Repeal And Replace Can’t Wait Any Longer

The chief obstacle to repealing and replacing Obamacare may no longer be congressional Democrats. It could be the GOP itself.

Senate Majority Leader Mitch McConnell has promised to hold a vote on the party’s repeal-and-replace plan by the end of June. But as he’s tacked his plan to the center as part of a bid to hold onto moderate Republicans, he’s raised the ire of conservatives who are pressing for a plan that more fully repeals Obamacare.

Senate Republicans must iron out their differences — and not let fear of the unknown derail their seven-year-long plan to repeal Obamacare. The law is collapsing. The GOP may not have made this mess, but the American people are counting on them to clean it up.

Obamacare’s exchanges are disintegrating. Between 2016 and 2017, insurance-company participation in the exchanges fell by nearly a quarter, according to a new analysis by the Kaiser Family Foundation. As a result, more than one in five exchange customers had only a single insurer to “choose” from this year.

Things could grow even worse next year, as even more insurers head for the exits.

This past February, Humana announced that it would stop selling coverage on the health law’s online marketplaces in 2018. Another major health insurer, Aetna, followed suit in May, citing expected losses of $200 million this year. That’s on top of the $700 million the company lost on the exchanges between 2014 and 2016.

One of Iowa’s only exchange insurers, Medica, said that it was considering leaving that state next year. If the company follows through, tens of thousands of Iowans would not have access to a single insurer through the state’s exchange.

Just before Memorial Day, Blue Cross Blue Shield of Kansas City — an insurer with more than a million customers in Missouri — announced that it was leaving the state’s exchange.

And last week, Anthem said that it would not sell policies on Ohio’s exchange in 2018. Consequently, 20 counties across the state will not have access to a single insurer on the exchange next year.

Even exchange customers who have a few insurers to pick from next year may not be able to afford coverage. Exchange insurers in Maryland are seeking premium hikes averaging 45 percent for 2018. Premiums are expected to rise 31 percent in Virginia and 24 percent in Connecticut. Seven of the eight insurers in Oregon have also requested double-digit premium increases.

These rate hikes come at a time when exchange-plan premiums are already high. A recent report from the Department of Health and Human Services found that average 2017 premiums on the federal exchange were 105 percent higher than average individual-market rates in 2013, before Obamacare became law.

These sky-high premiums and dwindling choices have caused the exchanges to consistently miss the federal government’s projections for enrollment. In 2010, the Congressional Budget Office estimated that 23 million Americans would be covered through the exchanges in 2017.

By 2016, after several years of subpar enrollment, the agency had lowered its estimate for this year to 15 million.

Even that number was off-base. Just 12.2 million Americans signed up for coverage in 2017. That’s fewer than last year.

Obamacare’s Medicaid expansion, meanwhile, has accelerated the program’s descent into fiscal instability. A report from the Centers for Medicare and Medicaid Services compiled under the Obama administration and released earlier this year admits as much.

The CMS study predicts that Medicaid spending will grow from nearly $576 billion last year to more than $957 billion in 2025. At this rate, the authors note, Medicaid threatens to “displace spending on other important programs.”

This funding crowd-out is already happening. Nearly one in every five dollars states spend currently goes to Medicaid.

America’s deteriorating healthcare sector makes the Senate’s dawdling puzzling — if not downright irresponsible. For the first time since Obamacare’s passage, the stage is set for Republicans to enact a patient-centered, market-friendly brand of healthcare reform that can repair the damage wrought by the previous administration.

The House-passed American Health Care Act is flawed. But it exhibits many of the principles that Republicans have been advocating for years. The Senate should move quickly to improve on the AHCA in ways that will transform our health sector into a more competitive marketplace — one with greater choice and lower cost.

Obamacare has forced America’s insurance markets to the brink of collapse, while setting state governments on a path to fiscal ruin. Senate Republicans know what’s required to create a health system that provides all Americans with access to quality, affordable coverage. What are they waiting for?

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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