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January/ February 2012 Obamacare

It's toast.

By Harold Pollack

Some liberal health policy wonks have gleefully noted this flaw in the repeal effort as evidence that Republicans might not go through with it. At this stage, anyway, conservative health policy wonks don’t seem especially bothered by the problem. For one thing, Capretta and the conservative health commentator Avik Roy suggest that the Supreme Court might well overturn the ACA’s community rating provisions if it overturns the individual mandate. If that doesn’t happen, Capretta told me, Republicans could address these matters in several ways. A Republican majority could, for instance, replace the ACA in a program that includes grants to states that implement (less generous) coverage expansions. These grants could be contingent on states enacting new insurance rules that override what was passed in the ACA. As Capretta told me, “The fact that money would be attached to the change should allow for it to be scored and thus included in reconciliation.”

He might be right, or he might be wrong. In any event, his argument is one many Republicans will be happy to accept.

There are indeed many ways in which repealing the ACA could damage interests that Republicans do or should care about. Repeal would have a disastrous budgetary impact in many red states, particularly those with large populations of uninsured, poor, and near-poor citizens. Under the act, the federal government is slated to finance virtually the entire cost of health insurance for people made newly eligible for coverage. States would also receive large subsidies through the new exchanges. States would be particularly harmed if Republicans convert Medicaid into a blockgranted program.

Many states have also gone surprisingly far to establish their own exchanges and to implement other provisions of health care reform. At last count, thirteen states have established health insurance exchanges. Eight have plans to do so or have pending legislation. Many of these states have Republican governors or electorates that supported John McCain in 2008. There is genuine momentum at the state level.

The next administration (and every president for the foreseeable future) will face tremendous pressures to restrain Medicare cost growth. The ACA includes virtually every major idea that has hitherto been cooked up to accomplish this task. Cost control measures are decidedly unpopular with both medical providers and the public. The first consequence of unraveling the ACA would be to unravel the political coalition required to pass these painful measures. A Republican president would face tremendous pressure to curb health care costs. Post-repeal, he would face a furious Democratic opposition with precisely zero incentive to help him.

Moreover, the more the Republicans become enmeshed in health care by trying to repeal the ACA, the more they would be saddled with the same political burdens President Obama and the Democrats now bear. Because Obama spent the first year of his presidency enacting health reform, he and his party came to “own” many things Americans don’t much like about our health care system that have little to do with the specifics of the ACA.

Right now, if patients dislike restrictive mammography guidelines, they can blame “Obamacare.” If physicians dislike aggressive cost control or their increasing difficulties practicing outside large care systems, they blame “Obamacare.” Governors who don’t like rising Medicaid costs blame “Obamacare.” Employers who don’t like the rising costs of health coverage blame “Obamacare” too. (These patients, physicians, governors, and employers are wrong to blame the new law, but that’s another matter.)

If the Republicans break health reform, they risk owning the results. And there will still be much to dislike in American health care. Little of what people dislike in our health care system will be improved by curtailing or overturning the ACA. Indeed, the one concrete consequence of overturning the ACA would be to consign tens of millions of people to the ranks of the uninsured. Writing in the New England Journal of Medicine, Harvard health policy researcher (and former Obama administration official) David Blumenthal predicts that if Republicans overturn the ACA next year, “by 2020, 20% of Americans may be uninsured, even as 20% of our gross domestic product is devoted to health care.”

One might expect these daunting long-term challenges to restrain Republicans. But there is no evidence that the next Republican House and Senate majorities will be focused on these matters. The heart and soul of the Republican Party are more radical, their concerns more immediate. Right now, the ACA is not hugely popular with voters. In large part, it’s unpopular because its main components—the subsidies that will help individuals and small businesses purchase health insurance—don’t kick in until 2014. So Republicans have a narrow window of time in which to kill the law without paying too steep a political price. “As soon as the money starts flowing, you can’t stop it,” Capretta said.

I believe that repeal will ultimately prove bad policy and bad politics. There’s just too much wrong with the American health care system that the Affordable Care Act seeks to address. Repeal, if it happens, may be a great political blunder. This may provide some consolation to Democrats, but it will be cold comfort to the millions of people who need help.

[Return to What if Obama Loses: Imagining the consequences of a GOP victory]

Harold Pollack is the Helen Ross Professor at the School of Social Service Administration at the University of Chicago.

Comments

  • jim on January 05, 2012 11:37 AM:

    Health care reform is a good and necessary thing.
    The ACA is a bad thing, for reasons too many to list here. Don't willfully confuse the two.

  • Rick Ungar on January 05, 2012 12:09 PM:

    Harold - an excellent analysis.
    Democrats are far too comfortable in their belief that the ACA is, ultimately, bulletproof from repeal. It most certainly is not as you have beautifully made clear.

  • Paurnvab on January 17, 2012 3:37 PM:

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  • David Martin on January 19, 2012 12:01 AM:

    Here in Florida, an impressive portion of the population is already uninsured, and there's no political consequences at all.

  • square1 on January 25, 2012 9:26 AM:

    Don't believe it for a second.

    ACA was always an industry-sellout: faux-reform that actually protected the insurance industry and Big Pharma.

    I don't believe that the GOP would dare to repeal it, wholesale. The GOP then have to take ownership for the problem of rising health insurance premiums...which the GOP can now lay at the feet of Obama, even if ACA didn't cause the problem.

    Also, the insurance industry knows full well that they aren't likely to get a better deal than ACA: Under the present system, all the young, healthy (read: profitable) Americans who now forego insurance will soon be compelled to buy in. Repeal ACA and those profits go bye-bye.

    Even worse, the American people will not idly sit back after a repeal. They will say, "Fine. If ACA isn't the solution then what is?"

    There will be renewed calls for a public option, possibly Medicare buy-in, and maybe even a single-payer system. That is a nightmare for the insurance and pharma industries. The whole point of passing ACA was to take genuine reform off the table for a couple more decades.

  • Captain Dan on February 09, 2012 8:16 AM:

    If Obama Care is trashed by the supreme court, the Progressive that will be swept into office will institute a better system, based on the Canadian health system!

  • Econ Guy on March 09, 2012 2:28 PM:

    I love this stuff! You Liberals do not get it......If the Supremes rule it Unconstitutional we win immediately! If the Supremes rule it Constitutional we win again, because the majority of Likely voters want it repealed. As a result, they will be more motivated than ever to remove Obama and the Dems in the Senate. And shortly thereafter they will eviscerate it in early 2013......And for fun, we will have 4 years to replace at least two of the Libs on the Court......This is fun!

  • Nash Equilibrium on March 12, 2012 9:29 AM:

    The way the ACA was passed with threats, coercion, and sleight of hand radicalism was despicable. The only way to restore any confidence in governement is for government to un-do this over-reaching legislative abortion.

  • Nash Equilibrium on March 12, 2012 9:30 AM:

    The way the ACA was passed with threats, coercion, and sleight of hand radicalism was despicable. The only way to restore any confidence in governement is for government to un-do this over-reaching legislative abortion.

  • Costa Rica's Call Center on May 04, 2013 7:10 PM:

    OBAMACARE promotes outsourcing in Central America. Enacted in July 2010, The U.S. healthcare reform (�ObamaCare� or the �Patient Protection and Affordable Care Act�) is intended to pressure large and small employers through force and taxation. The end result will show North American companies deciding to send customer support, sales, lead generation and appointment setting jobs offshore or risk going out of business. Many will decide to hire a dedicated bilingual employee who is 100% committed to their project. ESL call center employees in Costa Rica are just as or more effective than transitional in-house staff. In addition, giving the owners the freedom to scale up their offshore staff without getting caught in the Obamacare challenge in 2014.