Notice & Comment

Boom goes the ACA?

pslogofuturaRepublicans may have the votes pass a reconciliation bill that will hollow out the ACA in a few years. They pinkie swear that, at that point, they’ll pass some kind of replacement.

But for that to work, they’ll need Democratic support. Chuck Schumer is already saying they won’t get it: “We’re not going to do a replacement. If they repeal without a replacement, they will own it. Democrats will not then step up to the plate and come up with a half-baked solution that we will partially own. It’s all theirs.”

Maybe this is bluster. But I don’t think so: the 2016 election offered a lesson to Democrats about the political spoils of obstruction and brinksmanship. Repeal and delay could just be … repeal.

In that vein, Chris Koller has a must-read op-ed over at Politico. As the health insurance commissioner for Rhode Island, he oversaw a market for individual insurance that prohibited insurers from discriminating against the sick, but didn’t compel anyone to participate. It didn’t work so well:

To maintain the right balance between rates in the sick pool and the healthy pool, our office had to conduct extensive rate reviews and regulation, including forcing insurers to limit their rate hikes. The local Blue Cross plan, obligated by charter, was the only insurer to offer products; other carriers in Rhode Island found the market overregulated and too small. Only about 15,000 people bought coverage, and consumer dissatisfaction with this model was high. Approximately 100,000 people in the state—or about 10 percent of the population—either could not afford coverage or elected to go uninsured.

Fiddling with insurance regulations—a key Republican priority—wasn’t the answer.

With the legislature, we regularly considered less comprehensive benefit requirements. State-mandated benefits, however, were found to comprise only 10 percent of premium costs, and half of that amount was for mental and substance-use-disorder services now required by federal statute. Services comprising the other 90 percent were what most people consider essential — pharmacy, hospital and physician care. …

Wider rate bands — charging lower rates for young and healthy folks and higher rates for older ones — might have helped a little, but at the political cost of an irate and vocal older constituency. Taxing a broader base for our high-risk pool may have allowed for lower rates in our healthy pool, but historical experience with high-risk pools has shown that maintaining political support for an adequate tax base for a segregated pool of sick people is very challenging. …

The big lesson here is quite simple: Voluntary insurance is hard to do. There is a reason banks compel mortgage holders to buy homeowners insurance and states compel car owners to purchase liability insurance. Insurance pools cannot be comprised solely of those who think they will need to use coverage.

Let’s put some numbers on it. Urban just modeled the bleak consequences of repealing through the reconciliation bill:

The number of uninsured people would rise from 28.9 million to 58.7 million in 2019, an increase of 29.8 million people (103 percent). The share of nonelderly people without insurance would increase from 11 percent to 21 percent, a higher rate of uninsurance than before the ACA because of the disruption to the nongroup insurance market.

Of the 29.8 million newly uninsured, 22.5 million people become uninsured as a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate. The additional 7.3 million people become uninsured because of the near collapse of the nongroup insurance market.

Maybe these consequences are so politically intolerable that they’ll never come to pass. Maybe Republicans and Democrats really will come together, sing kumbayah, and replace the ACA.

But can you be sure? Repeal and delay lights a fuse that’s attached to a bomb. No one should be surprised if it explodes.


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