Repeal without Replacing: A Health Care Disaster

Tuesday, July 18, 2017 at 6:13 PM by

A month or two ago, President Trump described the House plan to repeal and replace the Affordable Care Act (ACA) as being “mean,” and he was right. Yet today he endorsed a far meaner approach – repealing the ACA without a replacement plan – even though he was the one who shot down that idea when Congress was considering it back in January, and despite the fact that a wealth of data demonstrate what a disaster that approach would be.

Senator McConnell is trying to breathe life into the strategy of repealing the ACA without first coming up with a replacement. That became his fallback plan today after it became apparent late yesterday that there aren’t enough votes to even begin the floor debate on the extremely unpopular “repeal and replace” plan, which a small group of Senators spent the last couple of months developing behind closed doors.

President Trump endorsed the new strategy, but some of the other Republican lawmakers who opposed the idea early this year – and whose positions are less fluid than Trump’s – have said they are still unwilling to wipe away the current law without having a replacement plan. Nevertheless, McConnell indicated today that he plans to call for a vote “early next week” on a measure to initiate floor debate on a bill that some are referring to as “repeal without replace.”

ACA repeal

An analysis issued in December of last year by the Urban Institute estimated the impact in each state of a bill to repeal most of the ACA (i.e., the parts that can be repealed with 50 Senate votes, rather than 60).  As the previous bar graph indicates, they projected that the repeal legislation would cause 431,000 more Wisconsinites to be uninsured in 2019 – an increase of 144%.

The Urban Institute analysis estimated that by 2019 a repeal of the ACA would reduce federal Medicaid funding for Wisconsin by $157 million annually and premium tax credits by $837 million per year.  I think the biggest reason for the cut in Medicaid funding is that the proposed bill would reduce the federal share of spending for the Children’s Health Insurance Program by 23 percentage points.  That would create a major problem for the current Wisconsin budget.

ACA Repeal - CBPP charts

A report issued by the Congressional Budget Office (CBO) in January estimates the national effects of the repeal bill, and their figures are very similar to the Urban Institute’s projections. The following portions of the CBO estimates – which are illustrated in the previous graphic – make an extremely compelling case against the ACA repeal proposal that McConnell is trying to resurrect:

  • The number of uninsured Americans would surge by 18 million next year, and would more than double by 2026 – an increase of 32 million more than under the ACA.
  • Premiums in the individual insurance market would be 20-25% higher next year than they would be under current law, and the premium increases would grow to 50% after three years and 100% by 2026. That increase would be driven by sharply reduced participation after the marketplace subsidies are eliminated, which would result in a sharp reduction in the number of healthy people who enroll – thereby dramatically increasing average costs for the remaining participants.
  • The individual insurance market would pretty quickly collapse. Within 3 years, about half of the US population would live in areas where no insurers continue to participate in the individual market, and by 2026 three-quarters of Americans would live in areas without any individual market insurer.

Senators should vote Thursday against the motion to take up the repeal (without replace) bill, and they should oppose any ACA replacement that causes millions of people to lose coverage, ends Medicaid as we know it, or makes coverage unaffordable for moderate-income consumers. Instead, they should take advantage of this opportunity to start from scratch, open up the process, and develop a bipartisan bill that leaves Medicaid aside and focuses on making real improvements to marketplace stability and affordability.

Jon Peacock

Categories: Blog, federal issues, HEALTH & HUMAN SERVICES, health care reform | Comments Off on Repeal without Replacing: A Health Care Disaster

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