Navigating ACA Repeal/Replace Efforts

Associate Professor of Law Erin C. Fuse Brown’s research and expertise include health care prices, medical billing, the Affordable Care Act, health care competition and regulation, surprise medical bills, consumer protections for patients and genetic research and privacy. She is one of five new casebook authors for the 8th edition of Health Law, published by West.

What’s the biggest issue to watch for in the ACA repeal/replace effort?
We can get very “in the weeds” about the details, but the biggest underlying concern is the issue of coverage. It all boils down to how many people might lose coverage and who is going to lose coverage. That is the one thing you can measure over time, through all the different iterations of the bill.

Has public opinion on having a right to health care changed?

Erin C. Fuse Brown

Erin C. Fuse Brown

It was easy to vilify the ACA before the election, but I think poll takers are finding that public opinion has swayed—for the first time since the passage of the ACA, the majority of people approve of it. Even among Republican voters, the number of people opposed repealing the law have crossed over to the majority, which is very telling.

There are those who still oppose the individual mandate, because they don’t want to be forced to buy insurance. But when you really boil down to what most people want, it is more affordable and accessible health care. Everyone’s deductibles and out-of-pocket costs have been going up, and everyone finds health care and prescription drugs to be too expensive. These trends weren’t really caused by the ACA—they would have happened anyway—but that’s what people are angry about. There are policy solutions to these problems, but I think people are starting to understand that repealing and replacing Obamacare is not going to fix these problems; it would, in fact, make them worse.

Repeal and replace has failed so far. What happens next?
It seems mostly dead for now, but that doesn’t mean we have seen the end of repeal and replace. The GOP majorities in Congress could pass a new budget resolution and start over again, but that may be tricky in 2018 with midterm elections looming and a major tax overhaul under debate. Also, this year’s failure doesn’t mean Obamacare is safe now. There are things the Trump administration can do without Congress that could significantly undermine the ACA.

The administration could stop making cost-sharing reduction payments to insurance companies that participate in the exchanges—insurance companies are required by law to lower deductibles and cost-sharing for low-income enrollees, and then the federal government is supposed to reimburse the insurance companies for these costs. The Trump administration has been wavering on whether it is going to continue making those payments.

If they stop making payments, the exchanges in some places would potentially collapse. If the payments stop, insurance companies would pull out of exchanges or raise premiums for everyone such that it could become untenable to sustain. Uncertainty over these payments is contributing toward the double-digit premium hikes and insurer exits from the exchanges.

The Trump administration could also stop enforcing the individual mandate. If this happens, people who are healthy would wait until they get sick to buy coverage. If only the sicker people are left in the insurance pool, that will drive up premiums. That will have the same effect of destabilizing individual insurance markets—insurance companies either won’t participate anymore or will have to significantly raise premiums if they do.

On the flip side, there are a few relatively simple fixes that would go a long way toward stabilizing the health insurance exchanges. Before the latest repeal and replace effort brought forth in mid-September, there were bipartisan discussions to pursue some of these efforts. Perhaps we will see renewed discussion of modest fixes that can gain bipartisan support. The other issue to watch for is whether states that have not expanded Medicaid, like Georgia, move to pursue expansion under waivers for experimental programs like other states, such as Arkansas or Indiana.

In your article “Developing a Durable Right to Health Care,” you discuss the idea that once entitlement programs are passed, they are impossible to retrench. The GOP leaders are testing that notion—what are your thoughts of that theory now?
There is this accepted wisdom that once you give people an entitlement or legal right to something as valuable as health care, the public will not want give it up. You can’t take it back. Even though Obamacare has been controversial since the start, even though parts of it have been problematic and implementation has not been as smooth as hoped for, it has provided really important benefits to a lot of people.

Probably the ACA’s biggest legacy is that it created in people’s minds the notion that there is a right to health care coverage and that the government should help people who could not otherwise get coverage, whether through assistance to buy private insurance or through public programs.

If the GOP members of Congress were to pass something that significantly strips health care coverage from millions of people and suffer no negative political consequences, then that would suggest perhaps the theory is mistaken. However, so far it looks like the theory is holding, and we will have to see whether members of Congress who voted for ACA repeal and replace will be punished in the midterm elections for doing so.

A lot of policymakers are scratching their heads because it seems like the normal rules have gone out the window. Even if someone is worse off, will they continue to vote for their party because affiliation is stronger than their desire for health care? This is an open question.

Did any of the proposals offer cheaper and better health care?
The Republican proposals would have made insurance cheaper for those who are healthy and young, but that’s not the people who really care about coverage.

Some have the feeling, “I’m healthy, so I shouldn’t have to pay for others to get coverage for their chronic illnesses.” Or, “I’m a man, so I don’t want to pay more for maternity care.” They want a cheaper, bare-bones policy that is only what they need—but that’s not how insurance markets work.

If you allow the market to segment in that way, then maternity care would become almost prohibitively expensive. So that’s the tradeoff—it’s not like you can pay a little less and others will pay a little more. The reality is, if you allow people to pay only for the coverage they need, then comprehensive coverage is unaffordable.

 

What has surprised you most in the efforts to repeal/replace?
The degree to which the traditional political and policymaking rules have been disregarded is unlike anything we have seen before. For example, in July the Senate voted on a bill not even knowing what the content of it was—they didn’t know what it was going to cost because they didn’t have a CBO score. That was completely unprecedented. It is a terrible way to make policy in an area that is as complex as health care and that is so important to the economy and to individuals.

What are some of the key provisions proposed thus far that will potentially have the most impact?
The more significant provisions are the changes to the Medicaid program. The proposals eliminate the Medicaid expansion, which is the provision of the ACA that allows states to provide Medicaid coverage to those who earn up to 138% of the federal poverty level, regardless of whether they otherwise fall into a traditional eligibility category such as being disabled.

In addition, the spending on the Medicaid program would have been cut by hundreds of billions of dollars. That would make it very hard for states to continue offering even their traditional Medicaid programs because the federal support will be significantly curtailed. Leaving states with a huge budgetary loss would give them no choice but to cut back on benefits and coverage in their Medicaid programs.

Even though much of the focus is about the individual insurance markets, the most catastrophic provisions in the proposals were the changes to Medicaid.

How do you teach the ACA amidst all this uncertainty? 
Students may have an initial feeling of “Why should I learn about Obamacare if it all could be going away?” The first thing I say is, it’s not all going away. Even if a repeal and replace bill were to pass, everything in the ACA would not disappear overnight. Some provisions would be phased out over time, other provisions would simply be tweaked, and entire swaths of the law stay in place. As of the time of this interview, however, it seems like the ACA will remain the law of the land.

The ACA sets the new baseline in the rules of the road for the health care system in the United States. And to understand and evaluate the merits or effects of any proposal to reform the health care system, you have to understand what the baseline is, what it achieved, and how it did it.

In addition, students can be given tools to evaluate rapid-fire developments in the health care debate. Students may be asked to determine the effects of the latest proposed bill or amendment and then convey that evaluation succinctly to a client, their classmates, or their family members. Even if none of the repeal and replace proposals become law, the ability to evaluate and translate a proposal’s implications in fair terms is a really valuable skill that very few people can do. Health care is very complicated, and students can feel good if they become sophisticated consumers of all the information and misinformation out there. They may disagree with each other, but as long as they are able to offer a measured and informed analysis, we have done our job.