Obamacare Is Here to Stay… Kinda Sorta

Something that made a small headline the other day is when several Republican governors conceded that the Affordable Care Act (ACA) is here to stay.  The purpose of the headline, of course, was to try to suppress some of the debate against the law by suggesting that a prominent source of the debate is conceding.  If high ranking Republicans are saying the law is here to stay, then we’d better stop talking about repealing the law, shut up, and accept it, right?  Of course, the Republican governors being quoted actually meant that the law is here to stay despite its problems, not that it’s here to stay because it’s a great thing and they’ve seen the light. 

The truth about the future of the ACA, of course, is a little more complicated than what amounts to predictable headlines and retorts.  The ACA is indeed here to stay… kind of… in a way.  The reality is that within a week of the day the Republicans get back in charge of Congress and the Presidency, the ACA will be gone.  Well, more to the point, what was signed into law on March 23, 2010 as Public Law 111-148 and codified as United States Statutes at Large, Volume 124, Statutes 119 through 1024 will be stricken from the books and no more.  Republicans have invested too much political capital in denouncing the law, so keeping it in place is simply not a viable political option if they want to appease their voter base.  Expect this to be done with a theater not seen for a domestic policy repeal since Prohibition ended in 1933.  You’ll see the Democrats throw a fit, at least in public.  In private, they’ll be wiping the sweat from their brows knowing that they can finally move on from this chapter of their history.

But immediately – and probably very quietly – Republicans will have to pass a separate bill under a radically different name that keeps the positive aspects of the law in place and functioning, as well as some of the entitlements that they’ve been deriding for the last four years.  It very well may be hidden in the thousands of pages of the Omnibus Budget Reconciliation Act of 20XX, but the ACA will live on in those pages.  So, yes, the ACA is here to stay in the same way a tadpole becomes a frog.  Same creature, but with a different look.

So after this legislative sleight of hand is done, what can we expect Republicans to keep and throw away?  First and foremost to be put under the axe will be the individual and employer mandates.  These mandates are just not sustainable.  Health insurance remains too expensive in the individual market and the exchanges, and it’s only going to get more expensive.  The employer mandate has to go because it decreases full-time employment, which will translate simultaneously to lower tax receipts, increased unemployment, welfare spending obligations to governments, and a bump up in the uninsured rate.  If we’re lucky, they’ll remember to give the deep-six to the $2,500 cap the ACA instituted on Health Savings Accounts.  If there is one thing that puts a knife into the guts of prevention, it’s that cap. 

Also going will be the 3-to-1 community rating provision.  Don’t weep too much for this provision’s demise, because it drives the young and healthier out of the insurance market and raises costs for the elderly and the sick.  Look for the community rating provision to go back to at least its original 5-to-1.  It may even be raised more as a way of economically enticing the young and healthy into the risk pools, which will eventually alleviate costs for the highest risk individuals.  (Note that I said “eventually.”)  Either way, low community rating provisions may seem like social justice, but the truth is they don’t make affording insurance easy for those who need it most.

As for the exchanges, we may or may not see them disappear.  If they go, the stated reason for their demise will be that the cost of their plans will have reduced their risk pools to the point where the exchanges became unsustainable.  It’s a viable reason, but behind closed doors we can expect the insurers to be pushing for their disappearance as a way to force more people into their own risk pools, while they work to kept the cost of premiums and number of patient encounters at about the same levels.  That’s health policy wonk-speak for saying the insurers will make a lot more money if the exchanges go.

Oh, yeah: The subsidies will either be eliminated or drastically reduced.  Why?  Because young people don’t vote, that’s why.  Next subject, please…

Sticking around will be the Medicaid expansion to 133% of the Federal Poverty Level.  It will have to be kept simply because it’s political suicide to remove an entitlement once so many people begin to receive it.  We might see the 80% loss ratio stick around, too.  If you recall, this is the provision of the ACA that says insurers are supposed to spend 80% of their premium dollars on health care services.  The Republicans can afford to keep the loss ratio in place because the reality is that it effectively does nothing but give insurers legal grounds to keep 20% of their premiums dollars as gross profit.  All insurers have ever needed to do to get around a loss ratio was to ask their states to raise their premiums.  It’s such a routine occurrence that nobody thinks twice about it anymore.  Keeping the loss ratio is good politics for a Republican Party seeking to project an image of being concerned for the common man against the evil corporations, while actually doing nothing about it.

The ACA’s health information exchanges will become a permanent (and very necessary) part of the American health care landscape, as well as its prohibition on pre-existing conditions.  The pre-existing conditions prohibition cannot possibly be axed because sickness does not care about political affiliation or socioeconomic status.  There are far too many Republicans and – even more importantly – independents who have sick relatives for the pre-existing conditions prohibition to be repealed.  Much to the chagrin of the Republicans, they’ll have to keep it, and the Democrats will hang their hats on this for decades to come, long past the time when America forgets about the ACA.

And this leads to the next most important question: Once Republicans are in control, what will they do to stop the cost crisis and improve the nation’s health care system?  That’s another article, but if my political experience serves me well, I’m going to guess they’ll do… ummm… nothing.  Republicans manage well, but apart from Ronald Reagan they are not known for being visionary leaders.  By contrast, Democrats have a vision of leadership that is so finely tuned, they often see things that aren’t there.  At least we can’t say we live in boring times.

Written By Matt Haarington
Staff Writer