Republicans face tough choices in replacing Obamacare
The Affordable Care Act, also known as Obamacare, has not delivered on its promises to provide health insurance for virtually all Americans and lower costs, but Republicans will find it tough to repeal and replace.
According to the Kaiser Family Foundation, the ranks of the nonelderly uninsured are down nearly 13 million but 28.5 million are still without coverage. Even with generous federal subsidies, 57 percent of the uninsured say insurance is too expensive or they are unable to get coverage.
Requiring Americans to obtain coverage — through their employer, by purchasing policies on government-run exchanges or enrolling in Medicaid — was supposed to improve the risk pool for insurers by including more healthy young people. And reduce the cost of taking care of low-income individuals by increasing access to preventative care and reducing expensive treatments for ailments left to fester.
However, individuals added to the health insurance rolls on exchanges are using more services than anticipated, insurance companies lost considerable sums in 2016, and premiums are up about 20 percent on average for 2017.
For most Americans, the ACA has created an unfair, two-tiered system.
But Republicans cannot simply repeal the ACA. Private plans lost in the upheaval cannot be easily resurrected, and now that millions of Americans rely on federal subsidies to obtain coverage, simple politics require those be sustained even if repackaged as income tax credits.
The German system of private insurance, like Obamacare, requires virtually everyone to obtain cov- erage, but costs for medical services are more tightly controlled.
Northern European countries spend about 11 percent of GDP on health care whereas the U.S. spends 17 percent. However, their approach violates two basic principles Republicans are not likely to abandon: Americans should not be compelled to purchase insurance under threat of fines, and government interference in the pricing of health services is unacceptable.
The private mandate could be eliminated by charging nonelderly adults, who do not maintain continuous coverage, a fee when they apply for private insurance. Medicare already imposes a penalty to discourage the elderly from opting out of the system until they need expensive care.
But permitting insurance firms to sell insurance across state lines as Republicans propose will not solve the cost problem through competition. New York and California provide large enough populations to encourage robust competition but little persuasive evidence indicates their prices and premiums are lower than in moderate-sized states like Virginia.
In the end, Republi- cans in Congress and President-elect Donald Trump will have to accept a role for government in regulating prices inside the private marketplace for health care or “repeal and replace” will prove a terrible failure.
Otherwise, the Democrats may well oust them from power in 2020 and then impose a single-payer system that subjects most Americans to moribund, low-quality service akin to that offered by the Post Office and IRS.