ACA. If Trump’s Justice Department doesn’t continue to defend the ACA, the subsidies could be eliminated immediately (unless Congress makes a deliberate decision to legally fund them).
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The Department of Health and Human Services finally released the 2015 Affordable Care Act risk corridor data. The data show the rapid deterioration of the ACA exchanges from 2014 to 2015.
The ACA’s risk corridor program was intended to transfer funds from profitable insurers to unprofitable ones for the first three years of the exchanges (2014 to 2016). The program ran a $2.5 billion deficit for the 2014 plan year as far more insurers incurred losses than made profits. In 2015, the deficit increased to more than $5.8 billion—a 132% increase.
If taxpayers are forced to bail out insurers for these losses, the total tab for 2014 and 2015 now exceeds $8.3 billion. If insurers’ experience in 2016 tracks what happened in 2015, the total 3-year risk corridor deficit will exceed $14 billion. The Obama administration has given mixed signals about whether it will tap taxpayer funds to bail out insurers for these losses. We now know just how much money is at stake.
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Thanks to all of the issues with our vast and complicated healthcare system, any attempts at reform will require massive amounts of effort, political capital, cooperation from various public and private entities and, likely, luck. So while Donald Trump ran on a platform of “repealing and replacing Obamacare”, it might be wise to start with some small changes to the Affordable Care Act (ACA) that could still have large benefits.
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Donald Trump and Republicans in Congress are vowing to repeal and replace the Affordable Care Act, the signature health care overhaul of President Obama.
Trump has offered a few ideas of where he’d like to see a health care overhaul go, such as a greater reliance on health savings accounts, but he hasn’t provided a detailed proposal.
The absence of specifics on health care from the president-elect makes the 37-page plan that Speaker of the House Paul Ryan has released the fullest outline of what Republicans would like to replace Obamacare.
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