The First Victims of Repealing Obamacare Will Be the Sick and the Poor

It has been widely noted that Donald Trump’s choice of Tom Price, the Republican congressman from Georgia, to be his Secretary of Health and Human Services makes a full-blown repeal of the Affordable Care Act more likely. Price, an orthopedic surgeon, isn’t just an armchair critic of Obamacare. In 2009, he put forward the Empowering Patients First Act, which was then intended as an alternative to the Affordable Care Act. It has since evolved into a replacement for it. In a very useful piece on Price’s proposal, which he reintroduced in 2011, 2013, and 2015, Vox’s Sarah Kliff explains how Price’s bill goes beyond other Republican repeal plans, including the one endorsed by Paul Ryan, the Speaker of the House.

Not only would Price scrap the Obamacare insurance exchanges and the generous subsidies that make them work, he would roll back the expansion of Medicaid that has benefitted millions of poor families and return the country to a system where private insurers have little incentive to cover high-risk individuals. During the past four years, more than twenty million Americans have obtained health coverage, and the proportion of Americans without it has fallen to a historic low: 8.6 per cent. If Trump’s real goal is to return to a market-based health-insurance system, with all the inequities and gaps in coverage that such a system inevitably entails, Price’s plan presents a possible blueprint for how to get there.

Of course, there’s no guarantee that Price’s plan, or anything close to it, will end up being enacted. Indeed, despite his selection for a Cabinet position, there is still a great deal of uncertainty about what sort of health-care legislation Trump and the Republican Congress will actually pass. Repealing Obamacare might appear straightforward as a general principle, but the details are immensely complicated. At this stage, about the only thing we can say for certain, or near certain, is that the big losers in whatever legislation might emerge will be the poor and the sick.

Under Price’s plan, reversing the post-2010 expansion of Medicaid alone would mean that about fifteen million people would lose their health-care coverage overnight. These people—members of families whose earnings are above the poverty line but less than forty thousand dollars a year—would once again be subjected to the mercies of private insurers. They would be eligible for tax credits to help them purchase private plans, but these credits would, in general, cover only a small portion of the monthly premiums.

Ryan’s plan is less draconian than Price’s in that it would allow states that expanded Medicaid to maintain it. But Ryan would still reduce the level of federal funding for these programs, which would mean higher costs for enrollees. And like all the Republican plans that have been proposed, Ryan’s would scrap the subsidies that currently enable many low-to-middle-income families to purchase private insurance plans in favor of smaller tax credits. Among those who stand to lose out from these types of changes are many working-class white voters who obtained health-care coverage in the past few years but who also voted for Trump. According to a back-of-the-envelope calculation by Paul Krugman, the New York Times columnist, there could be about five and a half million of them.

Before Price was chosen, there had been rumors that Trump might back off his campaign pledge to repeal the Affordable Care Act, or at least that he would undo the law gradually, over a number of years. He has said that he wants to keep some elements of the reform, including the ones that prevented insurers from discriminating against customers with preëxisting conditions and allowed young people to stay on their parents’ plans until the age of twenty-six. There seemed to be at least a possibility that, as time went on, Trump would retreat further from his campaign rhetoric and end up keeping in place most of what Obama introduced.

Even now, it is hard to see exactly how he will be able to both follow Price’s lead and keep his pledge to people with preëxisting conditions. Under Price’s plan, insurers would still be legally obliged to offer coverage to sick people, but they could charge much higher premiums to anybody who hadn’t maintained continuous coverage—a loophole that could potentially affect millions. Sick people who couldn’t afford coverage in the regular market would be forced to fall back on special plans for high-risk people, which the federal government would subsidize. But the billion dollars a year that Price is proposing to devote to this purpose would be entirely inadequate. Inevitably, many sick people would fall through the cracks and end up with no coverage.

This example illustrates a more general problem facing Trump and the Republicans. The health-care economy that emerged from the Affordable Care Act is a Rube Goldberg contraption with many interlocking parts: laws, taxes, subsidies, public mandates, and administrative directives, along with the expansion of existing features, particularly Medicaid. Some of these pieces may have appeared to be superfluous, but they were designed to work together and support each other. If someone comes along and fiddles with one of them, such as the subsidies or the individual mandate, it can affect the entire system.

Last week, I ran into a health-care economist who used to work for the Obama Administration. She was extremely upset about the election results and about the forthcoming assault on the Affordable Care Act, and she said the one solace she could take was a political one. She would now get to watch Trump and the Republicans try to achieve the impossible: repealing, or replacing, parts of Obamacare without depriving millions of Americans of coverage and igniting a firestorm. In picking Tom Price as his point man on health care, Trump has signalled that he is willing to embark on just such a course.