The Takeaway: Why Replace Is So Hard
As the timeline for an Affordable Care Act (ACA) repeal bill continues to slip, many writers have written some variant of the idea that technical challenges with how to repeal the Individual Responsibility Requirement (IRR) without undermining the ban on pre-existing condition exclusions are a key stumbling block. Strictly speaking, this is not correct. It is not that Republicans cannot figure out an alternative to the IRR. Some combination of auto enrollment provisions and a late-enrollment penalty might be an adequate substitute given that the ACA requirement is somewhat porous to begin with.
There’s Still No Agreement…
The bigger problem is they cannot agree among themselves on with what or even whether to replace the ACA. Some want to continue down the original path of repeal now and replace later (and later could mean MUCH later–maybe never). Others want to wipe out most of the federal protections but essentially allow states that want to keep the ACA to ‘kinda sorta’ do that. Still others want to inject a “down payment on replace” into the initial repeal bill, which, of course, opens up fresh controversies over what should be in that down payment.
And controversy there will be. Based on previous policy statements and information on what House Republicans are vetting with the CBO, the policies that will likely emerge from the House include: high-risk pools; increased reliance on high deductible plans and Health Savings Accounts; changes to the ACA insurance tax credits that will make coverage less affordable for low-income people; and elimination of the guarantee of federal matching funds to states for Medicaid expenditures.
But There Are Dozens of Unanswered Questions
Implementing each of these policies requires many complex decisions. Consider high-risk pools. They were common before the ACA, but have never worked well in the past because inadequate benefits, high cost-sharing, high premiums, and enrollment caps have made them a poor vehicle for providing coverage to their primary market, which is composed of high-risk people with modest incomes. If Congress seeks to return to a reliance on pools, will they implement policies in an effort to overcome these historic shortcomings? For example, what benefits would be covered by high-risk pools? How much above market would premiums be for enrollees? Under what circumstances could insurers send people to the pool–would people need to be rejected first before they could access pool coverage? Would enough funding be available to keep premiums affordable, benefits robust and enrollment open, or would the new policy simply replay the shortcomings that have plagued past failed pools?
Capping Medicaid funds is, if anything, an even more complex undertaking. How would caps be calculated? How would they be adjusted over time? What, if anything, would states be allowed to do that they cannot do now to stay within the federal caps? Would the amount each state gets just be a reflection of past decisions made by states (which could disadvantage states that have been more aggressive at trying to reduce Medicaid spending), or will they reflect some more empirical standard? Would the federal matching formula remain essentially the same under the cap or would states be able to pull state dollars out of the system without losing federal funds, thereby increasing health system cuts? And, of course, there is the question of what will happen to the states that expanded Medicaid (and, for that matter, those that didn’t)?
People Don’t Like What’s On the Republicans’ Health Policy Menu
The common thread that unites all of these ideas is that they would increase costs and undermine access for people who are poorer and sicker. Just how badly would be determined by the other health policy debate that is roiling the ranks of Republicans: how much, if any, of the revenue raised by the ACA would remain to pay for benefits and how much is going to be spent on tax cuts for the wealthy. But it is no wonder that, with a policy menu that boils down to fewer people covered, higher cost-sharing, fewer jobs, more financial instability for health care providers and higher costs for state government, Republicans are not anxious to unveil their plans before the President’s Day recess. In fact, many are doing everything they can to avoid the questions that are coming at them from angry constituents. Some may hope, given that many people don’t know that the ACA and Obamacare are the same thing, they can confuse the public and escape accountability for undermining access and affordability. Those who don’t want to see our health care system take a giant step backwards will have to make sure that doesn’t happen.