It’s very possible that the pejorative “Obamacare” could become the even more pejorative “Trumpcare” in a very short period of time. That is because Trump’s and the GOP’s promise to repeal Obamacare — the Affordable Care Act (ACA) — has already hit a snag called reality.
Reports are now circulating that the much-promised repeal of the health care law (60 plus House and Senate votes since 2010) won’t take effect until at least 2019, after the mid-term elections. The excuse is that it’ll take that long to figure out an alternative and get it into place. But congressional calendars and political expedience have nothing to do with the health care market. And without action early in 2017, the health insurance exchanges could collapse in 2018 or sooner — leaving millions without insurance, millions more without protections from pre-existing conditions, and possibly millions more cursing Trumpcare. The only constructive solution is to repair the ACA before, ironically, repealing it and then replacing it with a brand new, untested experiment in 2019.
Here is why: the exchanges where 12 million people shop for individual coverage for their families are careening on the shoals as we speak. Years of gridlock have stymied critical fixes to exchanges. Many insurers have pulled out after losing millions of dollars. Others are threatening to bolt, leaving the exchanges’ insurance market teetering on the brink of collapse. And that was before the election when the ACA seemed a permanent certainty.
Now the situation is Code Red. Insurers will be making their decisions in February, 2017 about whether to remain in the exchanges in 2018.
The Trump administration doesn’t have much time and could make health care much worse by blowing up the ACA without regard to the impact on people’s lives.
To some conservatives in Congress, that is great news. They were always for repeal and only grudgingly for replace. But that’s not the promise Donald Trump made. He promised a new universal health care law that will “take care of everyone” and is “better health care, much better, for less money” than Obamacare. Republicans will have to decide for themselves whether they believe Trump’s promise or not. The public will know soon enough because the Trump administration doesn’t have much time and could make health care much worse by blowing up the ACA without regard to the impact on people’s lives. All it has to do is reverse any number of the Obama administration actions taken to make the law work as intended, which Republicans have decried in the past. For example, the Trump Administration could drop its defense against an ongoing lawsuit that threatens payments to help consumers pay for out-of-pocket costs like deductibles. It could also undermine two critical programs that help stabilize insurance premiums called reinsurance and risk corridors, which were promised to health plans to provide limited coverage of initial losses in the exchanges.
Alternatively, congressional Republicans could use budget reconciliation in the first 100 days of the new Congress to repeal the ACA mandates they have railed against and subsidies they have opposed. But each would cause an insurance death spiral. Each would leave in place insurance rules that require health insurance plans to cover everyone who is sick without enough healthy people to make insurance affordable or the financing to make up the difference.
This is where cruel irony for the GOP comes in because the only way to replace the ACA is to repair it and make it better. After six years of pitchforks and promises, Republicans will need to reverse course on their scorched-earth approach to the ACA and instead shore up the exchanges in the short term to avoid these disasters for individuals, families and the health care market. Moreover, the ramifications for failure extend to all Americans regardless of coverage under the ACA. For instance, hospitals stand to lose $165.8 billion over 10 years from repealing the ACA, which would degrade their ability to serve everyone in their community.
This is where cruel irony for the GOP comes in because the only way to replace the ACA is to repair it and make it better.
If Republicans act smart, there are plenty of practical fixes to salvage coverage in time for 2018. First and foremost is to stabilize the insurance market for people who buy coverage through exchanges. One approach could be a temporary high-risk pool to cover the cost of the sickest enrollees, which would stabilize the premiums for others. They could also grant regulatory relief for rules that discourage health plan participation in the exchanges, such as requirements to offer highly generous benefit options or to participate in a small business program called SHOP, which has never proved to be popular. Republicans also could put their own stamp on the regulatory process by eliminating duplicative federal and state oversight and enabling states to take the primary role in approving and overseeing health plans. Lastly, they could improve the integrity of the program by double-checking that people who sign-up for coverage outside of the annual open enrollment period in fact qualify for these special enrollment periods, which cover life events like getting married or moving.
The Obama Administration is in the middle of making some of these changes for the enrollment year in 2018. Republicans should thank their lucky stars and welcome this effort because it will save them a headache. But the current Administration can’t fix everything by itself and certainly cannot adequately address the current instability of the insurance market or its further deterioration from the uncertainty surrounding the ACA repeal debate.
Beyond ensuring a functioning insurance market, Congress also needs to find ways to protect consumers with ongoing problems with coverage. These issues include fixing subsidies for coverage so they do not discriminate against moderate-income families (known as the family glitch), continuing and improving protection from high out-of-pocket costs, and better support for consumers making complex choices about their care and coverage.
President-elect Donald Trump and congressional Republicans are about to move from talking points to actual policy on health care. This was a transition they never expected to have to make. They will first need to repair the ACA to have any hope of a smooth repeal and replace that doesn’t send millions of Americans into paroxysms of anger and despair. Otherwise, Republicans face a huge political risk over the ACA. As Senator Patty Murray (D-WA) has said, “they break it, they buy it.”
David Kendall is the Senior Fellow for Health and Fiscal Policy at Third Way. David has focused on developing policy ideas to eliminate waste in health care, which is a prime obstacle to improving patient care. You can read his proposals here.