If there weren't so much at stake, one would be amused at the spectacle of Republican politicians writhing as they try to make good on their ideological promise to "repeal and replace" Obamacare without ruining the lives of millions of their own constituents.
In the few short weeks since the GOP added control of the White House to its existing control of both houses of Congress, the GOP has been grappling with the recognition that taking potshots at the Affordable Care Act and weakening its consumer protection provisions is no longer just a parlor game, but actions that could have genuine consequences.
Not only are they conceding that conjuring up a replacement for the ACA will take much longer than they promised — years, even — but they're also talking about reinstating provisions of the law that they undermined during their six-year campaign to hobble it. They're forced to acknowledge that America's pre-ACA system of health insurance for individuals was so awful that they can't justify returning to it.
Many proposals the GOP has offered as replacements end up looking very much like Obamacare, though with more costs shifted to consumers. A repeal bill passed by the Republican House in February would have eliminated the mandate that all individuals have coverage, the subsidies that made it affordable, and $346 billion in taxes (over 10 years) that funded Obamacare but hit wealthy taxpayers. This would certainly have destroyed the ACA, but it was easy for the GOP to pass, because it was 100% certain to be vetoed by President Obama. Such symbolic votes can't be taken any more.
Let's examine some aspects of the new reality.
1. There aren't actually many alternatives to the ACA mandates. The one ACA provision that shows up in every GOP proposal calls for protection of customers with pre-existing medical conditions. This was a prime category of insurer abuse before the ACA: Individuals with injury or illness in their histories were routinely denied coverage, or offered plans with stratospheric premiums or that excluded their condition. Insurers routinely investigated customers who fell sick, looking for undisclosed past conditions that justified rescinding the policies just when they were needed.
What Republicans have discovered is that retaining the ban on exclusion for pre-existing conditions means retaining other provisions that they've campaigned against. The only way to require insurers to cover all applicants regardless of health status is to force everybody into the pool, healthy or sick, young or old. The ACA did so via the individual mandate, which imposed a tax or fee on individuals without coverage.
The mandate is immensely unpopular, but necessary medicine often is. GOP alternative plans use a different means to achieve the same end: "continuous coverage," meaning that pre-existing conditions must be covered without premium increases if the consumer has maintained insurance without a significant lapse. Some healthcare wonks, including Andrew Sprung of Xpostfactoid, argue that there isn't enough difference in these two coercive methods for ACA supporters to draw a line in the sand over, but that's questionable. By its nature, a continuous coverage rule is less flexible than the individual mandate. It overlooks the fact that the main reason for coverage lapses is that customers don't have the money for insurance. That makes adequate subsidies for the purchase of insurance even more important — but the GOP plans typically cut back on subsidies, as Sprung himself has reported: He calculates that the repeal-and-replace proposal from Rep. Tom Price (R-Ga.), who Donald Trump has nominated as secretary of Health and Human Services, would cut the subsidy effectively in half.
2. Repeal-and-delay will drive insurers out of the system, raising prices. Some Republicans are hoping to finesse their dilemma by repealing as much of the ACA as they can without inspiring a Democratic filibuster in the Senate, but deferring its effectiveness for several years. The idea is to make good on their campaign promise, but give themselves time to craft a workable solution.
"We're talking about a three-year transition now that we actually have a president who's likely to sign the repeal into the law," Senate Majority Whip John Cornyn (R-Texas) told Politico. "People are being understandably cautious, to make sure nobody's dropped through the cracks."
The problem with this is that it injects uncertainty into the survival of the individual insurance marketplaces. Insurance companies hate that. Big insurers who have stayed in the market say they've done so because they're confident that the insurance pool will eventually stabilize, so that the risk profile of the customer pool and therefore the proper level of premiums will become more predictable and therefore profitable.
Putting off replacement for three years or even more eliminates that certainty. There will be little reason for the remaining insurers not to follow such big firms as Aetna and UnitedHealth out of the exchanges. That means less competition and higher prices. If the GOP really wanted to subject the exchanges to a "death spiral" of ever-rising premiums and therefore an ever-sicker customer base, this is the way to do it.
Consequently, congressional Republicans are talking with the insurance lobby about ways to moderate the risk, according to The Hill. That brings us to the next point.
3. Past GOP actions undermining the ACA are coming home to roost. What's most telling about these discussions is that they involve restoring a risk management program that was written into the Affordable Care Act, but eviscerated by the Republican Congress in 2014. Under the program, which aimed to stabilize insurance premiums in the first few years of the ACA, insurers that set prices more than 3% below a set target would get a reimbursement from the government, and those that overpriced by the same margin would pay some of the windfall to the government. If the two sides didn't net out exactly, the difference would be made up from government funds.
Congress approved a change sponsored by Sen. Marco Rubio (R-Fla.) prohibiting the use of government funds for the purpose. The result was that health plans due a payment were shortchanged; in 2014 they got only 12.6 cents on the dollar of what they're owed -- $362 million to cover claims of $2.87 billion. Eventually they'd get paid, but no one was sure when. In the event, several co-op plans needing money to bridge their early, financially shaky years had to shut down instead, hurting tens of thousands of their enrollees.
Rubio has been inordinately proud of this mindless act of vandalism, like a puppy seeking praise for soiling the carpet. He even built his presidential campaign around his achievement of having done "significant damage to Obamacare." He plainly figured there was no risk to him: Any chaos that resulted would be blamed on Obamacare itself, not on GOP machinations. He was correct.
As we pointed out earlier, Rubio's real victims weren't insurance companies, but their customers. In other words: consumers, who lost the benefits of competition among plans because some of the most popular new plans were rendered insolvent because the government couldn't provide their promised reimbursements. Nice work, Mario.
And now the Republicans are talking about putting the program back in. This is what happens when you actually have to care about the consequences of your vandalism.
4. The neediest constituents are most vulnerable to repeal proposals. Those receiving insurance through the ACA exchanges and its expansion of Medicaid are disproportionately lower income. That creates a quandary for Republican officeholders, especially in red states in the Southeast and Midwest, which are hotbeds of Obamacare hostility in Congress.
A survey just released by the Kaiser Family Foundation and reported by my colleague David Lauter shows that big Republican states are heavily dependent on Obamacare subsidies. Rubio's home state of Florida, for example, is home to 1.4 million subsidized enrollees receiving an average $305 a month for a total of $5.2 billion a year, the largest total of any state. Cornyn's Texas is home to 913,000 residents receiving an average $271 a month, or $3 billion a year in all.
Blue states aren't immune. California reports more than 1.2 million subsidized insurance buyers, receiving an average $309 a month, or $4.6 billion a year. Reliance on these subsidies is especially heavy in counties such as Kern, where 93% of the 17,900 enrollees receive subsidies averaging $447 per month, and Tulare, where 96% of the 10,880 enrollees are subsidized to the tune of $592 per month. These happen to be in the congressional district of House Majority Leader Kevin McCarthy, one of the leaders of the Obamacare repeal movement. As we mentioned recently, residents of McCarthy's district also are heavily dependent on Medi-Cal, the state's version of Medicaid, which is also a Republican target. If McCarthy and his colleagues screw up healthcare, they will have a lot of explaining to do. So far, their ideas tend to point to more chaos and more costs for consumers, not to improvement.
Healthcare is complicated, which is why it took years of negotiating to cobble the Affordable Care Act into shape. Complaining about its shortcomings is easy, as the GOP has shown over the last six years. Scrapping it and coming up with something better will be very, very hard.