Obamacare proponents have been increasingly shameless in trotting out scare statistics to convince people that the GOP wants to “make America sick again:”
Two Harvard professors–who, not uncoincidently, are diehard single payer advocates–are lamenting that “repealing the Affordable Care Act will kill more than 43,000 people annually”
False claims about the adverse effects of repealing Obamacare on mortality that are grounded in observational studies result from:
- Grossly exaggerating the number of people who would actually lose coverage. This exaggeration of lost coverage occurs even in the worst-case scenario that Obamacare is not replaced.
- “Excess” mortality estimates related to lack of coverage that are both upward-biased and unreliable by nature due to the inability of researchers to account for unmeasured influences.
- Inappropriate extrapolation of results to populations (e.g., Medicaid) not included in the original study.
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During the election campaign, Donald Trump promised to abolish Obamacare and replace it with better health reform that would not leave anyone behind. In order to understand what is implied by that promise, consider Figure I, which highlights three groups of people:
- About 11 million people are getting insurance in the exchanges and many of them are unhappy. In the words of former president Bill Clinton, many are “paying twice as much for half the coverage” they were previously enjoying.
- Another 11 million or so people are getting individual insurance outside the exchanges. These people have all the same problems as people in the exchanges. But, they receive no federal tax break for the purchase of insurance, even though a federal mandate requires them to buy it.
- In addition, about 29 million people are uninsured and that number is unlikely to change very much going forward. Polls show that the most important reason why so many people are uninsured is cost.
One way to think about Donald Trump’s campaign promise is to see that he wants to make health insurance less expensive and better for the first two groups without leaving the third group permanently uninsured. And he wants to do it with money that is already in the system. In other words, without raising taxes.
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The pre-existing conditions issue played a central role in the design of the Affordable Care Act, and dealing with this issue appropriately in any ACA replacement plan will be instrumental to the achievement of stable and sustainable individual and small group health insurance markets.
House Speaker Paul Ryan and House Republicans’ June 2016 Better Way health care reform proposals, supported by Representative Tom Price, President-elect Trump’s nominee to head HHS, will surely influence the development of replacement legislation. Consistent with the Better Way, there would appear to be fairly broad support among Congressional Republicans for a replacement plan that at a minimum (1) guarantees that people who maintain continuous coverage can do so at terms that do not reflect health status, (2) provides substantial incentives for people to purchase coverage before needing costly medical care, and (3) provides some form of safety net for those who fail to purchase and maintain coverage.
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Republicans and Democrats sparred during a hearing on Tuesday before the House Budget Committee on “The Failures of Obamacare: Harmful Effects and Broken Promises,” showing the division between Democrats who continue to defend the law and Republicans who heard clearly the call of the electorate to repeal and replace it. While millions of people have received health coverage under Obamacare, many millions more have felt personal harm. The law has negatively impacted young people, families, the poor, and businesses. Hundreds of thousands of people who purchased ObamaCare plans and paid their premiums have lost their coverage, and the law contains nearly two dozen taxes totaling more than $1 trillion, many of which are passed along to middle-income consumers in the form of higher premiums.
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During the 2016 campaign, Donald Trump promised to begin repealing and replacing the Affordable Care Act on Day One of his presidency. Within hours of his inauguration, he put a down payment on that promise, issuing an executive order instructing federal agencies to “take all actions consistent with law to minimize” the law’s economic burdens. The executive order could lighten the impact of Obamacare’s “essential health benefits” rule and could undermine the law by refusing to enforce its individual mandate. However, to fully repeal and replace the former President’s health law, Congress will need to pass new laws that can overcome a filibuster in the Senate.
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President-elect Trump continues to baffle his most ardent critics. A recent example is his declaration to Washington Post reporters on Saturday night that “We’re going to have insurance for everybody.” As Forbes opinion editor Avik Roy has pointed out, for at least 17 years, Donald Trump has been an advocate of universal coverage.
As is his prerogative (and evidently his wont), President-elect Trump offered no real explanation of what he meant by this. He assured us “they’ll be beautifully covered” but likewise reassured Republicans in Congress “I don’t want single payer.” So let’s take a moment to ponder how his words can be parsed. This is especially important given that his nominee to head the Department of Health and Human Services, Dr. Tom Price, “stopped short of saying all Americans should be covered” during his confirmation hearing yesterday.
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The individual mandate is Obamacare’s least popular feature. It was the subject of the 2012 lawsuit asserting Obamacare was unconstitutional: Never before had the federal government forced any resident to buy a good or service from a private business. The people lost that argument. Nevertheless, Republicans have pledged to eliminate the individual mandate. This commitment remains good politics. However, it is also good economics.
According to last November’s Kaiser Family Foundation Tracking Poll, only 35 percent of respondents have a favorable view of the individual mandate. The proportion drops to just 21 percent among Republicans, and just 16 percent among Trump supporters.
During the 2016 campaign, Donald Trump promised to begin repealing and replacing the Affordable Care Act on Day One of his presidency. Within hours of his inauguration, he put a small down payment on that promise, issuing an executive order instructing federal agencies to “take all actions consistent with law to minimize” the law’s economic burdens.
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This morning, the Congressional Budget Office released a report arguing that the partial repeal of Obamacare being contemplated by Republicans would wildly increase the number of people without health insurance, in ways that are difficult to understand. Here are four problems with the CBO’s analysis.
1. The CBO’s estimates assume no Obamacare replacement
2. The CBO massively overestimates the impact of Obamacare’s individual mandate
3. The GOP repeal bill is likely to treat Medicaid differently than the CBO does
4. CBO’s 2010 estimates of Obamacare’s coverage expansion were off by more than 10 million
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Health policy experts on both the left and the right need to take a deep breath and re-direct their collective energy to suggesting ways to improve the current regulatory environment. No industry stakeholder can say with a straight-face that the individual health insurance markets are functional. It is well-accepted that the markets are unbalanced. And it is well-established that the unbalanced markets are resulting in financial losses for insurance companies and premium increases for consumers.
Is this the Republicans’ fault? No. Is it the Republicans’ problem? Yes. As a result, once portions of the ACA are repealed in the coming weeks, Republicans will undertake efforts to improve the current regulatory environment. How? First, it is likely that Congress will fund the “cost-sharing” reduction subsidies for 2017, 2018, and likely 2019.
Second, Congress and the Administration will attempt to stabilize the individual insurance markets by requiring pre-verification before a person can enroll in an ACA Exchange plan during a “special enrollment period”; changing the 90-day grace period in cases where a policyholder fails to pay their premiums; prohibiting 3rd parties from paying premiums on behalf of certain consumers; providing more flexibility for insurance companies under the Medical Loss Ratio rules; continuing payments under the “reinsurance” program for 2016 (not to be confused with the “risk corridor” program); fixing the “risk adjustment” formula; and modifying the age variant for developing premium rates from a 3-to-1 to a 5-to-1 ratio. In addition, it is likely that funding will be provided to cover high-risk individuals – through high-risk pools or other means.
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