A Roadmap to Repeal Obamacare

COMMENTARY Health Care Reform

A Roadmap to Repeal Obamacare

Dec 2nd, 2016 2 min read

Commentary By

Paul Winfree @paulwinfree

Director, Roe Institute for Economic Policy Studies

Brian Blase

Former Policy Analyst

Pundits have dismissed the chances of repealing and replacing Obamacare. But with President-elect Donald Trump’s victory and the GOP’s successful effort to keep control of Congress, conservatives now have a real chance to eliminate the health care law. The question is how.

Three years into its implementation, the Affordable Care Act has clearly failed. The law has wrecked the individual market for health insurance — premiums have soared, coverage has been canceled en masse, and choices have been drastically curtailed. The cost of the law’s major coverage provisions have soared. In fact, the per enrollee cost of the Medicaid expansion is nearly 50 percent above estimates.

Republicans should be under no illusion that Democrats will help them undo President Obama’s chief legislative legacy. But with majorities in both the House and the Senate, they have a pathway to do so. It starts by using an arcane legislative maneuver known as reconciliation. While Senate Democrats can filibuster most legislation, reconciliation requires just a simple majority.

Last year, Congress failed to pass a budget for fiscal year 2017, creating an opportunity for Congress to pass two budgets next year, rather than just one. This gives Republicans two shots at getting filibusterproof reconciliation bills to Trump.

Critics will point out that repealing the ACA will undo a lot of popular changes — such as the law’s mandates that employers providing insurance cover all dependents up to age 26 and that insurers offer coverage for preexisting conditions.

These are legitimate concerns and when Congress writes its replacement plan, it will have to consider these issues as well as how to best subsidize health care for lower-income people. A few principles should guide the congressional replacement plan.

First, Congress should weigh which actors are in the best position to make difficult decisions about economic tradeoffs. For example, economists estimate that the age 26 mandate results in a wage reduction of $1,200 for every worker regardless of whether they have dependents. Rather than a one-size-fits-all Washington mandate, employers and workers should decide whether the coverage is worth the wage reduction.

Second, Congress should ensure that people who act responsibly are protected from [the high cost of] developing an expensive medical condition. One idea is guaranteed renewability — people with insurance must be able to renew their plan without the risk of a higher premium if they develop a medical condition.

Third, Congress must develop a better way to address the affordability of health care for lower-income Americans. The Medicaid expansion has proved too costly and has provided too little benefit to enrollees to justify the cost. A far better approach is to deliver assistance more directly to people while freeing up the supply side of health care to provide people with lower-priced options.

Although repealing and replacing the ACA is closer than ever before, many important details will have to be worked out. Congress must honor its commitment to free the country from the ACA and replace it with sensible reforms.

This piece originally appeared in The Daily Record

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