It’s hard to know what to think about the Trump administration’s plan for health care. Every day there is a different story to tell. But we know the Trump White House and the Republican Congress hate the Affordable Care Act and have promised to repeal the law and replace it with something better.
And that’s the problem: What is something better?
President Trump told The Washington Post that a new health care law should provide “insurance for everybody” and that he would force drug companies to negotiate better prices for Medicare and Medicaid.
Kellyanne Conway, a counselor to the president, told NBC that the replacement law will turn Medicaid over to the states; the federal government would then let states figure out how to cover their citizens.
Congress’s goal with such a plan is to spend less. Quite a bit less. Current federal law requires states to cover low-income families, qualified pregnant women, children, and people who receive Social Security. The Affordable Care Act expanded coverage, and the Supreme Court essentially made that expansion optional. Thirty-two states (including Washington, D.C.) signed up, and 19 said no. Shifting Medicaid to a block grant would limit the spending no matter how many people qualify. States would be left to figure out how to make the program work without destroying budgets.
The Affordable Care Act is a complicated piece of legislation.
The Affordable Care Act is a complicated piece of legislation. And much of the discourse about the act focuses on the 6.4 million plans purchased through market-based exchanges. But the rest of us? More than half get insurance through our employers (although that’s down from two-thirds in 2002), and most people older than 65 get their insurance through Medicare.
Then there’s Medicaid, covering 72.5 million Americans (including the Children’s Health Insurance Program). This is the largest insurance program in the United States—and its expansion was the most successful element in the Affordable Care Act, adding 12 million people to the ranks of the insured.
The New England Journal of Medicine cites evidence of why that part of the law has worked so well: “Access to primary care and treatment for chronic conditions have increased, and rates of skipping medications to save money have decreased. Medicaid expansion has led to as much as a $1,000-per-person reduction in medical debt sent to collection, and hospitals have seen their uncompensated-care burden drop by $10 billion. Perhaps most strikingly, the White House estimated—on the basis of extrapolations from prior research on Massachusetts’ 2006 health care reforms—that approximately 24,000 lives have been saved each year by the ACA’s coverage expansion.”
So something better must ensure that these 12 million people don’t lose those insurance benefits.
Most governors get this, even conservative Republicans.
In a letter to Congress, Ohio Gov. John Kasich said he supports repeal of the Affordable Care Act only if it includes a replacement bill: “In Ohio, one million residents gained coverage through the federally run exchange or Medicaid expansion … Any replacement should take into consideration these individuals’ current arrangements, make transitions as orderly as possible, and demonstrate why the replacement is better than what individuals have now.”
Something better must ensure that these 12 million people don’t lose those insurance benefits.
Republicans met in Philadelphia on Jan. 25 to consider their alternatives. A conservative caucus wants more tax credits to pay for insurance. Another proposal by Maine Sen. Susan Collins and Louisiana Sen. Bill Cassidy, a physician, would allow states to stick with the Affordable Care Act. Cassidy said the bill would repeal mandates that force people to buy “coverage they don’t need and can’t afford.”
But this gets back to the mathematics of creating something better. Successful insurance programs are the ones with massive pools of people participating. Insurance companies (or governments, for that matter) will go broke if they only insure sick people: They need healthy people to contribute. They need young people. There must be coverages that aren’t used.
That’s one reason the Medicaid expansion has been so effective.
It’s not hard to think of a young family with a paycheck that does not go far enough to cover expenses. Health insurance, even when available, costs too much. According to Families USA, data from 11 of the states that expanded Medicaid found that most who benefit from the insurance are employed. “With more people insured, the cost of providing care that was previously not paid for [uncompensated care] falls. That saves money for everyone who provides or pays for uncompensated care—directly or indirectly—like hospitals; city, county, and state governments; employers who provide health insurance; and state taxpayers.”
Congress is already slowing down on the Day One promise to repeal the Affordable Care Act. House Speaker Paul Ryan said after the Philadelphia meeting that legislation could be enacted by summer. The problem for Republicans in Congress and the Trump White House is that they made a promise that cannot be kept. Plans to replace insurance with tax credits will be a disaster. And states cannot afford any replacement that limits future funding for Medicaid.
Of course, there is one way to create “insurance for everybody.” It’s a single-payer, taxpayer-funded health care system. That is the ultimate massive pool of participation. Will it work? It already does in just about every industrialized nation.