Concerned United States citizens want to know how likely is it that the Affordable Care Act will be repealed and replaced. Though speculative, the answer to the question is not an impossible one. The repeal of the Affordable Care Act, also known as ACA or Obamacare, is a subject that is under much scrutiny.
What is the Affordable Care Act?
The Patient Protection and Affordable Care Act is a statute that was promoted and signed into law by President Barack Obama, giving it the nickname Obamacare. In its current form, ACA requires that all United States citizens be covered under a healthcare plan. In order to accomplish this, ACA enacted the following:
- Health Insurance Overhaul
Health insurance companies are now mandated to offer insurance to anyone who applies regardless of sex or pre-existing conditions. Previously, insurance companies could deny women who may become pregnant. They could also deny anyone who had previously had illnesses or injuries that may lead to future medical needs. Further, insurance companies are now no longer able to drop coverage on individuals once they become ill. Lastly, the health insurance overhaul requires that insurance companies cover regular check-ups, vaccines and other preventative care procedures without a co-payment or deductible.
- Medicaid Expansion
This broadens the percentage of those who qualify for Medicaid. Not all states were required to enact this expansion, but those that did received additional government funding.
- Medicare Reductions
Those items that were deemed excessive have been cut from Medicare reimbursement.
- Children’s Benefits
The SCHIP enrollment program was simplified. Also, any child can now remain on their parent’s health insurance through age 26 regardless of dependent status.
- Employer Mandate
Any employer with 50 or more full-time employees must provide healthcare coverage to employees.
- Individual Mandate
All U.S. citizens must have proof of healthcare coverage or pay a penalty.
A Hot Button Issue
Why is the Affordable Care Act Repeal such a divisive issue? First, provisions and incentives aside, the act has been hotly contested and politicized since its inception. More money has been spent on negative ads than on positive ads, and general opinion about Obamacare is negative. According to an article in The Balance, three years after the ACA was approved 54 percent of Americans opposed it. What was their reasoning? Part of it stems from Republican tweaks to the act. One of these “tweaks” was the repeal of the tax imposed on people who did not have health insurance. People also opposed the act on the grounds that government should not have a role in health care. Of course, the feds have been involved with that area through Medicare and Medicaid provisions for years. In spite of this, however, there is a push on many fronts to get rid of Obamacare.
Why Repeal or Replace the Affordable Care Act?
The Kaiser Family Foundation has held public polling nearly every month since 2010, when Obamacare was first established. More than half of those polled hold positive views on ACA. The remainder have various reasons for wishing to repeal the law.
The primary reason those polled give for opposing Obamacare is the personal financial cost. The average increase in the cost of health insurance premiums went up by 25 percent from 2016 to 2017, according to the Department of Health and Human Services ASPE Research Brief. Other top reasons for opposing ACA are the belief that being compelled to purchase health insurance infringes on constitutional rights and that it is too complicated to understand.
Politicians often state that they wish to repeal Obamacare because the cost is too high for the government, employers, individuals, and insurance companies.
Here are the Pros
To make the issue easier to understand, here are the positive aspects of the Affordable Care Act in simple terms.
• It slows the rate of increase of healthcare costs. The website Health System Tracker says health care spending has risen steadily. From 2010 to 2019 that increase was about three to five percent a year, but in 2016 the cost increased to six percent. In 1970, the average per capita (for each unit of man, woman, child) spending on healthcare was under $2,000, or about $365 per person. In 2018, the per capita spending on healthcare averaged $11, 172.
• It guarantees coverage for things like mental health issues and addictions.
• It stresses preventative care and makes much of this free. This includes care for newborns and maternity care.
• It eliminates lifetime and yearly maximums. That means someone with an acute catastrophic diagnosis that required care costing hundreds of thousands of dollars in one year, for instance, would not lose their coverage.
• It creates insurance exchanges that ostensibly could help people choose coverage that is right for them.
• It allows children to stay on their parents’ plan through the age of 26.
• It mandates businesses with more than 50 employees to have health insurance. The most common business in the US is termed a “micro business” and has fewer than nine employees, so the majority of enterprises are not affected by this aspect.
• It ensures that people with pre-existing conditions can get coverage.
Here are the Cons
If there are positive aspects, there are also negative factors. Here are the main ones presented by those who oppose the ACA.
• From three to five million people lost their insurance as a result of the penalties imposed upon businesses. Many companies found it was cheaper to pay the penalty than provide the insurance. Additionally, many businesses found they could get better insurance at cheaper rates from state-run insurance exchanges.
• About 30 million people who never had employer-provided insurance had their private insurance policies cancelled. The policies did not meet the ACA mandates and revamping them would be too costly, so the insurance companies just discontinued the policies. Part of the reason the policies did not meet Obamacare standards is that the mandates required coverage for things that did not apply to most people like maternity care. Replacing those existing policies was very expensive for families.
• The act increased healthcare costs overall. This is because people received preventative care and conditions that had been unknown or ignored for a lifetime were diagnosed and treated.
• Although the ACA imposed a tax on people who did not have insurance, it also included a plethora of exemptions. Many people just didn’t have to comply.
• Levels for tax deductions for healthcare were raised. People did not qualify for deductions unless they amounted to 10 percent.
• Obamacare mandates a tax in 2022 of 40 percent on Cadillac policies. These are policies that cost $10,000 or more in premiums and cover high-risk patients. Insurance companies faced with that impending penalty are passing on those costs to their clients.
What Alternatives Have Been Presented
A few alternatives have been touted by Republican lawmakers. The most recent is the Graham-Cassidy bill, spearheaded by South Carolina’s Lindsey Graham and Louisiana’s Bill Cassidy. This bill provided block grant funding to states that are then able to spend that money as they see fit. The bill also removes the individual mandate, meaning people could once again choose not to have health insurance. It also removes the employer mandate and any money provided to states for Medicaid expansion.
Other alternatives have been brought before the Senate, but have failed. Notably was the Skinny Repeal, which would remove the individual mandate, the employer mandate for eight years, defund Planned Parenthood and offer contribution increases to individual Health Care Savings Accounts. Graham-Cassidy is the last effort to pass a repeal and replace law prior to the September 30 deadline.
Democratic Resistance to Obamacare
Republicans are not the only ones calling for reform or replacement of the Affordable Care Act. The National Review cited a Washington Post/ ABC News survey done not long after the act went into effect that said party support for the act only amounts to about half of Democrats polled. According to the article, 56 percent of those surveyed were “concerned about their personal health care under the new law.” One Democratic contender put it this way: “Obamacare is extremely problematic. It is expensive. It is a $500 billion cost [more] than we originally anticipated. It’s cutting into Medicare benefits, and it’s having companies lay off their employees because they are worried about the cost of it. That is extremely problematic. It needs an enormous fix.”
Repeal, Revamp or Reinforce?
So, what does all that mean in light of the election results? First, the Supreme Court is set to hear a challenge to the law.
The Challenge Suit
Forbes Magazine explains why the Supreme Court is considering a lawsuit against Obamacare. In 2017, the tax that was imposed on people who did not have healthcare was struck down. Immediately several Republican state attorneys sued saying that since the law has no mandate for penalty, it has no legal basis. Since the tax was a linchpin of the entire act, the lawyers postulated that the entire law, including the preexisting coverage portions, should be struck down.
Revamping and Reinforcing the Law
There are some people who want to see Obamacare revamped. It would certainly be easier and quicker than reinventing the whole system. Some of the things being considered are reinstating the tax mandate on non-insured people and limiting short-term insurance, expanding Medicaid and automatically enrolling people who are already receiving entitlements, and improving the ACA by raising financial assistance and adjusting the tax credits.
The Odds Against an Affordable Care Act Repeal
The question is, however, whether Obamacare will be repealed. Most people are betting against it. Why? Well, some people thought that the law would certainly be repealed because President Trump pushed the confirmation of a conservative judge to the Supreme Court following the death of Ruth Bader Ginsburg. The concern was that, with another conservative judge, the court would follow the President’s lead. However, from 2000 to 2018 all Supreme Court decisions were unanimous. Most still are. The judges simply do not vote along partisan lines.
Another reason people believe the law will not be repealed is that the challenge being considered (the tax mandate) really has nothing to do with the Medicaid expansion or many other provisions of the bill. Additionally, it is pointed out that the Republican-led senate has been fighting the war against Obamacare provisions for years. Some things like the forced funding of contraceptives by employers have been overturned, but the majority of challenges have been lost. If they can’t win on these minor issues, the argument goes, how can they expect to topple the institution?
What if it is Repealed?
If Obamacare is repealed and not replaced with an alternative, the government would see a huge increase in the deficit because the repeal would devastate Medicaid, according to Healthline.com. The federal government currently provides states with 90 percent of their Medicaid funding through the ACA provisions. If Obamacare is repealed, states will not receive that funding. Insurance companies could rescind coverage of people with pre-existing conditions and raise premiums. It is feasible that millions of people could lose their coverage. Hospitals and healthcare providers would be affected because they would have fewer patients with insurance. Premiums and deductibles could go up. Those are depressing forecasts.
Some people, however, support the repeal believing things will be fine. They say the federal government should not be involved in healthcare, and that if Obamacare was repealed the states would take over the insurance exchanges and Medicaid. They believe in a self-leveling effect in which the insurance companies would go back to offering more variety in coverage and individuals would have choices. The problem with the scenario, however, is Medicare. The healthcare system for those 65 and older is what moves the healthcare industry. Reforms should be made, including giving people an opportunity to simply refuse it. These changes would bring the free-market principle back into healthcare and should drive costs down.
No Fast Fix
The fact is that most Americans do not want Obamacare repealed, but they do want it fixed. Some of these changes could include changing the reimbursement rate between older and younger patients for insurance companies. Plainly said, it costs more to insure older people because they have more health issues.
The difference ratio used to set premiums right now is 3:1 because AARP successfully lobbied for that amount. If that ratio were changed to 5:1, older Americans could be given subsidies to help them meet their healthcare needs and younger people would benefit as well. Another change could be in allowing Medicare to negotiate the cost of prescription drugs and supplies. Additionally, there could be some type of guard against the merger of large hospital chains that give them monopolies in healthcare rates. There are many ideas on things that could be done to fix a broken system without “killing the patient.” The problem is that politics win over practicality in most cases.
The end of the fiscal year on September 30 is the last date Republicans can pass a repeal and replace law with only 50 votes. How likely is it that the Affordable Care Act will be repealed and replaced? Not very likely, at least not soon.