The Coming Obamacare Fight

In a couple weeks Donald Trump will be sworn in as President. No doubt, thousands of people will descend on Washington to make their voices heard. But at the end of the day the red baseball caps will be hung up, the protest signs will be thrown away, and the new administration will be shuttled off to the inaugural balls. And when the sun rises, the fight over the Affordable Care Act (ACA), or Obamacare, will be officially on the clock.

Trump’s transition officials have made it clear that repealing the ACA is their first priority. And when the 115th Congress started on Tuesday, Utah Senator Mike Enzi wasted no time introducing a resolution to repeal Obamacare.

Enzi’s resolution is the first part of a tried-and-tested legislative strategy. Republicans in Congress will use reconciliation, a somewhat complicated process, to pass a resolution. This will set the framework for repeal and allow the repeal measure to get to Trump’s desk in a fairly swift manner. While the Democratic Party won’t let this happen without a fight, they will essentially be limited to  a massive PR campaign.

Mike Pence has made clear that this could all unfold by February. If so, this means that after years of Republicans campaigning against the ACA’s failures, the law we know won’t see a seventh birthday.

So in light of the rhetorical bloodbath to come, I thought I would share some thoughts about what an ACA repeal will mean.

The ACA’s Impact: Coverage vs. Care

It is important to have a sense of proportion when evaluating the doomsday scenarios which will be painted with vivid color over an ACA repeal.

First of all, the ACA has cost and will continue to cost taxpayers and consumers billions of dollars if Congress were to keep it. Since the law’s passage, employer-based premiums have risen by 32%. Individual plans have risen by 41% since 2013. The evidence that the ACA caused this, to borrow from Brian Blase, is overwhelming.

Premiums, however, aren’t the only expenses that have skyrocketed. Since 2007, deductibles have risen six times faster than wages according to The Wall Street Journal. These high deductibles prevent millions of people from accessing care, rendering their ACA coverage “all but useless” in the words of The New York Times. For example, Stephanie Hattiner and her husband face a deductible of $13,000 through their ACA plan. She told Bloomberg,

““I’m hoping we’ll be able to get something that actually has benefits, so I don’t have to be afraid to go to the doctor for fear of paying hundreds of dollars I can’t afford,” said Haltinner, who lives in Farmington, Utah and works part time while going to school.”

It’s no wonder, then, that a recent Commonwealth Fund study found that 4 out of 10 adults covered through Obamacare aren’t confident they can afford coverage.

When confronted on the costs, defenders of the law claim that the ACA has helped slow the rise of premiums. HHS Secretary Sylvia Burwell, Jonathan Gruber, Chuck Schumer, Nancy Pelosi, and President Obama himself have used this line to tout the law as cost-effective.  

This idea is based on a statistic from Health and Human Services (HHS) that the ACA has reduced the rate of premium growth. Chris Conover of Duke University points out that the HHS’s figure is entirely misleading and arbitrary.The decline in premium growth happened 5 years before the ACA was passed. HHS’s statistic uses the 10 years prior to the ACA’s passage in 2010 in order to conceal this.

The ACA hasn’t reduced costs. It’s only exacerbated the problem by creating a system of more rigid conformity.

Another doomsday scenario is the idea that 20 million people will be left out in the cold and have their health care ripped out of their hands.

At a very basic level, the statistic of 20 million people gaining coverage through Obamacare does not distinguish between those who had insurance before the law and those who gained it after for the first time. Furthermore, the Congressional Budget Office (CBO) estimated in 2014 that the number of individuals who would have gained coverage in the private insurance market would have been higher without the ACA.

But at a more complex level, repealing the ACA will mean that millions of individuals will no longer be forced to buy expensive insurance. Instead, they may choose how to use their money according to their own needs and desires.  

A repeal of the burdensome regulations on insurers would also free up the market and allow for more choice. This would, no doubt, come as a welcome relief to 974 counties across the country that will only have one insurer to choose from in 2017. As President Obama himself has acknowledged, increased choice and competition are key to lowering prices and increasing quality.

And let’s not pass the buck about insurance loss and market chaos. Don’t expect to hear, for example, that 1.4 million people are expected to lose coverage because of the ACA this year alone. Such has been the case since the ACA’s passage for millions who have been forced out of their plans to a more limited and expensive set of options.

Replace?

While many of the scenarios the Obama administration will continue to paint are certainly overblown and ignore the ACA’s damage, it is true that some people will lose their insurance coverage due to repeal. Whether or not they can find affordable, quality care (as oppose to just coverage) will depend on what reforms are passed in the replace part of repeal and replace.

So what reforms should be enacted to make access easier for millions of Americans than before the ACA? To answer that question, stay tuned for the next blog post on the central problems with the United States’ health care system.

-Chris Medrano

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