Partial Obamacare Repeal Implications

17th Jan 2017

Speaker Ryan, we have a problem.  Anyone who pays even only marginal attention to health policy issues knows that when political rhetoric and policy implementation meet, it can be like worlds colliding.  This was indeed the case today in Washington as the Republican Leadership continues to shop Affordable Care Act repeal proposals… (for those not paying attention at all, and there are many, The Affordable Care Act is the same as Obamacare… but I digress)… and the nonpartisan Congressional Budget Office (CBO) responds to those proposals.

One such proposal has been to repeal only portions of the law (the mandate portions and some funding provisions).  This, while still a bitter pill, provided some solace to the Obamacare loyal in that they would not lose the whole thing.  In stepped the CBO once more unto the breach, dear friends.

In the report released today, How Repealing Portions of the Affordable Care Act Would Affect Health Insurance Coverage and Premiums  the CBO made it quite clear:

  • The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the repeal legislation and rise to 32 million by 2026.
  • Premiums in the nongroup market (for individual policies purchased through the marketplaces or directly from insurers) would increase by 20 percent to 25 percent—relative to projections under current law—in the first new plan year following enactment… doubling by 2026.

The CBO acknowledged that the way in which consumers and health care providers would react to the new law is unclear and so the estimate is more of an educated guess.  Promising?  Not so fast.  The CBO further clarified, because of this uncertainty, their estimate is in the low to middle of the possible range.  In other words, the estimated numbers above could be significantly understated.

The repeal, H.R. 3762,  would basically make two changes.  Upon enactment penalties would be eliminated related to requirements that people have health insurance (individual mandate) and that the employer mandate, where employers are required to offer health insurance to employees, would also be eliminated.  The second change would be the elimination of Medicaid expansion eligibility along with the subsidies in the second year of implementation.  Both these changes, says the CBO, would have a chilling effect on insurers, reducing those who would offer plans and as such, reducing the people who could find coverage (if they could afford it).

The CBO stated it this way, “In total, as a result of reduced enrollment, higher average health care costs among remaining enrollees, and lower participation by insurers, CBO projects that premiums in the nongroup market would be about 50 percent higher in the first year after the marketplace subsidies were eliminated—relative to projections under current law—and would about double by 2026.”

With such impact under only a partial repeal, the mind boggles at what a total repeal might look like.  Thank goodness, the President Elect promised us this weekend that he would guarantee health insurance for all.  Once again, unto the breach.

Thomas Valentine

Texas Insight