The Future of US Healthcare after the Repeal of Obamacare

With the Republicans now in control of Congress, and the Trump administration in charge of the executive branch, it appears almost certain that “Obamacare” or the Affordable Care Act (ACA) will be repealed in very short order.

An irony of The ACA (Obamacare) debate is that one of its key provisions - the individual insurance mandate - has conservative / Republican Party origins. In Congress, the requirement that individuals purchase health insurance first emerged in the the Republican health care reform plan introduced in 1993 as an alternative to the Clinton plan.

The mandate was also a prominent feature in the Massachusetts plan passed under then Gov. Mitt Romney in 2006. According to Romney "We got the idea of an individual mandate from Newt Gingrich and Newt got it from the Heritage Foundation.  

The situation begs the question:

What's the best way to sensibly proceed with health care reform in the US for the long-term?

And what are the implications of a partial repeal of the ACA through the budget reconciliation process? What will happen to the more than 20 million people who gained insurance coverage under ACA, through premiums have risen sharply in many states while some insurers have fled the law's healthcare exchanges?   

Objective Perspective on the Impact of the ACA Repeal   

The Urban Institute addressed the second question in a study released in late 2016 and their conclusions were more than unsettling:

• The number of uninsured people will rise from 28.9 million to 58.7 million by 2019, an increase of 29.8 million people (103%). The share of non-elderly people without insurance will increase from 11% to 21% a higher rate of uninsured people than before the ACA because of the disruption to the non-group insurance market. 
• Of the 29.8 million newly uninsured people, 22.5 million people will become uninsured as a result of elimination of premium tax credits, the Medicare expansion, and the individual mandate. The additional 7.3 million people will become uninsured because of the near-collapse of the non-group insurance marketplace.
• 82% of the people becoming uninsured will be in working working families, 38% will be age 18-34, and 56% will be non-Hispanic whites. 80% of adults becoming uninsured will not have college degrees.

A Look Back at the Origins of the Affordable Care Act 

The Heritage Foundation set the groundwork for the ACA in their 1989 lecture entitled "Assuring Affordable Health Care for All Americans" written by Stuart M. Butler. The document states some facts that directionally hold true to this day - and here's a slightly updated version of that opening:

"The United States spends over 18% of its Gross National Product on health care. That translates into more than $10,000 per person each year - more than the per capita GNP of many countries. Yet although the US spends fare more than any other country on health care, there are gaping holes in the system's coverage, and health care services are gripped by run-away inflation. As many as 30 million Americans lack adequate insurance against health care costs, and many other who have insurance still dread the financial impact of a serious disease."

While we strongly endorse the idea of universal health care as the correct solution to the problem, it can only be accomplished with two key elements that are part of ACA as it stand today, which were key tenants of the Heritage plan back in 1989:

Mandates: to make sure every one is covered.

Subsidies: to make sure those who can not afford health care (and do not qualify for Medicaid) can still get it. 

Where does American Health Care Stand in the Developed World?

This discussion should be put in the context of the following: America ranks well down the list in health care compared to every other developed nation, all of who spend considerably less per capita on health care. 

How can America be spending so much on health care and yet have a system with some many shortcomings? The reason is that the system has been built upon unsound foundations.

Each time we have tried to deal with a particular health care need we have added on a new component without addressing the underlying problems. When a house is built on a bad foundation, adding on extra rooms leads to continuous and expensive repairs, and the real possibility of total structural collapse. 

Problems with the US Health Care System

The Heritage Foundation went on to identify 3 causes of the problems which hold true today:

1. The System's reliance upon employer benefits rather than individual insurance, which disconnects the user from the services they require by the normal means of a financial transaction. Transactions that train users and suppliers in the most efficient practices, the absense of which inevitably leads to run-away and unnecessary inflation.
2. The means by which the government assists the process does not channel the greatest help to those in need of it most, with the tax code favoring employer plans to the disadvantage of those who work on their own, or have low paying jobs. Medicaid is tired to welfare, meaning the range of people who are not in real poverty still can not affor the high cost of health insurance. 
3. We do not require people to have health insurance, meaning particularly the yound and healthy tend to avoid it, depriving the the pool of needed funds and courting disaster for some which the state must pick up when needed.

Planning for the Future of US Healthcare  

Reading between the lines of the 1989 Heritage Foundation report after they consider a range of “solutions” that will not work – they seem to beg the larger question: What if we started over in terms of designing a new US health care system?

While no one is sure in any sense of the word what Congressional Republicans and the new Trump Administration have in mind in terms of a replacement for ACA – Federalist 2.0 put forward the following tenants of US health care reform, which are by and large aligned with what the what the Heritage Foundation advocated back in 1983:

1.    Universal Heal Care: All citizens should be guaranteed access to affordable health care.

2.    Cost Control: The inflationary pressures in the health industry should be brought under control.

3.    Increasing Quality: Improving the overall quality of US healthcare should be a priority.

4.    Sustained Innovation:  A reformed system should encourage greater innovation in the delivery of health care.

It seems that the time is right to avoid having Congress and the Trump administration “throw the baby out with the bath water” when it comes to enacting new health care reform.

Why not take the elements of Obamacare that work and then take the time to properly study appropriate alternative approaches over the next four years rather than undertake a knee-jerk partisan effort to kill off all of the entirety of ACA?

Why not aim for a genuine re-tool of US health care by 2020 and work towards the goal of providing universal health care for all Americans versus providing it only to those who can get it from their employer or the government, or afford to pay for it themselves – leaving an estimated 60 million people in the lurch of being uninsured?