Consequences of repeal and delay

The following originally appeared on The Upshot (copyright 2016, The New York Times Company).

Republicans in Congress will soon be able to repeal Obamacare, as they have long wished to do. The Upshot’s health care columnists, Aaron E. Carroll and Austin Frakt, discuss the possibilities — the practical and the political.

Austin: Though they could change their minds, members of the Republican majority in Congress have said they want to repeal portions of the Affordable Care Act very early in the Trump administration. They’d target key provisions like premium and cost-sharing subsidies; the individual mandate; and various taxes that finance the expansion of coverage.

Instead of repealing these immediately, they will probably delay the repeal so it takes effect in a few years. During that time, they would work (or could work) to develop a replacement plan, possibly with the involvement of Democrats, though that is highly uncertain.

To some people, that might sound like a prudent course of action: to delay major changes so there is time to provide another way for people who rely on Obamacare to get health insurance.

But such a delay is also necessary, because congressional Republicans have not yet coalesced around a replacement plan. That’s not a big surprise because, until now, there was never a reasonable prospect of repeal, so getting specific about replace wasn’t necessary. Also, developing a coherent replacement plan involves challenging policy trade-offs and political risks. It will take considerable time for it to come together.

Aaron: I think the prudence goes even further than that. I’ve seen no proposal for repealing the A.C.A. that doesn’t result in a major disruption of health insurance. Such disruptions are usually extremely unpopular. It’s unlikely that Republicans want to see an electorate mobilized like we saw in the 2010 midterms after the passage of the A.C.A.

Delaying any changes until 2019 or later means that no changes will go into effect until after the 2018 House and Senate elections. No one will yet feel the pain of having to change insurance or providers. Republicans can go into their campaigns claiming to their base that they met their promises to repeal Obamacare without actually having to deal with any repercussions. They could also theoretically claim a mandate for continued change if they retained power.

This isn’t too much different than how the Democrats delayed the implementation of much of the A.C.A. until after the 2012 presidential election. Of course, that didn’t protect them from the backlash they felt in 2010. It’s not clear that delaying would completely shield Republicans either. There are other potential downsides from this plan.

Austin: By downsides, you’re probably thinking of how uncertainty associated with delay will affect health care markets and providers. Think about the major stakeholders:

Insurance companies considering offering marketplace plans might wonder if the investment in the market is worth it. If the A.C.A. will go away — and with any replacement uncertain — perhaps they’ll decide to wait and see. Likewise, insurers already offering plans might decide not to continue to do so since it’s not so clear there’s a future in it.

Hospitals will worry about whether they’ll see an increase in uninsured patients who are unable to pay for their care. That would certainly happen under repeal and is likely to happen under the types of replace plans Republicans are considering, which cover fewer people. Additionally, if some markets are left without plans because all insurers withdraw, hospitals will also experience greater demand for uncompensated care.

Drug and device companies will also worry about potential loss of revenue if fewer people are covered in the future and, therefore, cut back on care and prescriptions.

Finally, states that have expanded Medicaid might retrench, worried they’ll be left with the full costs of expansion once repeal goes into effect. And, states that haven’t expanded are more likely to hold off. Again, why invest in a program that’s going away?

None of this is good for patients and consumers who just want affordable coverage and accessible care. Are there other downsides I’ve not mentioned?

Aaron: It’s the downsides on the patient end that I think are being ignored most of all. Sure, this would be bad for insurance companies, hospitals and device and drug companies. But I think the largest group hit would be the 20 million people who could stand to lose their insurance overnight if repeal kicked into gear without a replacement plan ready to go. Can you imagine the turmoil if people with chronic illnesses are constantly worried about losing their plans?

Speaking as someone with a chronic illness, which I’ve written about before, the thought of losing my insurance would keep me up at night. If my child was ill, I’d be even worse off.

I think we could even get into a situation where people are delaying life decisions until this is resolved. Some women on an A.C.A. plan might put off getting pregnant as long as there’s a chance that they could lose their insurance and not be able to get on a new plan because pregnancy is now a “previously existing condition.” I don’t think it’s crazy to believe that repeal and delay could have a noticeable impact on the birthrate in this country.

Austin: We’re in agreement that even repeal with delay would be very disruptive, and possibly harm health care markets and consumers. If we’re right — and we’re far from the only ones predicting this — do you think there’s a chance Republicans wouldn’t follow through, or that they’d wait for a replacement plan before repealing?

Aaron: I really can’t see them waiting long to pass something. They’ve been campaigning on this for so long that I think they probably feel they have to act pretty fast. There’s so much work needed to get a replacement plan done, scored and passed that I think something like repeal and delay is a real possibility.

Call me a pessimist, but I think this could also turn into a long-term problem for Congress and the country. Back when we lived under what was called the “sustainable growth rate,” we had to go through a “doc fix” scare every six months to a year as it looked as if Medicare reimbursement rates were going to fall off a cliff. Instead of fixing the problem, Congress just kept kicking the can down the road and letting doctors and hospitals freak out every so often that the world was going to fall apart. (After more than a decade, the “doc fix” issue was finally resolved last year.)

I think the health care system can sustain more panic than many believe. I also think kicking the can down the road is one of Congress’s specialties.

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