Policy Experts Explain the Trouble with Repeal and Replace

February 22, 2017

While GOP congressmen have promised to repeal and replace the Affordable Care Act, two policy experts say it won't be that easy.

Repeal and replace is easier said than done.

That was the wisdom of two leading health policy experts as they debated the past, present, and future of the Affordable Care Act (ACA) this week at the annual Healthcare Information and Management Systems Society (HIMSS) conference, held in Orlando.

Jonathan Gruber, Ph.D., professor of economics at Massachusetts Institute of Technology and ACA architect with the Obama administration, was joined by Yevgeniy Feyman, a fellow at the Manhattan Institute, a policy research organization, to give an overview of the challenges in repealing and replacing the health law. They also discussed the merits of the ACA, a collapse of the insurance market, and much more in an hour-plus session.

Gruber didn't mince words when asked to predict the road ahead for an ACA replacement. "It was a hard process to pass the Affordable Care Act. It was a year-plus process with a filibuster majority. I honestly don't see a replacement. I don't see how Republicans get enough Democrats to switch over, [and] not filibuster the law. You can't replace through direct reconciliation, you can repeal, but not replace. I honestly don't see it replaced," Gruber said.

Feyman was a little less skeptical, saying the plan proposed by Senators Susan Collins (R-Maine) and Bill Cassidy (R-La.), which allows states to go their own way with the ACA is potentially more "palatable." However, he also said he didn't think a repeal was going happen as enough Republicans will get on board.

The fact that every replacement plan proposed by Republican congressmen increases the uninsured is a significant roadblock, Gruber said, adding that repealing the law outright would cause 32 million to lose health coverage. There are 20 million who picked up insurance through the law and 12 million more through a collapse of the insurance market, he said. He also noted that insurance premiums would double.

"This is what the [Congressional Budget Office] said, this is not biased Jon Gruber," he said. The CBO predicted that the elimination of the Medicaid expansion and insurance subsidies would cause up to 32 million to lose coverage by 2026.

Another problem with many replacement plans, Gruber said, is that none of them can address the "80-20 rule" more effectively than the ACA. This rule, he said, is that 80 percent of the health costs in the U.S. come from 20 percent of the population. "Those 20 percent of Americans cannot afford their health bills, and so the rest of us have to share in the costs. The question is how to pay for that sharing," he said. "You either have to cover fewer people or spend more money [than the ACA]."

The other potential problems with replacement plans, the policy experts said, was they could potentially roll back discriminatory markets and protections for people with pre-existing conditions. They also said there is uncertainty over what would happen to the ACA's various cost control demonstration projects, such as the bundled payments and readmissions reduction programs. Feyman said the ACA has helped reduce readmissions rates and hospital acquired infections through those programs, but he isn't sure if those numbers have plateaued or can keep going down.

Did the ACA Work and the Path Ahead?

At the beginning of the session, Gruber and Feyman went over the merits of the Affordable Care Act. Gruber, who once made controversial remarks about the public not understanding the intricacies of the ACA, said the law has worked from a policy standpoint, but not politically. He said it achieved in insuring more people, it got rid of the discriminatory insurance market, and helped control health costs. The last point is a bit controversial, he admitted, since premiums have gone up 22 percent since the ACA.

"Healthcare costs have slowed [in growth] since the ACA [was enacted]. We don't know how much of that is from the ACA, but if the ACA gets 10 percent credit for it, it would be the single biggest cost saving legislation in the history of our country," Gruber said. "The premiums that have gone up 22 percent aren't the premiums most of us pay." Later during the Q&A portion of the session, a few attendees openly questioned Gruber over his claims about the ACA being able to control costs.

Even though neither Gruber nor Feyman saw any kind of major movement with the ACA and say it would be "very poor policy" to just repeal the law without a replacement plan, they understand that doesn't mean it won't happen.

"It's not just projection … it's a proven fact that if you pull out this mandate and [other ACA provisions], you're going to see a collapse in the insurance market. Where I'm not as confident is the political price [the GOP] would be willing to pay for that. Six months ago, I'd think they could never done that," Gruber said. "Does the fact that this could lead to a market collapse mean they won't do it? Not necessarily."

In these uncertain times, Gruber and Feyman shared their advice for healthcare provider organizations. Gruber said administrators have to "engage their providers in a forceful way." Feyman said they have "stay the course to the extent that they can," while adding, "You have to operate separate from politics."