President Trump and congressional Republicans now realize that they cannot allow the existing ACA health insurance infrastructure, now seven years in development, to collapse, not only taking insurance away from over 20 million people but jeopardizing already-fragile insurance markets. As a result, we expect the Republican strategy to “repeal” ACA would be superseded by a “4-R’s” plan: certain sections of the healthcare reform law would be “retained,” others would be “removed,” still others would be “replaced,” and a few would be “reduced.” In addition, there seems to the late-breaking news of a fifth “R”: “repair.”  

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Retain, Remove, Replace, Reduce and Now Repair? Understanding How the Fifth “R” Will Affect the Affordable Care Act

Mon Feb 13, 2017

Shortly after Election Day, this blog predicted that because 20 million Americans had gained health insurance as a result of the Affordable Care Act, the Republican strategy to “repeal” ACA would be supereded by a “4-R’s” plan: certain sections of the healthcare reform law would be “retained,” others would be “removed,” still others would be “replaced,” and a few would be “reduced.”

This seems to be happening, with the late-breaking news of a fifth “R”: “repair.”

The reason for “5-R’s” is clear: President Trump and congressional Republicans now realize that they cannot allow the existing ACA health insurance infrastructure, now seven years in development, to collapse, not only taking insurance away from over 20 million people but jeopardizing already-fragile insurance markets.

To paraphrase one senator, Republicans can’t tear down the ACA bridge to health insurance before building a new bridge. And all the political commotion in Washington DC is threatening to topple the existing bridge.

Republicans, Democrats and the White House all agree that the condition of the ACA health insurance marketplaces is precarious. Premiums for exchange plans have soared an average of 25 percent in 2017 and large insurers are scrambling for the exits. In many counties only one insurer will offer exchange health plans this year. Repairing the ACA before it collapses is increasingly seen as urgent.

Meanwhile, the latest government data from the Centers for Medicare and Medicaid Services, show that the ACA, for all its stumbles and defects, is working for its beneficiaries.

On January 31, the date when open enrollment for 2017 ended, about 12 million people had signed up for ACA plans on the federal and state marketplaces. Some 10 million additional people had become eligible for Medicaid. While it’s not yet known whether all those sign-ups will pay premiums, for now 22 million Americans are projected to gain coverage through ACA for 2017. And roughly 87 percent of those who enrolled in exchange plans will receive some form of government subsidy to help pay premiums.

So now Capitol Hill and the White House are thinking about “5-R’s”—but face a big-time “trilemma”:

  1. What new policy will replace the ACA? What’s that new bridge going to look like?
  2. When will this new health insurance bridge be open to traffic? 2017? 2018? Even later?
  3. How will all this be accomplished legislatively? Republicans control only 52 U.S. Senate seats and legislation not protected by the expedited privileges of “reconciliation” requires 60 votes, i.e., the support of 8 Democratic senators. And will Republicans use the reconciliation procedure to repeal key elements of the law?

With the ACA outlook so confused, one is reminded of the optimism of the boy who fell into a manure pit: “There’s got to be a pony in here somewhere!” With all the uncertainty about what, when and how to change the ACA, Republicans’ first step may be to shore-up, i.e., “repair,” the tottering exchanges.

Influential senators and representatives are considering appropriating emergency funds to back-stop money-losing insurance providers and keep open the subsidies spigots that help 87 percent of enrollees afford exchange health plans. Some worry that if they allow “Obamacare” to collapse this year voters may name the rubble “Trumpcare.”

An urgent ACA “repair” mission, one that Democrats could enthusiastically endorse, could be the start of something big—a renewed bipartisan attempt, yes, bipartisan, to work on the “5-R’s” together; to create health care that would be “beautiful,” to use President Trump’s word. Maybe there really is a pony in there somewhere!