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Trump & Obamacare: What Does Repeal & Replace Really Mean?

By Chuck Alston, SVP, Director of Health Policy and Public Affairs, QORVIS MSLGROUP

A pledge to “repeal and replace” Obamacare was the Trump campaign’s central message on health care. While the catchphrase captures the discontent many feel about the U.S. health care system, what a slogan can’t capture is the hard road that lies ahead for the new president and Congress as they seek to make good on Donald Trump’s promise.

The “repeal” part alone is hard enough, for Obamacare is far more than an insurance scheme. Rather, the Affordable Care Act (ACA) was 2,000 pages of legislation that touched on every aspect of health care access, delivery and payment, not just the insurance exchanges and subsequent premium increases that have become its flash point.

Moreover, the ACA is now six years in the making, touching millions of lives with its expansion of access to insurance through the exchanges and Medicaid, and influencing how billions of dollars are spent with doctors and health care systems, so it will require more scalpel than sledgehammer to repeal it. More importantly, repeal would not address the underlying fundamentals that spurred the ACA in the first place: high cost health care delivered through a broken delivery system.

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But if repeal is hard enough, “replace” is even harder. Trump promised during the campaign only that “something terrific” would take Obamacare’s place.

Here’s what we know so far:

A Trump transition team statement outlines a thin plan, proffering solutions such as special insurance pools for high-risk, high-cost patients and cross-state sales of insurance policies that, depending on which analyst is talking, are at best unproven and at worst have demonstrably failed. It calls for:

  • expanding the states’ role in running the Medicaid health-insurance programs for the poor
  • eliminating the mandate that individuals buy health insurance or pay a penalty
  • allowing individuals to “fully deduct health insurance premium payments from their tax returns” and use tax-free Health Savings Accounts (HSAs) that would be allowed to accumulate and pass on to heirs

The president-elect told The Wall Street Journal he will maintain popular features such as preventing insurers from denying coverage because of patients’ existing conditions and permitting parents to provide coverage for their children up to age 26.

The plan doesn’t address the rising cost of prescription drugs, leaving out suggestions Trump made during the campaign trail, such as allowing the importation of drugs or permitting Medicare to negotiate drug prices.

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What the plan doesn’t address is far more important, including the central question of what to do about the 20 million people who get their coverage through Obamacare, as well as the plethora of changes in the underlying structure of how the country pays for and delivers care.

When it comes to coverage, Trump and the Republican Congress are unlikely to toss 20 million people overboard without replacing their coverage – and what they try to replace it with will be subject to an intense political fight on Capitol Hill, where Democrats still have a say in the Senate.

As for delivery and payment reform, Medicare has been at the forefront of efforts to reward hospitals and doctors based on the value of the services they provide instead of the traditional volume-based system, an initiative called “value-based purchasing” that is designed to improve outcomes, improve the overall health of the population and reduce costs.

Trump could eliminate or tinker with the thousands of pages of regulations the Center for Medicare & Medicaid Services has issued to implement this change. Nonetheless, payers such as large employers, labor unions and states were fed up with the payment and delivery system before Obamacare came along, and they are likely to continue pushing for change no matter what happens in Washington.

While the bottom line won’t come into view until at spring, there are two things to keep in mind for the time being. First, the stakes could not be higher. At 17.5 percent of GDP, health care is now a $3 billion slice of the economy, guaranteeing a mad scramble as insurers, hospitals, doctors, device makers, pharmaceutical companies, and other stakeholders fight to protect or increase margins, and employers and consumer advocates seek to manage their costs. Second, add the word “revenue” after the words “repeal” and “replace,” and you get a clear picture of how self-interest that will govern the fight ahead. In other words, repeal his revenue, and don’t replace it with mine.

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Chuck is an expert in healthcare policy and has worked as executive director of the Democratic Leadership Council. He was a Nieman Fellow in Journalism at Harvard. chuck.alston@mslgroup.com

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