Repeal and Delay Is A Frightening Prospect

The inauguration of President Donald Trump on Friday marks the beginning of the end for President Obama’s signature health law. But will repealing and replacing Obamacare cost patients their lives? The media is doing everything it can to convince the public of as much.

A New York Times op-ed bears the not-so-subtle headline, “Without Obamacare, I Will Get Sicker, Faster, Until I Die.” One patient in Washington state recently told reporters that, without Obamacare, “I’m afraid because I will have no other option than to just not treat myself. And I will die.”

In reality, Americans have little to fear from the imminent demise of Obamacare. But it’s easy to understand why so many sick patients who have secured coverage through Obamacare are afraid. The haphazard “repeal and delay” strategy being promoted by several Republican members of Congress has left too many Americans unsure about the future of our health system.

If GOP lawmakers rallied around a single reform package, laid out the facts, and committed to a simultaneous repeal and replacement of Obamacare, patients would have far less cause for alarm. Vice President Pence said last week that he and the President Trump are committed to repeal and replace within 100 days after the inauguration.

For the most part, worries about the GOP replacement plan focus on the fate of patients with pre-existing conditions. It’s important to note, however, that even before Obamacare, patients were rarely denied coverage due to poor health.

For starters, before the new health law took effect, insurers could only turn away patients or offer plans that were unaffordable because of a pre-existing condition in the individual market. Most Americans get health insurance through their employer or through various government programs — where they’ve long been protected from denials of coverage.

Today, 7 percent of Americans have an individual health plan. Are all of these people at risk of losing coverage without Obamacare? Hardly.

A 2010 study found that the four largest insurers denied coverage to one in seven Americans because of their health. If we apply that rate to today’s individual insurance market, just 1 percent of non-elderly Americans would likely be denied coverage without Obamacare.

Even if we include the entire uninsured population of less than 29 million in this calculation, fewer than 3 percent of non-elderly Americans would be turned away by insurers because of a pre-existing condition. And that’s assuming that none of the uninsured population is currently eligible for employer-based coverage or some form of public health insurance.

Under the Republican replacement plans like House Speaker Paul Ryan’s “A Better Way” proposal, these individuals would still have access to quality, affordable coverage through state-based “ high-risk pools.” Ryan’s plan provides $25 billion in federal funding for these pools over 10 years. And Dr. Tom Price, nominee for Secretary of Health and Human Services, offers $1 billion a year for three years under his “Empowering Patients First Act.”

These programs group Americans with especially costly conditions into separate, state-run insurance pools. Participants are guaranteed low-cost coverage regardless of their health status. And by taking the costliest patients out of the conventional insurance market, this approach will reduce premiums for everyone else.

Unfortunately, Republicans haven’t been making this case well. Instead, the House and Senate have moved forward with a budget reconciliation process that they claim will deliver a swift “repeal” of Obamacare. But only taxing and spending provisions can be rolled back in this way. More central aspects of the law, such as its “essential health benefit” requirements, would remain in place.

And so, for opponents of Obamacare, this approach leaves much to be desired.

Worse, by eliminating parts of Obamacare before they have laid out a comprehensive vision for what comes next, Republicans are creating needless uncertainty — particularly for sick patients for whom access to coverage is a life-or-death matter. Uncertainty is also bad for insurers who may raise premiums even higher than they did this year or opt to pull out of even more exchanges.

“Repeal and delay” has also opened the door to a host of misconceptions about the consequences of repealing Obamacare. For instance, a new report from the Congressional Budget Office claims that the number of Americans without health insurance would rise to 18 million in the first year after Obamacare is repealed.

But that study assumes only a partial repeal of Obamacare and all but ignores any possible replacement which, if passed, would offer many alternatives for Americans with exchange coverage — plans that would be cheaper and better suited to their needs. Since Republicans haven’t put forward an official replacement, this is only to be expected.

There are other flaws in the CBO’s logic. For instance, the agency claims that 10 million people in the individual market will lose health coverage if Obamacare is partially repealed, largely due to the lack of an individual mandate. But slightly more than 11 million Americans even enrolled in exchange coverage in 2016. It’s unreasonable to assume that most of them will drop coverage if the tax penalty on forgoing insurance is repealed. Many of these individuals had insurance long before Obamacare required them to do so, after all.

Republicans have a clear plan for expanding access to affordable, quality health insurance to all who need it — a plan that is far superior to the abysmal status quo of Obamacare. The best way to realize that vision is through a strategy of simultaneous repeal and replace.

By some GOP members of Congress rushing ahead with a halfway “repeal” before they’ve articulated their vision, however, Republicans are needlessly sowing anxiety among many Americans who need the benefits their health insurance provides to stay alive. The American people want a health care plan that provides affordable, accessible, quality care for all. And that means empowering doctors and patients, not the federal government.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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