Many reasons have been offered for the U.S. Senate’s rejection of Republican legislation to repeal and replace the Affordable Care Act (ACA). Several factors have been cited, but failure’s real cause was Big Data – three killer numbers that stopped seven years of Republican momentum to “repeal and replace Obamacare” in its tracks.  

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Big Data Killed ACA Repeal and Replace

Tue Aug 8, 2017

Many reasons have been offered for the U.S. Senate’s rejection of Republican legislation to repeal and replace the Affordable Care Act (ACA).

Pundits have cited President Trump’s failure to explain to the public why the replacement was better than Obamacare; internal Republican left-right divisions; more effective messaging on the part of ACA defenders; Senator McCain’s (R-AZ) surprising post-midnight “no” vote; and Majority Leader Senator McConnell’s (R-KY) inability to get his Republican troops in line.

Other factors were the extraordinary complexity of health policy; Democrats’ solid wall of opposition; concerns of Republican governors; doubts that pre-existing medical conditions would be protected; opposition from influential groups like AARP, the insurance companies, the American Medical Association and the American Hospital Association; and Republicans’ use of an accelerated parliamentary maneuver to short-circuit regular order.

While all true to some extent, these are merely symptoms of the inability of Republicans, in control of both Congress and the White House, to pass any legislation. Failure’s real cause was Big Data – three killer numbers that stopped seven years of Republican momentum to “repeal and replace Obamacare” in its tracks.

Big Data #1: 23 million

The Congressional Budget Office (CBO), a nonpartisan congressional think tank, reported on May 24 that if the House-passed bill, the American Health Care Act, became law, 23 million more Americans would be uninsured in ten years’ time than under current law. Some 14 million of those would lose coverage because of the bill’s proposed cuts to Medicaid.

The CBO reaffirmed this on June 26 when it forecast that if the pending Senate bill, the Better Care Reconciliation Act (BCRA), became law, 22 million more people would be uninsured in 2026 relative to current law.

While the public seems equally divided for and against the Affordable Care Act, the idea that these Republican measures could take health coverage away from 20 million Americans was clearly not acceptable. The Affordable Care Act, seven years on, has carved in stone a new entitlement – to government-subsidized health insurance. History has shown that lawmakers cannot renege on entitlement promises, particularly for health care.

Big Data #2: $16,100

The CBO further estimated that because the House-passed bill would make big changes in the way ACA subsidies – which help lower-income Americans pay insurance premiums – are calculated, the “net” (after-subsidy) premium for a 64-year-old single individual earning $26,500 would be $16,100, compared to only $1,700 under the ACA.

The idea that House Republican legislation could conceivably force an astronomical increase in after-subsidy premiums for vulnerable Americans contributed to a rapid erosion of support for the House-passed bill. And this big data translated into a public perception that the legislation was mean-spirited, as it would cut government subsidies for lower income people at the same time as it eliminated ACA taxes on higher-income households.

Big Data #3: 18,679,000

The Kaiser Family Foundation (KFF), a non-partisan, non-profit health policy research group, estimated that if the Senate Republicans’ BCRA became law, and states followed up by dropping ACA’s Medicaid eligibility expansion, enrollment would drop by 18,679,000 nationwide by 2029.

Both the House-passed and the Senate bill would make two giant changes in the federal-state Medicaid program. The first would phase out ACA’s Medicaid expansion of eligibility that 31 states had adopted, while the second would restructure the 50-year-old program to rein in costs. Right now, over 70 million Americans are enrolled in the program, over 10 million of those because of the ACA.

But the national number for the decrease in Medicaid enrollment was not the real clincher. The blockbuster big data proved to be KFF’s state-by-state figures, especially for the states of moderate Republican senators undecided how to vote on the Senate bills. 

KFF estimated, for instance, that 858,000 people could lose Medicaid coverage in Ohio, home of Republican Senator Rob Portman. And in West Virginia, home of Republican Senator Shelley Moore Capito, some 227,000 fewer people would be enrolled in Medicaid because of the Senate’s proposed Medicaid cuts.

Republican Senator Dean Heller of Nevada surely was informed of an estimated drop of 256,000 Medicaid enrollees in his state. And in Senator John McCain’s home state of Arizona, KFF forecast a decrease of over a half-million in Medicaid enrollment. No wonder Senator McCain voted “no”! Senators understood that this big data described the real world plight of their own constituents.

For those wondering how it was possible that congressional Republicans, who hold a 52-48 seat majority in the U.S. Senate, were unable to approve any legislation whatsoever, not only to repeal and replace the Affordable Care Act but even to end the individual and employer mandates, look no further than Big Data.

What’s Next?

If the Affordable Care Act was working perfectly, lawmakers on both sides of the aisle could be content to move on to other priorities like comprehensive tax reform or infrastructure reinvestment. But both Republicans and Democrats agree that ACA is not working perfectly – far from it.

Insurers continue to exit ACA exchange marketplaces, and premiums push higher and higher. Some 40 counties may have no insurer offering ACA plans in 2018 and hundreds more will offer only one plan. Indeed, some exchange marketplaces may be unsustainable, as risk pools skew toward older and sicker enrollees. Meanwhile, it looks like exchange premiums could jump another 20% or more next year.

Assuming sweeping reforms like repeal and replace are off the table for now, Republicans and Democrats need to work together on legislation to stabilize the ACA exchanges. Cost-sharing reduction (CSR) subsidies that reduce out-of-pocket costs for some 7 million exchange participants should be extended. And insurance carriers may require some form of reinsurance funding to make their participation in the exchanges financially viable.

Whatever the next steps, lawmakers’ experience this year in trying to repeal the ACA makes one point crystal clear: Big Data, not political ideology, left or right, will drive U.S. health policy.