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Donald Trump got a standing ovation in the US Congress this month when he declared it was time to “repeal and replace” Obamacare, the Affordable Care Act (ACA) of predecessor Barack Obama. But the task is proving far more difficult than the US President expected.
“Nobody knew healthcare could be so complicated,” he remarked recently, sparking alarm that this reality, which most politicians in Washington have known for decades, is only now sinking in for the President.
After all, it took nearly 50 years of congressional efforts to get as far as the ACA in 2010, in what was the biggest ever overhaul of America’s healthcare system.
Within hours of being sworn in on 20 January, Trump took his first step to roll back the ACA by signing an executive order that weakened and undermined the Act by dismantling some of the regulations surrounding it.
The Journal of the American Medical Association (JAMA) expressed its concerns just days before. “Trump’s triumph in the 2016 presidential election marks the beginning of an uncertain and tumultuous chapter in US health policy. In the election’s aftermath, the immediate question is this: Can Republicans make good on their pledge to repeal Obamacare? The Affordable Care Act has persisted largely thanks to President Obama’s protection. With Trump in the White House and Republicans maintaining House and Senate majorities, that protection is gone.”
The ACA is by no means perfect but its achievements are impressive by any standard. Apart from covering millions more Americans, including those with pre-existing conditions, millions of young people have also been able to stay on their family’s health plan until the age of 26, seniors are saving hundreds of dollars a year on their prescription drugs, while preventive care like mammograms for women and wellness visits for seniors are covered free of charge.
But now Republicans, who have railed against the ACA for years, have secured power in both Houses of Congress as well as the White House and want to fulfil their pledge to repeal and replace the Act, which they tend to regard as government over-reach into the healthcare business by making insurance more affordable and accessible.
But as the realities of office sink in and the demands of constituents become more vocal, Trump and his party are realising that populist slogans are one thing but implementing such populism is far tougher. While axing the ACA is sparking growing opposition, the real battle is centering on what to replace it with and the problem for Republicans is that they have a paucity of ideas on what to offer Americans in its place.
The party is even encountering growing division among its own members on the best way forward. Some in the party want to end Obamacare’s system of penalties and subsidies but others, apparently including Trump, want to continue to ban insurers from denying coverage or sharply increasing premiums for the sick.
Well-funded lobby groups are essentially running the show and powering an agenda in Congress that protects their interests
Democrats are upping the pressure, saying that if Obamacare is repealed by the Trump administration the President will “make America sick again”. It’s a mischievous play on Trump’s election slogan that he would “make America great again”. Yet the Democratic line has a strong ring of truth to it when one examines what will happen to millions of Americans now insured under the system — some 20 million will no longer be covered and could face bankruptcy if they fall ill. Or, in the world’s wealthiest democracy, some could die.
Forty-four million people were uninsured until the ACA was passed in 2010. Today, it has covered over 20 million and, for the first time in history, more than 90 per cent of Americans are now insured and pre-existing conditions are covered.
It’s hardly surprising, then, that Americans are becoming increasingly angry that the benefits of the ACA, which have become a lifesaver, literally for some, could be taken away. If people lose cover and have no viable alternative option, Trump’s fellow Republicans fear a backlash, especially with congressional elections just two years away. If the President gets it wrong he knows that he, too, could suffer the fallout in 2020.
To understand why the repeal issue is sparking outrage for many and uncertainty for others, it’s necessary to first understand the political context surrounding the ACA. While it’s primarily about affordable health insurance premiums and covering pre-existing conditions, the ACA has also become mired in the bitter ideological divide of US politics.
For their part, most Democrats see a central role for the federal government in ensuring access to healthcare for all, while most Republicans see such a role, with its attendant subsidies for the poor, as akin to ‘socialist’ interference in the business of health insurance companies.
To supporters, Obamacare is all about progressive politics; to opponents, it’s all about government interference with a hint of socialism
This also explains why the ACA was so difficult for former President Obama to get across the line in Congress and why, even when it became the law of the land, Republicans kept challenging its constitutionality in the courts.
Meantime, however, Americans became firmly attached to it, despite its shortcomings, and Republicans are now finding their repeal pledge difficult to implement, even with the White House in their corner.
It’s often a mystery to those looking at American healthcare from the outside how the wealthiest democracy in the world, which spends more on healthcare than any other country, has such poor returns for its citizens and fails to offer them affordable insurance that guarantees peace of mind and won’t bankrupt them.
The explanation is fairly simple. Well-funded lobby groups are essentially running the show and powering an agenda in Congress that protects their interests, much like the gun rights lobby does by blocking gun-control measures.
Running for political office in America is very expensive, so politicians, both Democrats and Republicans, accept the support and largesse of lobby groups. But such support comes at a price.
In return, the lobby groups tend to get a good return on their investment by finding a sympathetic ear when legislation is being written and passed.
Cost of healthcare
The issue of the cost of US healthcare is something about which every Irish visitor to America is aware and few would think of travelling there without hefty health insurance to cover any accidents or emergencies. Americans, too, are painfully aware of this.
Annual premiums reached $18,142 (€17,250) in 2016 for an average family, according to the National Conference of State Legislatures. That works out at $1,500 per month. However, more than half the population of America, or about 156 million, have health insurance cover through their own job or a family member’s job. In some cases, the employee contributes a certain percentage of their salary towards the premium.
Millions of others who don’t have insurance through an employer are covered through government programmes like Medicare for the elderly and Medicaid for the poor. Medicaid was expanded under the ACA, adding 11 million Americans to the rolls.
The ACA is primarily aimed at those who don’t fall into any of these categories. It makes their insurance affordable with subsidies from the federal government. Premiums are still rising, however, and will cost an average of 22 per cent more in 2017 than in 2016. This is because some insurance companies either left the market or have raised their prices sharply to cover the cost of the expensive medical care that so many people are now receiving under the law.
However, the Health and Human Services Department says that 72 per cent of consumers in states using the HealthCare.gov website for the ACA programme will be able to find plans with a premium of less than $75 per month and 77 per cent will be able to find plans with premiums below $100, taking into account financial assistance.
Thus, what the ACA essentially did was to bring millions locked out of cover into a safety net for the first time. Imperfect though it may have been, it was a bold and in many ways revolutionary move because it brought the federal government front and centre into the provision of healthcare cover. And that is now where millions of Americans, particularly Democrats, want the government to remain, while many Republican supporters want it out.
That is the context in which the battle over the ACA has been and continues to be fought and why it is such a volatile issue. To supporters, Obamacare is all about progressive politics; to opponents, it’s all about government interference with a hint of socialism. American patients will be the losers in this battle, particularly the very ill and the very poor, who will either be unable to get coverage because of a particular illness or because they cannot afford it — or both.
Increasingly, it is being said by experts that people will die without the protection of the ACA. If Congress changes or repeals the law, found a study by JAMA Internal Medicine, the adults at risk of losing insurance are more likely to be minorities, poor and unemployed, with less educational attainment than those with employer-sponsored insurance.
So, with Donald Trump’s election, the issue is a defining one for his presidency. The President hasn’t yet shown his full hand, but in his address to Congress on 1 March, he said he wanted “reforms that expand choice, increase access, lower costs, and at the same time provide better healthcare”. But he offered no specifics, nor did he suggest a price tag.
So far, little has changed since his vague promises on the campaign trail last year, when he said he wouldn’t let anyone “die on the streets” and that Americans could expect that healthcare in a Trump administration would be “beautiful” and “terrific”. “I am going to take care of everybody,” he said. “I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.”
More recently, he pledged “insurance for everybody”, but congressional Republicans have now begun talking about guaranteeing “access” to healthcare, rather than healthcare itself, meaning if individuals have the money to pay for insurance, they can get it.
President Trump said on 27 February that “costs will come down and I think the healthcare will go up very, very substantially. I think people are gonna like it a lot. We’ve taken the best of everything we can take”. He is also hoping to work with Republicans in Congress in formulating a plan. So far, not much progress is being made there either, although the broad outlines of their effort were revealed on 16 February by Republican House of Representatives Speaker Paul Ryan and subsequently the plan itself was formally announced on 6 March .
It would maintain coverage for people with pre-existing conditions and allow children to stay on their parents’ plans until the age of 26. However, its provisions appear far inferior to those provided by the ACA, shifting more medical costs onto families and covering far fewer people.
It calls for reducing spending on Medicaid, which now provides insurance to more than 74 million poor, disabled and older people. It would also mean that most people who don’t get their health insurance through an employer would pay more because it would slash subsidies provided under the ACA. Instead, it would allow families to save for insurance costs in health savings accounts, a move that would primarily benefit more affluent Americans. The plan provided no estimates of how many people would lose coverage or by how much premiums and deductibles would rise for middle-class and poor families.
Meanwhile, a consulting firm told US governors that the plan could lead to millions losing their coverage, with many people covered under the Medicaid expansion suddenly unable to afford insurance. The effect of the replacement bill, the governors were told, would be huge enrolment losses and greater budget pressure on states, in order to make up the loss in federal money for Medicaid expansion.
But ACA supporters are not giving up without a fight and polls are increasingly favouring them. On 23 February, the Pew Research Centre released a survey showing majority approval for the law for the first time since it was passed in 2010. A Fox News poll also found that 50 per cent of survey respondents felt favourably towards the law, up from 41 per cent the last time they polled in 2015.
A poll by the Kaiser Family Foundation, which specialises in healthcare issues, found that an overwhelming majority of people disapprove of plans to repeal the law without having a ready replacement for it. A total of 75 per cent said they either want lawmakers to leave Obamacare alone, or repeal it only when they can replace it with a new healthcare law. Twenty per cent of those polled said they want to see the law killed immediately.
Prof John Cawley, Cornell University
When the Foundation took the pulse of Trump’s own supporters in focus groups, it found widespread concern about losing coverage. They wanted repeal and replacement of the ACA to happen at the same time. Several key themes emerged about what they wanted in a replacement plan: More affordable coverage with both lower premiums and deductibles; access to a broad range of doctors and hospitals; greater transparency about what their plan covers and what services would cost; and continued coverage of pre-existing conditions.
Repealing the ACA will also threaten access to preventive care, according to Prof John Cawley, Co-Director of Cornell University’s Institute on Health Economics and an honorary Professor at NUI Galway, who outlined his concerns in an interview with the Medical Independent (MI).
Prof Cawley studied the impact of the ACA on preventive care and found that one of the more controversial features of the law — the state-level expansions of Medicaid — improved preventive care among low-income Americans and yielded other benefits to this vulnerable population.
“The expansions of Medicaid promoted by the Affordable Care Act have had numerous benefits. They provide low-income individuals with health insurance coverage and access to care. They are also increasing some forms of preventive care, such as dental visits,” he said.
“One might be concerned that, if people know that if they get sick then most of their costs will be covered by insurance, they would take less care of themselves or take more risks. We don’t find any evidence of that kind of moral hazard with respect to smoking, heavy drinking or lack of exercise.
“If the entire ACA literally disappeared and there was no replacement, we’d see millions of people lose health insurance,” Prof Cawley emphasised. “We’d see decreases in preventive care. Down the road, that would mean more people would be sick and the healthcare system would be more burdened.”
‘We don’t find any evidence of that kind of moral hazard with respect to smoking, heavy drinking or lack of exercise’
He believes that, faced with the complexity of the issues and the potential political fallout, Congress will not go for a full repeal of the ACA. “ I suspect, given the complexity of the issues, that they will not choose to repeal the ACA in its entirety. Instead, they will likely weaken the ACA in various ways, such as reducing the set of benefits that all health insurance plans must cover, like preventive care and birth control, reduce eligibility for Medicaid, reduce subsides for lower-income people to buy health insurance and repeal the individual and employer mandates, with the result that healthier people will likely cease buying insurance, causing premium hikes and possibly a ‘death spiral’ in prices.”
Such steps would be counter-productive financially and in terms of better healthcare, he believes. “You know the saying, ‘penny wise and pound foolish’. Well, to cause millions of people to lose their health insurance and to decrease coverage of preventive care would be ‘penny foolish and pound disastrous’ — people’s health would be worsened immediately, their exposure to financial risks greatly increased, and it would likely raise healthcare costs in the long run because people would get less diagnostic screening, preventive care and basic care.”
The requirement that insurance companies cover contraception at no cost is also at risk because of opposition from the new Secretary of the Department of Health and Human Services, Dr Tom Price, a former orthopaedic surgeon who took over on 10 February after his confirmation by the Senate. He authored a 2015 replacement bill that would have eliminated many of Obamacare’s broad health benefits and he supports drastic cutbacks in funding for both Medicare and Medicaid.
The American Medical Association (AMA) backed his nomination for the job but thousands of other doctors made it clear they did not agree with the AMA. “We see first-hand the difficulties that Americans face daily in accessing affordable, quality healthcare,” wrote a group of more than 6,000 doctors in an open letter opposing Dr Price’s nomination. “Dr Price’s proposed policies threaten to harm our most vulnerable patients and limit their access to healthcare. We cannot support the dismantling of Medicaid, which has helped 15 million Americans gain health coverage since 2014. We oppose Dr Price’s proposals to reduce funding for the Children’s Health Insurance Programme, a critical mechanism by which poor children access preventive care. We wish to protect essential health benefits like treatment for opioid use disorder, prenatal care and access to contraception.”
Dr Price opposed the contraception mandate as a member of Congress and now, in his new post as Health and Human Services Secretary, he could take aim at the regulation again during the effort to repeal and replace the ACA.
Reversing the birth-control mandate would not necessarily require an act of Congress. Price’s department could issue a regulation excluding birth control from the list of women’s preventive health services that insurers must cover with no cost-sharing. The Republican Congress could also abolish the mandate by including a provision in Obamacare repeal that does away with the requirement that insurers cover preventive care for free.
According to the National Women’s Law Centre, 55 million women receive contraceptives like IUDs through their insurers with no out-of-pocket costs. A 2015 poll by The Washington Post and the Kaiser Family Foundation found the vast majority of Americans support the requirement — 71 per cent to 25 per cent.
Meanwhile, Republicans continue to face angry crowds at some constituency meetings, where people have expressed their outrage at possibly losing health benefits. Some law-makers have even cancelled meetings to avoid angry constituents. The AMA has also come out against the plan.
Against this background, Trump seems to be getting increasingly wary of his party’s plan and may push to repeal fewer aspects of the ACA, as Prof Cawley suggests, and repair others. He knows, despite his criticism of Obamacare, that the more endangered the law looks, the more Americans are becoming attached to it and are increasingly making their views known.
Now that a plan is on the table, the goal for Republicans in the weeks ahead will be to convince enough members to support the bill so that it will ultimately get the necessary 218 votes to pass in the House of Representatives and 51 in the Senate and then they will need to make sure that Trump will sign it into law.
Trump and his Republicans see that they have two choices, as The Washington Post opined recently: “They can snatch health insurance away from millions of people, or they can replace Obamacare with something that looks suspiciously like Obamacare with a different name.”
Indeed, at the end of the day, such a name-change may be all that many of its opponents really want: Exit Obamacare.