The goal of the Affordable Care Act was to whittle the number of uninsured Americans and bring order to the wild-west of the individual insurance market. According to a new analysis by the Urban Institute think-tank, if the law is repealed like Republican leaders want, both of those things would be undone. In fact, the uninsured rate would likely be even worse than it was before the law was passed.
If Obamacare is repealed, as is looking increasingly likely, health care in America would look a lot like it did a decade ago, with policies that are expensive and hard to come by unless they’re obtained through their employer. Nearly 30 million people would quickly become uninsured, the report authors find—the majority of them from the working class.
The researchers assume the law would be repealed through a process called reconciliation—a procedure that circumvents the filibuster and allows budgetary bills to sail through the Senate. This is one of the likelier paths for the repeal of the Affordable Care Act, as Vox’s Sarah Kliff reported.
The catch is that the reconciliation process would only allow for the repeal of the elements of the law that have a financial impact, such as the individual and employer mandates, the Medicaid expansion, and the tax credits for buying insurance. Other parts would remain: Insurers would still be required to cover pre-existing conditions, allow young adults to stay on their parents’ plans until they turn 26, and charge people the same no matter how sick they are.
That might sound ideal for the consumer—no rules, all benefits!—but insurers would be unlikely to stick around in the individual market for such a deal. Since healthy people would no longer be induced to buy insurance, it would leave them with only the sickest customers who can’t otherwise get insurance through work.
The Urban Institute’s projections assume that the ACA would be repealed next year, but that the repeal wouldn’t kick in until 2019, presumably so Republican legislators would have time to finalize and pass a replacement health-care bill. Even so, the instability insurers would sense with even a delayed repeal in 2017 might cause them to withdraw from from the Obamacare marketplaces. With fewer healthy people buying insurance, and fewer insurance companies offering it, the individual insurance market would start to destabilize right away, potentially causing the perenially-discussed death spirals.
“The market for nongroup coverage would virtually collapse,” the Urban Institute researchers write. “Some insurers … may continue to offer ACA-compliant plans at much higher premiums in the nongroup market, but without federal financial assistance, relatively few people—we estimate approximately 8 percent of those who have such coverage now—would enroll.”
As a result, nearly 59 million Americans would be uninsured in 2019, the researchers estimate—more than were uninsured in 2009, before the ACA’s passage.
Projected health-insurance coverage of the non-elderly in 2019
States that adopted the Obamacare Medicaid expansion—including some states, such as West Virginia and Kentucky, that went for Donald Trump in the presidential election—would see the greatest increases in the percent of their populations that are uninsured, since the Medicaid expansion would likely evaporate with the Obamacare repeal.
Most of the people who would lose coverage would be from working families and lack college degrees, and more than half would be white.
The federal government would spend about $109 billion less on both the Obamacare tax credits and Medicaid as a result of the repeal. But that would be partly offset by the estimated $88 billion increase in demand for in uncompensated care—free medical services like emergency room care given to the newly uninsured—shouldered by the federal government, states, and providers themselves.
The think tank’s projections are based on a policy simulation model whose forecasts were cited in the King v. Burwell Supreme Court case.
It’s true that the collapse of the health-care market would not be so bad if there was a replacement Obamacare—say, Trumpcare—ready to take its place. But many experts doubt that a new health-care law can be made ready even that quickly. “Even a two year delay might not be enough to get a program in place, much less to educate the public as to how it operated,” as the health-law expert Timothy Jost wrote in Health Affairs recently.
In an interview with the Washington Post’s Greg Sargent, Senate minority leader Chuck Schumer said Democratic lawmakers would not cooperate with Republicans on a replacement bill. “The odds, after they repeal without any replacement, of us sitting at the table to do something that will chop one arm off instead of two is very small,” he said.
Linda Blumberg, a senior fellow at the Urban Institute’s Health Policy Center and an author of the report, said “there’s a very good chance that nothing will be implemented by 2019. It’s always really tough to be able to get consensus on something as complicated as health reform.” And even if there was, she added, “there would be a lot of disruption. Doing this carries enormous risks.”