For now at least, the ACA is one of the relatively few areas in which President-elect Trump is in sync with virtually all of the Republican Party. He pledged to repeal every word of it, block grant Medicaid to the states, allow insurance companies to sell any policy anywhere, make health insurance premiums fully tax-deductible and expand the use of health savings accounts.
Of all the opportunities that have emerged for Republicans in the aftermath of the election, the chance to wipe out Obama’s biggest achievement is surely the sweetest. But the time to savor the taste is short, because there are some very tough dilemmas buried in the coming debate.
The first is that, tempting as it will be for the Republicans to repeal the ACA in its entirety, there are many features of the program that citizens have come to like. Twenty million more Americans have health insurance coverage now than before its passage in 2010. Health insurance costs have dropped for many families. The public has enthusiastically embraced the program’s guarantees of coverage for pre-existing conditions and for children under the age of 26.
Second, if the Republicans repeal the hated individual mandate, which requires everyone to have health insurance or pay a penalty, it’s going to be tough to provide insurance for anyone who wants it while keeping costs under control. Insurance exchanges aren’t enrolling enough younger, healthier individuals who can shoulder some of the costs. If the individual mandate is wiped out, this problem would get worse. The new program would likely attract just those who think they need insurance the most. That would drive costs up more for families in the replacement program, create big demands for more federal subsidies, or both.
The third dilemma lies in the proposal to give insurance companies flexibility to sell their plans in more places. The original plan was for the states to create exchanges that would give individuals a choice among insurance plans, but in some markets the major insurers are scaling back or withdrawing completely. In 2017, five states -- Alabama, Alaska, Oklahoma, South Carolina and Wyoming -- will have just one insurer for the program. Kaiser estimated that 19 percent of enrollees across the nation may be limited to just one plan, up sharply from 2 percent in 2016.
Trump wants to let insurance companies sell their health plans across state lines. The logic is that more flexibility will bring more competition, lower prices and happier consumers. But this would also bring federal regulatory changes in an arena that’s been a state function since the 1850s. There could be no bigger irony: The campaign to pull back federal regulations could insert the federal government more deeply into regulation of the states.
There’s a fourth dilemma, one that cuts to the core of state budgets: The expansion of the state-federal Medicaid program. That met huge resistance in many states with Republican governors, and 19 states opted out of Medicaid expansion. The result is a coverage gap that caught 3 million Americans, one of the big problems the ACA was designed to solve.
Fighting Medicaid expansion is important for Republican governors, not only for ideological reasons but also because they’re desperate to rein in the largest and fastest growing part of their budgets. But pushing back against Medicaid expansion and repealing the ACA could risk pushing 22 million Americans out of health insurance coverage, according to a Congressional Budget Office estimate. And that could boomerang into a bigger load on state budgets, as individuals without health insurance revert to more expensive health care in emergency rooms and fall back into the standard Medicaid program.
“The ACA as we know it would seem to be toast,” Larry Levitt, senior vice president at the Kaiser Family Foundation, told reporters after the election. That much seems certain. After having voted more than 60 times to repeal it, Republicans aren’t going to stop now that they control both the White House and Congress.
But there’s a difficult puzzle here. Will they replace the ACA with a plan that reaches very deeply into the choices of families and state governments, just in a different way? Or will they resolve the dilemmas by taking back a major benefit, which many families might find hard to live without? Repeal of the ACA will be at the very top of the new administration’s agenda. The choices it frames, however, may define the way Trump deals with some of the most important governance questions facing the country.
