Affordable Care Act repeal plans threaten chaos for Oklahomans’ health care

Repealing the Affordable Care Act has been a hallmark of Republican platforms since the signature health care reform law passed in 2010. Now, with the GOP holding both houses of Congress as well as the White House, efforts have already begun for Congress to make good on its promises to get rid of the Affordable Care Act (ACA): a resolution filed in the first full day of Congress of 2017 formally kick-started the process, and it will likely be voted on late tonight or early tomorrow. Although significant uncertainty surrounds both repeal and whatever might come after, we have some idea of what both could look like – and what they mean for Oklahoma.

How repeal could happen

Any ACA repeal would likely happen through a process known as budget reconciliation, which can be approved with a bare majority rather than needing 60 votes to get past a Senate filibuster. Reconciliation bills are limited to federal budget matters and can pass with a simple majority, which Republicans hold in both houses of Congress. Because reconciliation deals only with the budget, this would only partially repeal the ACA. The reconciliation process began with a resolution filed on January 3. That resolution will likely be voted on late tonight or early tomorrow.

However, even partial repeal will dismantle the primary components of the ACA. Partial repeal could include the following:

• Ending the tax penalty levied for failing to obtain insurance coverage, known as the individual mandate;
• Stopping tax credits used to make coverage on Healthcare.gov more affordable; 
• Ceasing the generous federal match to pay for expansion of Medicaid to everyone below the poverty line.

If any of the above takes effect without a replacement plan immediately in place, the effects would be catastrophic, with at least 20 million Americans instantly uninsured. Since lawmakers will want to avoid this, they could delay cutting off funding for exchange subsidies and Medicaid expansion by several months or years, which lawmakers say would give them time to craft a replacement.

However, this delay won’t be enough to prevent health insurance upheavals following a partial repeal. With the individual mandate halted, healthier enrollees could drop insurance, leaving a less-healthy insured population and prompting premium spikes. With an expiration date in place, insurers taking losses on Healthcare.gov in hopes of legislative fixes would have no reason to remain and will exit marketplaces. With no individual mandate and a collapsing non-group market, more than 30 million Americans could lose coverage by 2019, including more than 300,000 Oklahomans – many more than the total that gained coverage through the ACA. And when health insurance from Healthcare.gov evaporates, so too will the premium tax credits that more than 100,000 Oklahomans used to pay for coverage — more than $400 million in credits will be taken from Oklahoma families. 

As a result of the spike in the uninsured rate, uncompensated care costs are expected to spike by $1.1 trillion over the following decade, destabilizing safety net health care providers such as rural hospitals and charity clinics. 

What replacement might look like

Replacing the ACA faces two primary barriers. The first is that any comprehensive replacement will require 60 votes in the Senate and therefore cooperation from both Republican members and some Democrats. The second is that as of now, lawmakers are apparently far from consensus on a replacement. However, replacement proposals give us some idea of what a plan might include. By and large, they would make health coverage more attractive to enrollees who are younger, healthier, and wealthier – and less so for those who are older, have health conditions, or have low incomes.

• The stated goal of Congressional Republicans is “universal access” to health care. This contrasts with the Affordable Care Act’s aim of “universal coverage,” in which everyone has health insurance that covers most health care conditions, although out-of-pocket responsibility may vary. Under “universal access,” individuals may not be able to afford meaningful insurance coverage, and insurance companies could refuse to cover items like prescription drugs or hospitalizations.
• Several GOP plans would offer tax credits to offset health insurance premiums. However, in most plans, the tax credits would be smaller than the ACA’s subsidies, leaving consumers to pay a greater share of premiums than they do now.
• Multiple replacement plans would expand use of health savings accounts (HSAs) for enrollees to pay for health coverage. However, HSAs are most useful to high-income earners, not those who need the most help paying for health care.
• Rather than use an individual mandate to induce Americans to carry health coverage, insurers would able to penalize enrollees who had previously not carried coverage or whose coverage had lapsed by charging higher premiums or providing skimpier coverage.
• The ACA prohibits insurers from refusing to cover preexisting conditions, charging more to enrollees with preexisting conditions, or capping coverage for those conditions. Although President-elect Trump and GOP leadership say they would keep the requirement on insurers to cover preexisting conditions, several proposed plans would allow insurers to charge more for them, particularly if a patient failed to maintain continuous coverage. This could make coverage very costly for the one in three Oklahomans with a preexisting condition that could have been used to deny them coverage prior to the ACA.
• Although some GOP replacement plans suggest using high-risk pools to keep costs down for Americans with serious health problems, most of these plans do not fund high-risk pools at functional levels.

The road ahead

The uncertainty about what the Trump administration will do compounds the uncertainty in Congress. Spokespeople say his first day in office will include executive action regarding the ACA, although they haven’t released any details, and there are indications the President-elect himself is unclear on what repeal and replace will entail. Trump spokespeople have said that no one will lose coverage from repeal, although his Congressional counterparts suggest otherwise. Repealing the ACA would grow the deficit and eliminate jobs, neither of which are typical Republican objectives. In addition, significant fractures over how, when, and even whether to repeal and/or replace the ACA have emerged among Republican members and interest groups. Most Americans want any repeal to include replacement, and even Trump voters object to many GOP replacement options.

If you think this sounds like chaos, you’re right – but will it be enough to stop repeal? It’s too soon to say, but it is calling into question whether Congressional Republicans will be able to deliver on a fundamental campaign promise. In the meantime, Democrats, health care advocacy groups, and the outgoing Obama administration are digging in.

The particulars of repeal and replace will undoubtedly shift over the days and weeks ahead. Regardless, after more than five dozen symbolic repeal votes, Congressional leadership finally have the opportunity to make good on a fundamental party objective, but they may not be able to. In this case, it appears that the dog has caught the car — which may not end well for either.