Why Repealing Obamacare Is So Hard
Republicans are promising to make good on their one of their biggest 2016 campaign platforms, the repeal and replace of Obamacare. But even as the Senate has taken the first procedural steps to lay the groundwork for the repeal, it remains very unclear how the repeal will proceed, as well as how they intend to replace it.
Since the Senate does not have a 60 member filibuster proof majority, they plan to repeal President Obama’s signature legislation using budget reconciliation, which requires only a simple majority vote (the GOP has a 52 member majority in the Senate). The sticky part, however, is that the only elements of the Affordable Recovery Act that can be reversed via budget reconciliation are those that are directed at federal spending and revenues; namely, only Obamacare penalties, subsidies, and taxes are a given to go away.
Far beyond that, Obamacare fundamentally changed the insurance market. For example, people with pre-existing conditions cannot be denied coverage, there are no lifetime caps on payouts for people stricken with serious chronic illness or injury, and children may remain on their parent’s health care plan until they are 26. These are generally very popular aspects of the health care law, especially considering the Kaiser Family Foundation’s study that revealed that 27% of American adults have health conditions that would deem them uninsurable under former private insurance practices. Says Sabrina Corlette, research professor at the Georgetown University Health Policy Institute, “The best way to offer an affordable plan is not to take sick people.”
This big question remains, how can these popular aspects of the law remain without the individual mandate for healthier people to sign up for coverage in order to cover the costs of the sick? What’s more, what about the 15 – 20 million people who joined the insurance market that may not have pre-existing conditions or lifetime caps, but are covered through subsidies? Will this large number of people simply be relegated to the uninsured just as they were before the heath care law was enacted?
Republicans are generally very vague on how they would address these concerns when they replace the health care law. Some point to increased competition across state lines by lifting state regulatory restrictions as a means to drive lower cost premiums. However, competition alone will not keep private insurance companies from refusing to cover those with pre-existing conditions or enacting lifetime caps on care, even if Democrats were willing to reverse these aspects of the law (which budget reconciliation would not). It also does not address how the GOP intends to attract younger, healthy people into the health care market to offset the costs of the health care of older people more prone to illness or those with preexisting conditions.
In their current reconciliation plan, Republicans are realizing that they are going to have significant challenges in addressing these concerns while fulfilling their promise to not only repeal Obamacare, but replace with a better alternative.
This may be the reason that Republicans are already tempering the expectations of a replacement bill. Stated Senate Majority Leader Mitch McConnell this past Monday, “We’ll continue working this week to pass the legislative tools necessary to begin clearing the way for repeal, and then, a different way forward that will lower costs and increase choices from where they are now. There’s no quick fix to undoing the damage created by this broken and complex law, and repeal is just the first step in that process.”