Saturday, January 25, 2014

If Republicans win it all, what will they do to the ACA?

I want to make a foray into reporting and ask some healthcare wonks what they think Republicans will do to the Affordable Care Act if they win both houses of Congress and the presidency by 2016.

While Republicans gleefully anticipate the ACA's implosion, ACA supporters assure themselves that repeal is a dead dream, as the ACA has already provided insurance to millions and rewritten coverage rules (e.g., guaranteed issue) in ways that will be impossible to take away. That may be true. But it does seem to me that Republicans in control of Congress and the presidency could ruin the law without repealing it outright.  They could do so out of a combination of antipathy to a law that (colloquially) bears Obama's name and sincere belief in principles such as consumer choice and deregulation.

Complete repeal would be incredibly disruptive not only to, say, 20 million people who may have gained insurance through the ACA by 2017, but also to the insurance industry and the healthcare industry, which will have adapted (in perhaps not entirely benign ways) to a host of payment and performance incentives.  "Repeal" also entails "replace," which is too much work for the post-policy GOP.  A likely hybrid perhaps, would be to dismantle chunks of the ACA while calling the effort "repeal," while leaving many elements in place. That would leave Republicans with the options of taking credit for the ACA's destruction, or of taking credit for a radically altered system while calling it something else, or some hard-to-imagine combination of the two.

Back to my reporting project: let me make it open source here. Wonks, politicos, and other interested parties: what do you think of the feasibility and likely effects of possible future Republican drives to, for example 

1) repeal the individual mandate.

2) Deregulate the exchanges , e.g., perhaps by  a) abolishing the 3-to-1 age rating cap; b) repealing the ban on lifetime and annual caps; c) allowing exclusions for services such as mental health or childbirth; d) allowing sales across state lines (in concert with eliminating or drastically reducing federal coverage guidelines); or by other means.

3) Foster adverse selection within the exchanges by deregulating plans sold outside them, e.g., repealing the requirement that insurers put all customers within a given state in one risk pool.

4) Reduce subsidies ("we can't afford them"...).

5) Reduce federal reimbursement for Medicaid expansion; block-grant Medicaid.

Austin Frakt and Donald Taylor have challenged Republicans to reform the ACA by their lights -- to treat the law as, in Frakt's phrase, a chassis for conservative reform.  That project presupposes, it seems to me,  continued Democratic control of at least one house of Congress and/or the presidency, -- a precondition, I suspect, for genuine Republican efforts to make the law work better by their lights rather than to sabotage it.  That implies an argument (which Frakt and Taylor make) for Democrats to invite conservative reform -- to win Republican buy-in, lessening the chance that Republicans will simply try to destroy the law when they get a chance.

Avik Roy has proposed a plan that would both radically deregulate the exchanges and fold Medicare and Medicaid into them.  I am assuming that office-holding Republicans would not go for such radical reform in one one bite. Ditto for dismantling the employer-provided insurance system by ending the employer's tax exemption. Republicans sometimes pretend to favor this, as they used to tout the individual mandate and private exchanges -- but they have never shown a genuine appetite for dismantling the insurance source that covers more Americans than any other. The ACA takes a step in this direction by imposing a 40% excise tax on employer-sponsored plans that cost more than than $10,200 for an individual or $27,500 for a family -- which, according to a May 2013 Times article, had by that point already induced 17% of employers to alter their plans, though it doesn't kick in until 2018. Republicans could lower that cap -- when they're done lambasting Democrats for making ESI more expensive for employees. But again, they seem to have no real appetite for disrupting the status quo in ways that cause pain to current stakeholders.

On a state level, barring a radical federal restructuring of the ACA, GOP officials could experiment via state waivers, which will be available in 2017.  Some state exchanges as currently constructed may fail, thanks in large part to sabotage by GOP-controlled state governments. If the law stands, it will be incumbent on such state governments to try to meet the law's coverage goals by alternative means.

Of course, messy combinations of attempts to undermine the law and attempts to improve it might also occur.

Update: Above, I mentioned Austin Frakt's challenge to conservatives to consider ways to reform rather than repeal the ACA. It occurs to me on a cold read that I have in some part replicated a related Frakt post laying out various conservative reforms to the ACA, in ascending order of disruptive, and asking readers to weigh in as to how feasible each is. My question is somewhat different: to what extent would likely Republican reforms, imposed without need of significant compromise, undermine the ACA -- that is, make insurance less affordable, and less likely to protect plan holders from financial harm or ruin?  One final assumption: if Republicans gain control of the Senate, it will take them about 10 minutes to get rid of what's left of the filibuster.   


  1. "Sincere belief in principles such as consumer choice and deregulation" - good one.

  2. All they have to do is Repeal the entire thing and then have the Pres. unilaterally announce he will delay the repeal to allow companies and individuals to "transition."