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Danger of Calling Repeal Without Replace on Obamacare

Health Insurance Piggy Bank
Danger of Calling Repeal Without Replace on Obamacare

Republicans are placing high priority on repealing Obamacare, but the political consequences could be devastating for them.

After campaigning aggressively against the Affordable Care Act, or Obamacare, since 2009; Republicans are set to finally repeal it. Congress may even have a bill on President-elect Donald Trump’s desk by Inauguration Day. What helped seal Obamacare’s fate was continually rising health insurance premiums, which may have played a role in electing Trump president.

While repealing Obamacare will make conservative activists happy, there is reason to believe that the American people as a whole won’t be as happy. A poll released Friday shows that there is only 20% support for immediate repeal. Most Americans do not want Obamacare to be repealed until a replacement plan is voted at the same time.

For their part, Republicans say they will have a replacement plan to vote on by the end of the year. The problem is that Republicans are not really united behind any particular replacement plan. Louisiana Senator Bill Cassidy unveiled his basic ideas of an Obamacare replacement in a speech on the Senate floor last week. Meanwhile, Kentucky Senator Rand Paul, who was the only Republican to vote with Democrats in opposing the motion to open debate on replacing Obamacare, also unveiled his own Obamacare replacement idea.

The Republicans do generally agree on some ideas. All of the Republican plans released so far aim to create more market-based competition in healthcare. Most of the plans aim to shift away from the comprehensive health insurance plans offered under Obamacare and towards more basic health insurance plans. All of the GOP ideas plan to expand the usage of Health Savings Accounts.

But Republicans could be walking into a minefield if they don’t approach the healthcare issue carefully. Instead, they should learn some of the lessons Democrats failed to learn when they implemented Obamacare in the first place.

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First, Republicans need to listen to public opinion. When Democrats and President Barack Obama passed Obamacare in 2010, it was done in spite of being unpopular with the American people. The legislation was a contributing factor in the massive electoral losses Democrats have suffered since then. Republicans would be wise not to misread or ignore the views of the American people, as Democrats had done.

What do the American people want in healthcare? For starters, they want their out of pocket costs reduced. Obamacare premiums increased an average of 25% in 2017. In some states, premiums even doubled. This was not sustainable in the long-term for the American consumer. All reforms undertaken have to result in costs going down for the American people both in the short and the long-term.

The next step for Republicans is to actually come up with a replacement plan, before undoing Obamacare. If Republicans decide to repeal Obamacare without a replacement, they will own the chaos that will follow. It would create uncertainty in the healthcare sector and in the economy as a whole. Businesses would hold off making decisions, especially anything involving expansion and more employees.

Many conservatives seem to believe that a replacement plan is not necessary often using a slogan along the lines of “let’s try freedom.” The problem with that is we forget healthcare has not been a free market for decades in this country. Unwinding Obamacare involves a lot more than just a slogan. There must be a replacement plan.

The second lesson Republicans must learn from Democrats is that they should not be afraid to be bold. Obamacare is in many ways little more than a overly complicated band-aid on the current system. Indeed, it was how they sold it. Remember the promise, “if you like your health care plan you can keep it?” Republicans should take the opportunity to go for broader health care reform.

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For example, one of the goals of Obamacare was to severe the link between employment and health insurance. According to a recent study, Obamacare has failed in that goal. Fortunately, Republicans appear ready to address that by proposing an end to the tax exclusion of employer health plans. Instead, they will offer a standard tax deduction for all Americans who buy health insurance. This is a good idea and Republicans should follow through on it.

Republicans should also pursue Medicaid reform. According to the Department of Health and Human Services, the largest single source of increased health insurance coverage was from Obamacare’s Medicaid expansion. But Medicaid suffers from poor quality because many doctors refuse to accept it. House Republicans have also shown a willingness to tackle this issue in the past, and they should follow through on it as well.

One of the most popular provisions of Obamacare is the requirement that insurers could not deny coverage or raise rates based on pre-existing conditions. Republicans have to keep these people in mind as well when replacing Obamacare. Thankfully, there are market-based solutions to deal with this problem as well – such as “guaranteed renewable” policies similar to term-life insurance policies with fixed premiums.

Finally, Republicans need to get rid of another popular provision, the one that allows young people to stay on their parents’ insurance until age 26. This has led to higher costs for employers and parents alike, and helps keep young people out of the health insurance market.

Obamacare has proven to be a failure, but Republicans should not rush to dismantle it. Ending Obamacare can only happen when a replacement is ready to go.

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Kevin Boyd
About Kevin Boyd 1 Article
Delightfully cynical professional writer and blogger (yes, that's a real job) who writes for numerous websites. Occasionally, I'm even a professional thinker. I turned being a nerd into a career.

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