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Life Health > Health Insurance

Don’t dismantle Obamacare with no plan to replace it

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(Bloomberg View) — If only congressional Republicans were as confident in their ideas for replacing Obamacare as they are in their plans to repeal it. Then maybe the quick strike against the law that they have scheduled for the new year would be accompanied by a constructive debate about the vast yet troubled federal program that tens of millions of Americans have come to rely on.

It’s not as if the Affordable Care Act couldn’t be improved. People who buy insurance on its exchanges face rising premiums and fewer options for coverage. Despite the so-called individual mandate, requiring that everyone either carry insurance or pay a tax penalty, not enough young and healthy people are buying coverage, making it difficult for many insurers to cover their sick customers and stay in business.

Related: Health cost council rates ACA component life expectancy

And it’s not as if Republicans lack proposals to address these shortcomings. Instead of the individual mandate, for example, they would encourage people to have continuous coverage — and allow insurers to charge higher premiums to those who fail to keep it up. Where Obamacare provides subsidies to people of lesser means to help them buy insurance, Republicans would give tax credits to everyone who doesn’t get insurance through their jobs. One plan would go so far as to have states automatically enroll people who are eligible for such credits.

Whether these and other mechanisms can form an effective system depends on how they’re calibrated, of course. Tax credits would need to be high enough to persuade people to buy insurance. Automatic enrollment makes sense only with decent insurance. The state high-risk pools that some Republican proposals envision would need to be amply funded. And so far, at least, the replacers aren’t being very realistic about the costs and medical needs involved.

That said, it’s far too soon to dismiss their strategies as unworkable. Moreover, scheduling the end for two or three years hence, as some Republicans have proposed, would not help the pursuit of a viable alternative. While the clock runs, the individual insurance market could collapse.

A few of the Republicans’ ideas clearly are potential improvements, even under the current system. For example, Tom Price, President-elect Donald Trump’s choice to lead the U.S. Department of Health and Human Services, has proposed reforming the process of suing for malpractice by providing safe harbor to doctors who practice according to certain professionally agreed-upon standards of care.

And House Speaker Paul Ryan’s plan would cap the tax write-off that employers get for providing health insurance (much as Obamacare’s Cadillac tax would have, if Congress had not delayed it). If Republicans could make this provision work, they could shrink this gargantuan tax subsidy and perhaps help move the system away from its overreliance on job-based health insurance.


Any workable alternative to Obamacare’s individual insurance market should be judged, as the Affordable Care Act has been, by pretty straightforward criteria: whether it provides worthwhile insurance to an expanding number of people at a reasonable cost, and whether it reduces health care spending in total. The ACA has passed these tests rather impressively. That doesn’t mean the puzzle couldn’t be put together in a different way. But to prevent chaos, the new system needs to be worked out — and checked out by the Congressional Budget Office — before the old one is abandoned.


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