Obamacare 101: Repair instead of repeal? Here’s what a smaller fix might look like
The basics of Obamacare. (Oct. 28, 2016)
With Senate Republicans struggling to find votes for sweeping legislation to roll back the Affordable Care Act, several GOP lawmakers have raised the prospect of a more limited bill — passed with help from Democrats — to stabilize health insurance markets around the country.
That may be heresy for conservative Republicans who’ve spent seven years demanding the full repeal of Obamacare, as the law is often called.
But most patient advocates, physician groups, hospitals and even many health insurers say more-targeted fixes to insurance marketplaces make more sense than the kind of far-reaching overhaul of government health programs that Republicans have been discussing.
Could such an approach work? Here’s a primer on what such legislation might look like and how it might get done.
Why do a more limited Obamacare ‘fix’?
For one thing, it would be politically easier. More-targeted legislation also wouldn’t threaten insurance protections for tens of millions of Americans.
The political debate over the 2010 healthcare law has focused for years on what has been happening to insurance marketplaces like HealthCare.gov, which were created by the law for Americans who don’t get health insurance through work.
For a variety of reasons, the marketplaces’ first several years have been rocky.
Insurers in many states struggled to figure out how much to charge for their plans and then raised premiums substantially when customers turned out to be sicker than they expected.
And as uncertainty over the future of the markets has intensified since President Trump’s election last year, several leading national insurers have decided to stop selling plans in some states, leaving consumers in some places with few if any health plans to choose from. Trump has called Obamacare a “disaster” and “dead.”
But the marketplaces — where about 10 million Americans currently get coverage — represent a very small fraction of the U.S. healthcare system.
By contrast, more than 70 million Americans rely on Medicaid and the related Children’s Health Insurance Plan, the government safety net plans for the poor.
Altering Medicaid, as proposed under the GOP plan, would be far more disruptive. And, as congressional Republicans are learning, it is much more controversial.
But isn’t Medicaid a big problem, too?
Many conservatives have long argued the federal government can’t afford to provide so much healthcare assistance to the poor.
But Medicaid has become a vital lifeline for tens of millions of Americans. Medicaid provides assistance to more than one in three U.S. children, protects millions of Americans with disabilities and is the largest funder of nursing home care for elderly Americans, in large part because Medicare does not cover nursing homes.
Obamacare’s Medicaid expansion, which made coverage available to working-age adults in many states, is credited with driving down the nation’s uninsured rate to the lowest levels ever recorded.
And a growing body of evidence shows it is improving low-income Americans’ access to needed medical care, reducing financial strains on families and improving health.
That is why Medicaid has been fiercely defended by patient groups, doctors, nurses, educators and even some Republican governors.
What would it take to stabilize insurance markets?
Probably not that much, actually.
There is widespread agreement that the federal government must first continue funding assistance through Obamacare to low-income consumers to help offset their co-pays and deductibles.
This aid — known as cost-sharing reduction, or CSR, payments – was included in the original law.
But the payments have become a political football as Republicans argued the aid can’t be provided without an appropriation by Congress. And Trump administration officials keep threatening to cut off the payments.
Many insurers say that would be devastating, forcing them to raise premiums by double digits.
Congress could simply put an end to that uncertainty by voting to appropriate the CSR money.
Secondly, most insurance industry officials and independent experts say the federal government must create a better system to protect insurers from big losses if they are hit with very costly patients.
Such reinsurance systems are used in other insurance marketplaces such as the Medicare Part D prescription drug program and are seen as critical to stabilizing markets.
Thirdly, current and former marketplace officials say, the federal government should aggressively market and advertise to get younger, healthier people to buy health plans on the marketplaces.
This strategy has helped Covered California, that state’s marketplace, which has not been beset by some of the problems in other markets.
Finally, many experts say, federal officials likely will have to come up with additional incentives to convince health insurers to offer plans in remote, rural areas.
Some Republicans have suggested that consumers in these areas could be allowed to buy health plans that don’t meet standards set out in the current law.
Would these steps cost more money?
But both the House and Senate GOP bills to roll back Obamacare included billions of dollars to stabilize markets over the next several years.
So could Congress put that aid in a smaller healthcare bill?
That’s still unclear.
Many congressional Republicans are reluctant to spend any more money on healthcare aid, especially for a law that most have sworn to repeal.
But polls indicate that Americans now hold congressional Republicans and the Trump administration responsible for the fate of the nation’s healthcare system, including the insurance marketplaces.
That suggests that there could be a political price to pay for the GOP if the markets are not stabilized.
At the same time, Senate Democrats have signaled a willingness to work with Republicans on marketplaces fixes if GOP lawmakers agree to drop their repeal campaign.
But major hurdles remain, including demands from many GOP lawmakers that at least some of Obamacare’s provisions be repealed, such as the highly unpopular mandate requiring Americans to have health insurance.
Rather than stabilizing markets, however, eliminating the insurance requirement could lead to even more turmoil, experts say.
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