Seven years after its passage, the Affordable Care Act (widely known as Obamacare), has suffered its share of abuse. Yet after hundreds of bills to repeal it, two high-profile Supreme Court cases, and countless hours of strategizing in Washington and in state capitols across the country, it just won’t die.
Nor, however, will the Republicans ever quit trying to kill it.
The latest legislation aiming to “repeal and replace” Obamacare met its fate on March 24 when it was pulled from consideration hours before a scheduled vote. While Donald Trump had given his blessing to the Republican bill – the American Health Care Act, no less – it was largely crafted by Republican congressional leaders. Nevertheless, the bill alienated the House Freedom Caucus, a key voting bloc, because it did not go far enough at gutting Obamacare’s tax subsidies for the purchase of health insurance and the regulations that require minimum healthcare benefits for consumers in the individual marketplace.
House leadership did not give up, however. After the scuttled vote, they continued to hammer out a legislative compromise with members of the Freedom Caucus, resulting in a floor amendment that allowed states to waive key regulatory provisions of the Affordable Care Act, including those that protected individuals with pre-existing conditions from discrimination by insurers. Nevertheless, the bill’s future is uncertain. Given the popularity of the ACA’s consumer protections, and considering that the American Health Care Act would lead to coverage losses for 24 million Americans, the bill has alienated Republican moderates and, even in the event a House victory, would be unlikely to make it through the Senate.
Despite this ongoing attempt to revive “repeal and replace,” many pundits think the Trump administration and congressional Republicans should leave Obamacare alone and move on to other issues. Conservative commentator David Frum recently wrote that Obamacare is now “accepted by enough voters – and especially by enough Republican voters – to render impossible the seven-year Republican vision of removing that coverage from those who have gained it under the Affordable Care Act.” By the start of 2017, the uninsured rate had dropped below 10%, compared to over 15% in 2009.
Should Republicans in Congress fail to pass legislation in the short run, Trump may attempt to quietly use the executive branch to soften the ground for repeal. There are several ways in which he could do this. First, the administration could eliminate the cost-sharing reduction payments through which, according to the New York Times, the ACA “pays [subsidies to] health insurers to offer plans with lower deductibles and out-of-pocket expenses to about seven million lower-income and middle-class people”. Because this subsidy program is central to the ACA and the health-insurance marketplaces it created in the states, such a move would destabilize those marketplaces and likely lead insurers to pull out of those marketplaces, seriously weakening this component of the reform.
Second, regarding the exchanges, the administration could change the rules of health insurance markets currently in place so that at least some states would be left with no insurers to choose from to populate the health insurance exchanges.
Third, the administration could simply stop enforcing the provision in the ACA that requires individuals and small businesses to pay a penalty if they do not buy insurance. Soon after coming into office Trump signed an executive order giving executive agencies more discretion in enforcing the ACA. It was unclear what this meant, but one possibility is that the IRS will take a softer line in its policing of the mandate provision. In turn, this would undermine one of the mechanisms through which the ACA attempted to collectivize the insurance markets.
While Trump pitched the Republican bill as a solution to high premiums and out-of-pocket costs experienced by many health care consumers, few Republicans in the House were interested in solving these problems. Instead, they saw “repeal and replace” as an opportunity to cut taxes and entitlement spending. Unsurprisingly, the bill would have made Obamacare worse, not better.
That doesn’t mean the status quo is sustainable. In its final form, Obamacare ended up being a giveaway to the insurance and pharmaceutical industries in the United States. There is little truly effective cost control built into the act and there is no public alternative to private insurance that could act as a release valve when (not if) private insurers price gouge or resort to questionable tactics to avoid taking on high-cost subscribers even though they are formally required to do so under the law.
These are challenging policy problems. But there is little evidence that Republicans care about solving them.
Greg Marchildon is Professor and Ontario Research Chair in Health Policy and System Design at the University of Toronto and a member of the Broadbent Institute board. Daniel Bėland is Professor and Canada Research Chair in Public Policy at the Johnson-Shoyama Graduate School of Public Policy at the University of Saskatchewan. Philip Rocco is Assistant Professor of Political Science at Marquette University in Milwaukee, Wisconsin. Alex Waddan is Associate Professor in American Politics and American Foreign Policy at the University of Leicester in the United Kingdom.
Image: via Obama White House Archive, CC 3.0 BY US
