Experts: Unraveling Obamacare Will Be Long, Contentious Process
You won’t see any immediate or definite decisions on the fate of the Affordable Care Act (ACA), which is destined for major changes after the election of Donald J. Trump and the preservation of Republican majorities in both houses of Congress. Instead, any repeal legislation is likely to include a delayed implementation date while Republicans rush to assemble an alternative law that would stabilize the insurance market while mitigating the potential loss of coverage for millions of newly insured patients.
This potential delay already has major insurance companies worried, and many are likely to pull out of the subsidized insurance marketplaces established by the ACA unless Republicans guarantee that federal dollars will keep flowing for subsidies. Already, UnitedHealth and Aetna have terminated some of the less profitable plans they offered through the subsidized marketplaces, while other insurers have sharply increased premiums to keep their plans afloat.
“The best approach to keep insurance affordable and markets stable would be to fund temporary, transitional programs,” writes Marilyn Tavenner, president and CEO of America’s Health Insurance Plans (AHIP), in an op-ed in The Washington Post. “These would include maintaining subsidies for low and moderate-income individuals to purchase insurance and financial help for plans that enroll high-cost individuals, through at least Jan. 1, 2019.”
Market stability is key
If the Republican Congress forces an immediately effective repeal bill into law using the reconciliation process, which would prevent a Democratic filibuster, the impact would be wide-ranging. “In the midst of an already established plan year, significant market disruption would occur,” analysts at the non-partisan Urban Institute wrote in a study released Dec. 6. “Some people would stop paying premiums, and insurers would suffer substantial financial losses (about $3 billion); the number of uninsured would increase right away (by 4.3 million people); at least some insurers would leave the non-group market mid-year; and consumers would be harmed financially.”
The question of how to keep the insurance markets stable during the transition to an ACA replacement will be difficult for Republicans to answer, even with the GOP in control of the White House and Congress, says Jack Hoadley, research professor at the Georgetown Health Policy Institute in Washington and a former HHS official during the transition to George W. Bush’s administration. “The working assumption seems to be that we’ll continue to operate [ACA] marketplaces for two or three more years, and to do that means continuing to spend federal dollars on Obamacare.”
Essentially, Republicans must find a way to keep the ACA’s components funded during the next few years, until the effective date of the repeal legislation and their replacement. This presents immediate problems for Republicans, such as an ongoing lawsuit filed by House Republicans that claimed the Obama administration illegally issued payments to insurance companies to subsidize costs for low-income enrollees because the money wasn’t appropriated via Congress. A U.S. District Court judge had recently ruled in favor of House Republicans, but if the payments are stopped during the ACA’s repeal process, the individual insurance market would likely capsize overnight. Now, Republicans are in the “awkward position” of asking the courts to delay further action on their own lawsuit, Hoadley says.
Dissension in the ranks
Such details – of which there will be many when overturning a law the size of the ACA – could cause splits within the Republican camp, Hoadley says. Some Republicans may refuse to put more dollars into fixing what they see as a failed system, while others may insist on propping up the ACA until their alternative program is signed into law. “You could envision more conservative members going one way and more moderate members going the other,” Hoadley says.
There could also be divisions between President-elect Trump and Congressional Republicans. In a post-election interview, Trump indicated a preference for preserving the most popular provisions of the ACA, such as its requirement that insurers cover patients with pre-existing conditions and children ages 26 and under who live at home. These provisions are funded in part by the ACA’s individual mandate, which is often seen as the law’s most controversial component. Without it, and the influx of dollars from younger and healthier Americans, the popular features Trump wants to keep will swell the federal deficit, which Republican lawmakers have repeatedly pledged to reduce.
“There is no question that this funding is contentious,” acknowledges Tavenner, who also served as CMS administrator from 2011 to 2015, in her op-ed. “But it is essential to deliver stable plan options and predictable premiums until a replacement plan can be designed, developed and deployed.”
‘See-saw’ changes possible
At this point, it’s too early to make any definitive predictions about the fate of the ACA, but Hoadley expects the picture to clear up significantly over the next two months. There could be “big, see-saw changes between now and Jan. 20, and then next year when the next round of proposed rules go out,” Hoadley says.
— Grant Huang, CPC, CPMA (email@example.com). The author is Director of Content at DoctorsManagement.