Promoting freedom, innovation, and growth

Connect with IPI

Receive news, research, and updates

November 14, 2016

Obamacare on GOP's Chopping Block, But Repeal & Replace Won't Be Easy, Scholar Says

IPI expert referenced: Merrill Matthews | In The News | Media Hit
  CNS News

By Barbara Hollingsworth

President-elect Donald Trump’s “100-Day Action Plan” contains a pledge to “fully repeal Obamacare” and replace it with a free-market alternative.

“On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare,” Trump’s campaign website promised.

“We will work with Congress to make sure we have a series of reforms ready for implementation that follow free market principles and that will restore economic freedom and certainty to everyone in this country.”

Over 50 attempts by congressional Republicans to repeal President Obama’s signature health care law have been unsuccessful, but with Republicans controlling both houses of Congress when he becomes president in January, Trump will have the political means to keep his promise.

 Repealing Obamacare is a “pretty high item on our agenda,” Senate Majority Leader Mitch McConnell (R-KY) said on Wednesday.

House Speaker Paul Ryan (R-WI) also said Wednesday that Republicans plan to “hit the ground running” after Trump’s inauguration and repeal the ACA, which he said is“collapsing under its own weight.”

Trump will also have the public’s support. According to a recent Rasmussen poll, a record 55 percent of Americans are in favor of repealing the law.

But repealing and replacing Obamacare will not be easy, says Merrill Matthews, resident scholar at the Institute for Policy Innovation (IPI).

The Affordable Care Act, which was passed by a Democrat-controlled Congress with no Republican votes and signed into law in 2010, has altered the nation’s healthcare system and insurance markets so much over the last six years that repealing and replacing it “could be a minefield,” he warned.

“The highest hurdle the GOP faces is the potential for a Democratic filibuster in the Senate,” says Matthews, whose Ten Steps for a Market-Oriented Health Care System lays out a blueprint for creating a viable alternative to Obamacare.

Since McConnell with not have the votes to end a filibuster, “my guess is that they’ll use the reconciliation process, which they already modeled in a bill[Restoring American’s Healthcare Freedom Reconciliation Act] which the president vetoed” in January, Matthews told CNSNews.

The reconciliation process only requires 51 votes in the Senate, compared to 60 needed to shut down a filibuster.

But with Trump and many other Republicans on record supporting some Obamacare mandates, such as prohibiting the denial of coverage due to pre-existing conditions and allowing children to remain on their parents’ policies until they turn 26, “it’s going to be difficult to root out” entirely, even though “those mandates are what’s making Obamacare so expensive and unworkable,” he pointed out.

“If Republicans repeal the preexisting provision in the law, they will have to replace it with high-risk pools for uninsurable people,” Matthews pointed out. “But all the high-risk pools have been dismantled.”

“The Affordable Care Act ended health insurance in America,” said Twila Brase, president of the Citizens’ Council for Health Freedom, which has published a list of “5 Things to Do as Obamacare Collapses”.

“The ACA’s ban on affordable catastrophic insurance and its ban on pre-existing condition exclusions means we don’t have health insurance anymore,” Brase said. “The ACA mandates that health plans enroll people with pre-existing conditions. That’s not insurance against a risk. That’s third-party financing of a known condition.”

Another problem Republicans must overcome is the myriad regulations already on the books to implement Obamacare, Matthews told CNSNews.

However, “the law gives the secretary of Health and Human Services a lot of leeway about how to implement it. There’s something like 3,000 places in the law where it says ‘the secretary shall determine… the secretary shall decide….the secretary shall use discretion’ and so forth,” he said.

“Under a new Trump administration, the appointed HHS secretary could do a lot to scale back the regulations and could even rule that any insurance policies deemed acceptable by state insurance commissioners are good to go even if they don’t meet the legal standards,” Matthews told CNSNews.

Because of these and other obstacles, including the expansion of Medicaid under ACA, Matthews predicts that the GOP will “phase-in” a replacement for Obamacare.

I think they will leave the exchanges in place and continue the subsidies for health insurance at least next year until the change mechanisms are in placeI think they will leave the exchanges in place and continue the subsidies for health insurance at least next year until the change mechanisms are in place,” he told CNSNews.  

“Without a safety net for the uninsured and uninsurable, they would create real problems” for these individuals otherwise, he added.

The Republicans must also have a plan to replace other provisions of the law that have nothing to do with health insurance, such as those governing bio-similar generics, which include vaccines and other highly complex therapies, Matthews said.

In addition, the currently vacant Independent Payment Advisory Board, which has been referred to as a “death panel” because the ACA gives it sweeping powers to unilaterally change Medicare policy if spending goes past a certain amount, “is still in the law” he pointed out. “The GOP better kill that thing,” he said.

Obamacare “fundamentally reshaped the healthcare system, mostly not for the good,” Matthews explained. “If you repeal Obamacare and we go back to the status quo ante, there’s going to be a lot of high deductible, major medical health insurance policies available at the state level that cost a lot less and won’t leave 30 million people uninsured.”

But exactly how the transition would affect health insurers, doctors, hospitals and patients after six years of Obamacare is a mystery. “I don’t think we know where this is going to end up,” he said.

However, what most Americans don’t want is a Republican-lite version of Obamacare that does not address the law’s major defects, according to James Capretta, health policy expert at the American Enterprise Institute, and Robert Moffit, senior fellow at The Heritage Foundation.

“Obamacare is deeply unpopular because it is based on a bureaucratic, government-centered vision of American health care. The entire program is rooted in an expansion of federal power and everything that entails: massive new entitlements, additional dependence on government, tax hikes that hinder economic growth, and federal micromanagement of health care that produces a sharp decline in the quality of American medicine,” they wrote in a 2012 article in National Affairs entitled How to Replace Obamacare.

“This is exactly what voters do not want in a proposal to reform the nation's health-care system.”


 

  • TaxBytes-New

Copyright Institute for Policy Innovation 2017. All Rights Reserved Privacy Policy Contact IPI.

e-resources e-resources