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Repealing Obamacare with no replacement? Still a terrible idea

With Senate Republicans struggling to agree on a proposal to overhaul the Affordable Care Act, President Trump urged them Friday morning just to repeal the dang thing and worry about replacing it later.

That would be the same President Trump who insisted earlier this year that repealing with no plan to replace was unacceptable. As did Sen. Rand Paul (R-Ky.), by the way, who now is also in the repeal-first, ask-questions-later camp.

Trump was right the first time. So were the many other elected officials, industry executives and healthcare experts who persuaded Republicans hellbent on repealing Obamacare to consider what might happen to, you know, their constituents.

Conservative analyst Sally Pipes (who takes a back seat to no one when it comes to criticizing Obamacare), argued in January in the Washington Examiner that repealing the ACA without having a replacement in hand would be “disastrous,” in terms of both policy and politics. That’s because it would send the state marketplaces for individual insurance polices (i.e., the ones for people not covered by a large employer’s plan) into a death spiral, and the public would blame Republicans for it.

“Insurers would have little reason to continue offering coverage through the marketplaces if those marketplaces were to eventually disappear,” Pipes wrote. “Absent the individual mandate [to buy insurance], healthy consumers would have even less reason to buy coverage. So the few insurers that remained on the exchanges would have to hike premiums ever higher to cover the cost of insuring the sick folks who remained in the insurance pool.”

Maybe Trump believes the marketplaces are in such bad shape, people wouldn’t mind if the situation got worse. Insurers have withdrawn completely from the marketplaces in dozens of counties across the country, and many of those that are staying in are seeking sharp increases in premiums. Bear in mind, though, that insurers have blamed the Trump administration’s actions for at least some of the instability that is driving these withdrawals and premium hikes.

Regardless, it’s crazy to expect anyone who loses access to coverage next year to thank Trump and congressional Republicans for making the problems in the marketplaces worse, rather than simply trying to solve them.

And therein lies the challenge for the GOP when it comes to the “replace” half of the Obamacare equation. Senate Republicans’ divisions over Medicaid and the individual market are so fundamental, they may not be able to resolve them.

Conservatives want not simply to return Medicaid to its original purpose — covering poor children, pregnant women and disabled adults — but also to transform it from an entitlement program to a defined federal payout, shrinking the federal share of costs gradually over time. Moderate Republicans aren’t ready to give up on the ACA’s Medicaid expansion, which made every American adult earning less than 138% of the poverty line eligible. After all, the vast majority of the newly eligible are either disabled or working in low-paying jobs with no health benefits. Where will they go for care other than the emergency room, generating larger bills that are passed along to everyone with insurance?

As for the individual market, conservatives want to try to cut premiums by letting states eliminate the protections the ACA constructed for people with preexisting conditions. The point is to let insurers offer less costly but flimsier coverage to younger, healthier consumers in the individual market to entice them to buy insurance, improving the overall risk pool. But such a move would force those who need more comprehensive coverage, who have costly preexisting conditions or who work in risky occupations (and who aren’t covered by a large employer plan) into an insurance gulag, facing shockingly high premiums.

That’s a more extreme version of the pre-ACA status quo, and many states responded by creating “high risk pools” for people insurers didn’t want to cover. Those pools are widely regarded as a failure — they were so expensive, states started excluding coverage for some of the very conditions that were driving people into the high-risk pool, as well as limiting the number of people who’d get policies. Nevertheless, both the Senate and House GOP bills envision a return to those days, with billions of federal dollars to help keep the pools afloat for the time being.

Moderates aren’t so eager to let states abandon the ACA’s insurance reforms. They’d prefer to take other steps to shore up the Obamacare exchanges, such as extending subsidies to more moderate-income Americans. That’s a non-starter for conservatives.

If 50 Senate Republicans can’t rally around a consensus proposal, the only way Republicans will have left to amend the ACA will be to work with Democrats, who have no interest in gutting it.

How can Republicans maintain leverage over Democrats while asking for their support? Conservatives — and Trump, evidently — believe the best approach is to blow up the ACA, either now or at some date, which would force Democrats to accept major changes. Otherwise, Democrats can protect the status quo just by saying “no” to everything.

But Democrats need Congress to act too, given the deteriorating conditions in some of the exchanges. So they have more incentive to cut a deal now than they did two years ago.

The arguments against repealing Obamacare without a plan to replace it are just as strong today as they were in January. Even if you don’t like what’s happening in the markets, you shouldn’t want to increase the population of uninsured Americans by 18 million in a single year, as the Congressional Budget Office has predicted a pure repeal would cause. And you especially wouldn’t want to do that in 2018, when control of the House and Senate are up for grabs. Would you?

jon.healey@latimes.com

Twitter: @jcahealey

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