Trumpcare is Dead--What's Next for Obamacare?

The American Healthcare Act is dead, and the Affordable Care Act lives on. What will happen now? 

This article won't be an intrigue piece about how the GOP will lick its wounds and try to circle back for another run at "repeal and replace." (And frankly I don't think they'll be ready for another attack anytime soon.) More interesting, perhaps, is looking at what will happen if we leave Obamacare alone. So I did some research into the Congressional Budget Office, and here's what I found:

 

  • Over the next 10 years, the 28 million uninsured people in the US will remain unchanged. Obamacare reduced the portion of uninsured Americans by 1/3, mostly with a medicaid expansion (covering 12 million new people now, and up to 17 million by 2027). Of the 2/3 remaining, the CBO is not predicting Obamacare will get them covered.
  • Over the next 10 years, the percentage of gross domestic product spent on government subsidization of health care will increase from 5.5% to 6.9%. Graph below.
  • Some may consider the real question to be this: regardless of who's paying for it, what do total costs look like nationally? Current projections through 2025 have costs increasing at 4.7% per person per year. With a very generous prediction of 4.2% GDP growth per year, that would put total national healthcare spend at 20% of GDP, up from 17.8% now. Some other academics have similar numbers
  • And CBO's long-term estimates show this cost growth rate accelerating, rather than decelerating, through 2050. 

So How's the ACA Doing?

The Affordable Care Act was designed to rein in US spending on healthcare, and increase coverage. It's done some of the latter, bringing down the uninsured rate from about 19% to about 12%. 

Some of what's held it back is that about 40% of young/healthy people eligible for a health insurance subsidy (and meant to be pressured by the mandate penalty) have signed up out of the 75% targeted, so they're not adding into the pool and bringing down cost per person. The number of insurers in the exchange is dropping, and premiums have continued to rise every year, no slower than before the ACA was implemented. The Obamacare marketplace monthly rates have gone up 7.5% and 25% per year the last two years. It's unlikely this will doom Obamacare in the short term (in part as that 25% jump was likely one-time). 

Looking to the future, assuming the ACA doesn't lose too many insurers (and thereby leave some regions without options on the exchange): 28 million uninsured will remain uninsured, and healthcare costs will continue to outpace GDP. The US already spends a whole lot more than everyone else per person, and that gap will continue to grow, probably without catching up in life expectancy or other health outcomes. 

This discrepancy might not be due entirely to the way we pay for healthcare, but presumably it means there is opportunity to spend less for the same outcomes, and certainly the popular opinion is we pay too much. The ACA will not arrest cost growth, nor will it cover the other 28 million Americans.

Should it be left alone? Get tweaked? Replaced? That's a complicated question, and hard to get right as we can't even agree on whether $800 billion or $50 billion is spent per year on defensive medicine. Bernie Sanders says a Medicare for all plan would save $6 trillion over 10 years. If we found some way to pay as much for our own health care as we pay for our dogs', we might be able to reduce costs by 2/3 or more. 

So what do we do? I'm not an expert enough to tell you that. But however you felt about the GOP's Obamacare replacement plan, you now know what'll happen if there's no change to the law. If I were to give any advice, it would be to research where the cost savings opportunities are, and why they're there, before committing to supporting one plan or another.

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Erik Fogg

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