What Will Happen if the Affordable Care Act is Repealed?

The Affordable Care Act (Obamacare) was designed to help more Americans have health insurance. It mandated that people have coverage. It made health care insurance easier to obtain. It also expanded Medicaid to cover lower-income people, established state marketplaces for purchasing insurance and provided subsidies to help cover the cost of premiums. 

It also prohibited insurance companies from denying coverage based on pre-existing conditions. The policy goal was clear: Provide health insurance to as many Americans as possible to help pay for medical procedures. 

It is important to remember that as the new Republican Congress and Executive branch move aggressively to repeal ACA - it was the Republicans that first put forth the basic tenants of the ACA back 1993. This was based on ideas the conservative Heritage Foundation put forth the their 1989 lecture entitled “Assuring Affordable Health Care for All Americans” written by Stuart M. Butler which included the idea of universal health care for all Americans. 

We would add to the notion of universal health care the overwhelming need to promote good health among Americans. Think of this as a “wellness dividend,” as a public good - one that could benefit the entire spectrum of Americans. It would deliver the dual-benefit of improved productivity and reduced health care costs if people simply don’t get sick as often as they do now due to poor health (from being over-weight, smoking, eating poorly, substance addiction, etc)

The Repeal of the Affordable Care Act

Now here comes the new Republican majority US congress and the Trump Administration and their efforts to repeal the ACA. A non-partisan Congressional Budget Office study just reported that 18 million people could lose their insurance within a year when this happens, and insurance premiums are likely to shoot upward if Congress repeals the ACA. Later, after the elimination of ACA’s expansion of Medicaid eligibility and subsidies for insurance purchased through ACA marketplaces, the number would increase to 54 million and then to 59 million in 2026.

Repealing the penalties that enforce the “individual mandate” would “both reduce the number of people purchasing health insurance and change the mix of people with insurance,” as younger and healthier people with low health costs would be more likely to go without insurance, the budget office said.

How many are at risk due to pre-existing conditions?

Before the Affordable Care Act was passed, many Americans faced being denied coverage from a new health insurer if they had a pre-existing medical condition. The ACA provision requiring insurers to cover everyone, regardless of pre-existing conditions, is a very popular component of the law.

The Kaiser Family Foundation projects that if the pre-existing conditions provision is repealed, 52 million Americans could be at risk of being denied coverage in the future.

The foundation concluded that in 11 states at least three in every 10 non-elderly adults would have this type of pre-existing conditions: WV, MS, KY, AL, AK, TN, OK, LA, MO, IN, KS – ironically all states that voted from Trump. Guess those voters missed the fine print on this issue.

What about the impact for people on Medicare?

A full ACA repeal will definitely impact a vast majority of Americans who are over 65 years of age and on Medicare.

A repeal will restore higher payments for the services performed under the managed care part of Medicare known as Medicare Advantage (which delivers extra coverage, like vision, hearing, dental, prescription drugs and health / wellness programs) per Kaiser. This will in turn lead to higher premiums for the people signed up with these programs.

The big ACA repeal whammy will be the reversal of efforts to close the “donut hole” for prescription drugs. One part of ACA dramatically cut the amount Seniors pay for prescription drugs. The “donut hole” existed before ACA when beneficiaries got some coverage up to a certain dollar amount, and then got none until a higher dollar catastrophic coverage provision kicked in. 

How much more will Americans have to pay out of pocket?

According to a Commonwealth Fund - Rand study released last fall, the current policyholder who purchased coverage on one of the marketplaces spends on average $3,200 in out of pocket costs annually for the premium and other costs, such as co-payments. 

The study found that repealing ACA alone without a replacement plan would increase out-of-pocket costs to $4,700 per year.      

Some replacement scenarios could produce a larger increase while some could result in smaller increases the study said.