President-elect Donald Trump and congressional Republicans are set to make major changes to the Affordable Care Act (ACA) early this year. Trump was heavily critical of the law during the presidential campaign, and his nominee for Health and Human Services secretary, Rep. Tom Price (R-GA), has been outspoken about his belief that the law should be repealed and replaced.
But Trump has also defended some of the ACA’s provisions, including the guarantee of insurance to people with pre-existing conditions. Republican leaders have said they, too, want to keep the coverage guarantee, a declaration that has reignited a pitched debate over how to maintain the stability of health insurance markets and guarantee coverage for everyone.
The ban on exclusions of coverage for pre-existing conditions has long enjoyed strong support. Not surprisingly, Democrats and Republicans differ on how to make the coverage guarantee sustainable. Defenders of the ACA argue that the only realistic way to do it is to require healthy people, who are less expensive to cover than the ill, to buy health insurance.
The ACA does just that by imposing fines on people who forego coverage. The so-called individual mandate, of course, is also the least popular aspect of the ACA, by far. When opponents of the law talk about repealing it, they usually start by saying they’ll ax the mandate. So how would Republicans repeal the mandate while keeping the coverage guarantee for people with pre-existing conditions?
House Speaker Paul Ryan’s health care plan would require that people maintain continuous coverage if they want to keep their premiums at reasonable levels should they get sick. People who go without insurance for a period of time would likely see their premiums skyrocket should they need extensive care. Ryan’s plan would give people with very serious conditions who need catastrophic coverage the option to enroll in high-risk pools set up in each state.
Ryan and other conservatives say this construct would compel people to buy insurance while they’re still healthy, without a government mandate. But critics say it won’t work. They point to states such as New Jersey, which instituted coverage guarantees for chronically ill people without the requirement that everyone buy insurance. The result was higher premiums and reduced enrollment.
Jonathan Gruber, an MIT economist who consulted with President Obama on health care reform, argues that Trump’s suggestion to repeal the mandate while preserving the guarantee of coverage would be worse than repealing it entirely. Under Trump’s plan, insurers bound by the pre-existing condition requirement might opt to deny coverage entirely to chronic disease patients, rather than issue them a policy that must cover their expensive treatments. Gruber argues that pre-ACA, when insurers could issue plans that excluded care related to a patient’s condition, patients were at least covered for their other health care needs.
This is all coming to a head now, with congressional Republicans promising to hold a repeal vote early this month so they can have a bill on President Trump’s desk as soon as he is inaugurated on January 20. The vote would delay the repeal to give consumers with marketplace plans time to find different insurance, but that isn’t keeping insurers and hospitals from voicing deep concerns about market instability and skyrocketing premiums.
This respectful public dialogue could become less civil if Trump and the Republicans can’t assure industry that the health care system will remain stable during a massive transition away from the ACA. But for all the bombast that will surely follow in one form or another, this debate will ultimately be waged on economic and behavioral theories about what motivates people to buy health insurance and how to build sustainable insurance markets that cover the sick as well as the healthy.