Whats Next for the Repeal and Replace of the ACA?

After the Republican attempt to repeal and replace the Affordable Care Act failed last week, it’s fair to look ahead and try to determine what the future holds for the health law. It was unpopular when it passed in 2010, but since then the US population has become concerned that any replacement might be worse than what already exists now, making passing a new law difficult. Moreover, the GOP does not have enough votes in the Senate to repeal and replace the ACA on their own, further complicating the process.

ACA Background

The Affordable Care Act, sometimes known as Obamacare, was one of the most controversial parts of President Obama’s first term. In 2010, he and the Democrats succeeded in passing the massive 700-page bill after a long and public fight. The GOP began to make opposing the ACA a major part of their agenda, and a few years later in 2012, the Republicans won a wave of elections due in no small part to lingering unhappiness with the law.

As for what made it so controversial, a significant factor was its complexity. Even now, seven years later, few Americans have read the bill and understood all of its parts. It made several major changes to the health insurance and health care industries all at once. Here are some of the biggest pieces of the bill.

First of all, it created the exchanges, a state-level system of insurance marketplaces that let customers compare health insurance plans online. While in theory this would make shopping for health insurance easier, in practice several of the exchanges were either not ready in time or broke down soon after they opened due to high usage, making a bad first impression. Moreover, not all states set up exchanges, and the citizens of those that did not had to rely on a website set up by the federal government instead, which also had problems.

Second, the ACA made changes to how insurers could set up health insurance plans. They could not discriminate based on pre-existing conditions, age, gender, and several other factors. All plans now had to cover a set of preventative medical care services, such as one annual check-up with your doctor. The ACA created bronze, silver, and gold tiers that categorized plans based on their coverage and their cost.

Third was Medicaid expansion. Medicaid is a federal program that provides health coverage for the poor. The ACA allowed each state to choose whether they wanted to make more of their residents eligible for Medicaid coverage. This would cost more, but the federal government promised to help contribute to the expenses of states that agreed to the expansion. So far, some states have agreed and others have not- in general, liberal states chose the expansion and conservative ones didn’t.

Fourth, and perhaps most controversially, the ACA has an individual mandate. The mandate requires Americans to have health insurance coverage. If they do not have insurance, they can face a fine every year. This is designed to ensure that everyone shares the cost of insurance and medical care, rather than only those who are already sick signing up. If that happened, then the cost of insurance would rapidly increase out of control.

ACA Problems

Each of those key characteristics of the ACA has led to problems. As mentioned above, the exchanges had computer glitches that made it hard to sign up for them and use them to search for insurance. The ban on charging people different prices if they had pre-existing conditions or were older meant that more people paid the same price, but that average price increased. Insurance companies had to increase prices on everyone because they could no longer charge more for the people who used insurance more. That spread out the increased cost of using medical care over all customers. Moreover, the impact of setting minimum standards for insurance plans combined with the restrictions meant that many insurance companies now have a hard time making any profit, leading them to stop offering any qualifying insurance plans in some markets.

The Medicaid expansion policy was controversial on its own, because conservatives were upset that the bill expanded an entitlement program and liberals were upset that it was optional. Finally, the individual mandate was controversial, but it was necessary to keep insurance markets from collapsing. All of these forces made the ACA unpopular.

Repeal and Replace

President Trump campaigned heavily on a promise to repeal and replace the ACA with something else. Without going into details, he promised to create a bill that would appease both sides and lead to cheaper, better care that was accessible to all Americans. This fit in neatly with the themes of many Republican politicians in the past several years, who have repeatedly pushed for repeal of the ACA.

However, the repeal and replace approach ran into problems. The GOP does not have enough seats in the Senate to fully repeal and replace the ACA, so they had to resort to creating a large amendment to the original bill that would alter it. This limited what they could do. Moreover, they had to create a compromise between conservative and moderate Republicans to ensure the bill would pass. The amendment bill was kept secret for a long time while they worked on the details. When it was revealed, both conservatives and moderates were very unhappy with the compromises it contained. The general public was also deeply skeptical of the bill. They were concerned that it would roll back too many of the popular elements of the ACA or cause too much disruption. The amendment failed because too many Republicans promised to vote against it.

Now, the future of repeal and replace is in doubt. Trump has promised to “let Obamacare explode” and work on other things for a while before returning to health care. It is likely that it will be at least another year before the GOP attempts to take on the ACA again.