What to Expect from the ACA Repeal

At the dawn of an administration that loves to buck trends, many are wondering what shape healthcare reform will take. Writing this on the eve of the inauguration with acknowledgment of how rapidly things can change, here’s my best ACA prediction. 

The stated primary goal of the Affordable Care Act was to increase the number of Americans with health insurance. It has accomplished that goal to some degree. It is estimated that there are approximately 20 million newly insured patients as a result of the Act. Some will say 30 million, but that number counts approximately 10 million who were forced off the insurance they had and re-insured with policies that met the mandatory federal coverages. Of the 20 million truly newly insured, the largest percentage of these were patients added to the state Medicaid rolls by expansion of income criteria and massive subsidies by the federal government. The newly insured also consist of young people who were able to get insurance through their parents employer subsidized policies and previously uninsurable patients with pre-existing conditions. The up side of the ACA is that it can be fairly stated that more people are now insured than have ever been before.  The problem, however, is at what cost, and to whom has the majority of the burden of this expansion fallen.

Despite the president’s promises, many Americans were not able to keep their doctor or their insurance. Rising employer- based insurance costs encouraged employers to reduce full time employee hours to part time. And the cost of policies on the individual insurance market, where most small businesses must go for coverage, has gone through the roof. Monthly premiums are approaching the cost of a family home mortgage with deductibles that few have the savings to cover. So it goes without saying that despite the ACA’s obvious benefits for some, it remains a highly unpopular law with a majority of working Americans.

ADVERTISEMENT

President-elect Trump routinely promised to repeal the law on day one of his administration to loud cheers from his followers. But political promises, as out-going President Obama will attest, are easier to make than keep. Senator Rand Paul recently warned the President-elect to not repeal the law without a replacement ready to go. If he were to do so for the purpose of satisfying his promise, his enemies will gladly obstruct its replacement for no other reason than to embarrass him. Moreover, the law’s replacement will require a strong consensus in both chambers of congress to pass. So despite his promises, I don’t predict that President Trump will make the mistake that President Obama made and expend precious political capital on this issue too early in his administration. The law will likely be repealed and replaced, but not on day one.

That is not to say that Republicans have no replacement for the ACA, as many of the law’s supporters have maintained. Congressman Tom Price, MD, Trump’s nominee for the Secretary of Health and Human Services, has introduced a replacement bill every year almost from the time of passage of the ACA. If you want insight into the mind of the man who is mostly likely to influence the thinking of the incoming President on healthcare, read this bill – HR 2300. The bill calls for full repeal of the ACA, no surprise, and replacement with a system of refundable tax credits for the purchase of private health insurance from companies across the nation. Expansion of actuarial pools with broader competition from insurers are anticipated to bring down premiums and deductibles. Americans now confined to the individual insurance market will be able to associate in larger groups and negotiate for better rates. Expansion of health savings accounts that stay with the patient will encourage personal responsibility for health care spending and reward patients with healthy lifestyles. Creation of subsidized high risk insurance for those with expensive or chronic diseases will allow for focused efforts at cost containment that might be hard to administer to the larger pool of insureds. Block grants to states for the administration of health care for the poor are anticipated to allow states to focus on the patients that need assistance the most, while not expanding the already bloated federal health bureaucracy.

One aspect of Congressman Price’s bill that has not received much attention from Trump or the Republican establishment is his proposal to establish federal health courts with “safe harbors,” standards of care that have been established by specialty societies. The effect would be that allegations of negligent care that was rendered under a federally-subsidized program would be eligible for removal from a state court to a federal tribunal. Price’s bill also calls for raising the burden of proof for plaintiffs in such cases to “gross negligence” – a standard that a few states have already adopted.

ADVERTISEMENT

This revolutionary proposal is sure to receive resistance from trial lawyers who are quick to point out that “tort reform” efforts from various states, while lowering malpractice premiums for doctors, have had little impact on the costly practice of defensive medicine. But this is a diversionary tactic. Tort reform, to date, has only meant caps on damages. And it’s true that these caps have had little impact on the day-to-day practice of doctors. Unlike caps, federal health courts, with their published standards of reasonable practice, will make it clear to clinicians that they will not be held liable in every case that has a bad outcome.  The trial bar has tried to suggest that defensive medicine costs America no more than 3% at most and is not worth the loss to potential plaintiffs. But other studies, by clinicians, have suggested that defensive medicine practice could be responsible for as much as a 30% increase in spending.

At the end of the day, the divide between supporters of the ACA and those who wish to repeal it is a philosophical one. Supporters of a legal mandate to purchase health insurance surmise that when someone fails to provide for his own health care, either through a youthful sense of invincibility or a financial burden that is beyond their means, that burden, will by default, fall to the community. And therefore, the community (the state), has the right to impose whatever burden that it feels is necessary on whomever it wishes, to pay for that eventual care. Opponents, while admitting that society has a moral obligation to look out for those who can’t or don’t look out for themselves, largely feel that a system can be achieved that encourages participation in preparing for eventual health needs.  But that ultimate responsibility for health care falls on the individual, with assistance from the community.