|Principal Writer:||Barry Shatzman|
|Understanding The Issue|
Reported NewsHealth Care Policy
Related BillsConcurrent Resolution FY2017
WHY CONTRIBUTE WHEN EVERYTHING IS FREE?
We're glad we asked.
If you've read some of our stories thinking...
... You want everyone to understand this
... You want better policies
... You want better conversations
... You want more like this
Then we need you to contribute.
It costs money to publish News in FiVe, and contributions are our only source of funding.
So if this article helped your understanding, please consider a small donation to help us keep doing this and help us reach more people.
Even a dollar or three every so often makes a difference.
In return, we'll keep providing you the most relevant, understandable, and accessible news and information.
It's secure and takes only about a minute.
What is this about?
President Trump and Republicans in Congress have stated an intent to repeal the Patient Protection and Affordable Care Act - also known as ObamaCare.
They also have said they plan to replace it, but have not agreed on what the replacement health care policy might be like.
In this discussion we'll explain attempts to dismantle Obamacare and what it could mean to you..
To better understand what health care public policy is about, read our discussion.
Obamacare provides previously unattainable protections
As the nation's public policy for health care, ObamaCare specifies how much Americans should pay for health care insurance and the types of care that the insurance must cover.
It continues the nation's basic model for health care that, for most Americans, for-profit insurance companies pay for a portion of our health care using money we pay to them as premiums.
ObamaCare added several tangible protections to Americans that did not exist before. These protections include...
The law also requires that most people obtain health care insurance. This requirement has became known as the mandate.
What can Congress do?
In the 2017-2018 Congress, Republicans held a majority in both houses of Congress, providing a almost clear path to repeal the law.
However, to repeal the law - or to approve a replacement - effectively would require 60 votes in the Senate because any bill can be filibustered. Without a replacement offering the same protections as the ObamaCare currently provides, it is unlikely that enough Democrats would allow that to happen.
The Republican majority in the Senate has another mechanism at its disposal - known as budget reconciliation. Reconciliation bills can be passed with a simple majority. Filibusters are not allowed.
There's a catch, however. Under current Senate rules, reconciliation can be used only for issues that directly affect spending or revenue (taxes). In other words, reconciliation cannot be used to alter protections provided by the law - such as the requirement that insurance companies do not discriminate against someone with pre-existing conditions.
But they still can do a lot. For example, things they likely could do include...
Starting in 2019, Democrats control the House
In 2019, Democrats became the majority party in the House of Representatives.
As a result, Republicans no longer have the ability to pass reconciliation bills. Any bills (including those that would end ObamaCare, require support from Democrats.
Court case already has the Obamacare on the brink
If President Trump really wants to eliminate Obamacare, he might have an even easier path than budget reconciliation. He just needs to do nothing.
In 2015, the Republican-led House of Representatives sued the Obama administration over Cost Sharing Reduction Subsidies - subsidies paid to insurance companies to cover their cost of reducing premiums and out-of-pocket expenses for people with incomes less than 2.5 times the federal poverty level.
The law requires insurance companies to provide these cost reductions. And it requires that the companies be reimbursed by the government. However, Congress had not allocated the money for it since 2014.
Therefore, Republican House leaders claimed, the Obama administration violated the constitution by spending money Congress did not allocate.
In May 2016, a U.S. District Judge Rosemary Collyer agreed with the House leaders' argument and ruled against the administration. The administration immediately appealed, and the judge allowed the payments to continue during the appeal process.
While the case remains on appeal, the Obama administration as been replaced by the Trump administration. If Trump drops the appeal and lets the ruling stand, the payments to insurance companies would end unless Congress appropriates the money.
The outcome of stopping the payments could take several forms. Insurance companies still are required by law to provide the reductions, and the law requires the federal government to provide the reimbursement. Insurance companies could sue the government to obtain the promised money. They could raise premium costs on everyone to cover the expenses (a complex scenario because the subsidies are available only with silver level plans).
How would the law be affected?
The components of Obamacare all are interwoven, so breaking one has the potential of making the entire health care policy unworkable.
To use the examples in the previous section...
Prior to Obamacare, each state had its own criteria for Medicaid eligibility. Medicaid Expansion allowed states to increase coverage to anyone earning less than the federal poverty level at little cost to the state. With no federal money to pay for Medicaid Expansion, health care for those Americans who were not covered before Obamacare would again be uncovered (unless a state decided to now pay for coverage it didn't pay for before).
The federal government helps people pay for insurance through subsidies. So if an insurance company is charging $500 a month for a policy and the government's subsidy is $300, you would pay only $200. If Congress cancels those subsidies, you now would need to pay the entire $500 in order to keep your coverage.
The mandate to maintain coverage is enforced by the tax penalty for not having it. If that penalty is eliminated, many might choose to go without coverage - especially those who consider themselves to be in good health. From an insurance company's point of view, that would mean less income to cover the expenses of the less healthy customers who remain. Those expenses would be covered by raising premiums for their remaining customers.
Eliminating the tax penalties on large employers who do not offer health care insurance to their employees means that fewer employees will get insurance from their employer. They will need to buy insurance on their own (effectively a pay cut) or go without coverage.
Many of the cost benefits of Obamacare (Medicaid Expansion, subsidies) are paid for by extra taxes on those with very high incomes and on certain companies in health-care related industries. Eliminating these taxes would mean the federal government would need to find the money to pay for these benefits from somewhere else (or not pay them).
The effect of these things combined would make insurance unaffordable for most people - while those earning very high incomes would save money on their taxes.
Fewer insured, higher premiums
The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) studied what would happen if the PPACA were dismantled this year. The largest effects would start next year, as insurance companies and people already have plans locked in for this year.
Click here to read the Congressional Budget Office analysis.
The healthiest could buy coverage outside the exchange
The previous section discusses health coverage plans purchased through a state's exchange. Unless Obamacare is repealed (we explained the difficulty above), those plans would still need to cover everyone - regardless of their health situation.
Without the mandate, people would be free to buy policies outside the exchanges. Those policies, however, might not cover things such as preventive care that Obamacare required. They also would be able to discriminate against those with pre-existing conditions - making insurance for those people even more costly.
When Obamacare was being debated, President Barack Obama famously said people could keep their plan if they wanted. That turned out to be untrue for many, because their plans did not cover the essential health benefits that Obamacare requires.
Plans to replace Obamacare offer fewer protections
There have been, and continue to be, a wide range of proposals to replace Obamacare as the country's healthcare policy.
A 2016 policy analysis by Rep. Paul Ryan and a 2015 bill proposed by Rep. Tom Price. Price has been nominated by President Trump to be secretary of Health and Human Services, which would administer any health care policy.
A few concepts in these proposals are common to several other proposals...