Yahoo Finance Obamacare accomplished something huge, even if it dies
If incoming president Donald Trump gets his way, Obamacare will be gone before long. But that doesn’t mean President Obama’s signature healthcare accomplishment will be vaporized. On the contrary: In at least one important way, Obama’s health reforms set a new–and high–threshold that Trump will be obligated to meet, no matter what he replaces Obamacare with.
The Senate has already begun the process of repealing the Affordable Care Act, which could be complete within a few months. Trump has said he wants to replace the ACA with something “terrific,” and do it quickly. But he hasn’t spelled out what the replacement should be. Republicans in Congress have been drafting plans that include things like tax incentives to make health insurance more affordable, and more competition among insurers, to help lower costs.
There are plenty of problems with the Affordable Care Act, passed in 2010. It did little to control healthcare costs borne by many ordinary Americans, who pay a growing portion of their paycheck for medical care. It added additional layers of complexity to an already convoluted healthcare system. And it forced some Americans who were content with affordable coverage to pay more for a suite of healthcare provisions they don’t need.
But Obamacare, as the ACA is known, also led to a historic jump in the portion of Americans covered by some kind of health insurance, protecting them from financial ruin due to healthcare costs. Before the law went into effect, the uninsured rate was 18%, according to Gallup. It has since fallen to 10.9%. That’s a giant improvement regarding a problem that seemed intractable for decades. Here’s Gallup’s data since 2008:
About 20 million Americans have gained insurance on account of the Affordable Care Act. Many are lower-income people who used to get care through emergency rooms, or forego preventive care until a dangerous, costly condition developed. The ACA also prevented insurance companies from denying coverage for pre-existing conditions, and allowed adult kids to be carried on their parents’ plans until they’re 26. Both of those measures are popular.
These are the bars Trump must meet with his still-unknown replacement plan. If he doesn’t, Trumpcare could quickly be deemed a bigger failure than Obamacare. The risk for Trump—as with Obama—is that a policy blessed by Washington policymakers flops among real people in the real world, victim to the perennial bugaboo of unintended consequences.
If Trump’s plan is indeed terrific, it needs to be terrific for everybody currently covered by Obamacare, not just for some of them. It’s possible to craft a replacement that improves on Obamacare, without causing hardship for anybody currently covered under the ACA. But that would be extremely tricky and would probably require new federal safety-net expenditures Republicans aren’t inclined to pass. If the replacement relies too heavily on free-market mechanisms and individuals seeking their own solutions, it could backfire by reducing the number of Americans with insurance, pushing more people back into ERs for routine care, and creating the impression Trump’s plan canceled coverage for people who had been covered under Obama.
What Trump can learn from Obamacare
There’s one huge lesson Trump ought to learn from Obama’s experience with the ACA. The single-biggest problem when the ACA went into effect was the cancelation of certain policies that didn’t comply with new requirements under the law. That forced some people who had bought policies in the so-called non-group market to buy more expensive policies and, in some cases, switch doctors—making a mockery of Obama’s notorious line that “if you like your plan, you can keep your plan.”
The portion of Americans who had to switch plans under the ACA was small—but their stories were compelling and media coverage created the impression that Obama was willing to hurt some Americans to help others. That’s one reason Obamacare limped out of the gate, and has remained unpopular. The ACA’s drafters aimed for an overall improvement in public health through expanded coverage, but they didn’t account for the political damage caused when the government looks like it’s trampling on some people’s rights—even if it’s a relatively small group of people.
If Trump’s plan covers some of the people who have benefited from Obamacare, but leaves others behind, he will be creating a pool of victims whose stories the press will pounce on. Meanwhile, nobody has yet come up with a solution for the other big healthcare problem, which is runaway costs for just about everybody—including the 180 million Americans covered by private plans that have nothing to do with Obamacare. Many Americans have blamed rising healthcare costs on Obamacare, even though that’s not the cause.
So here’s the bar for success Trump must meet: Leave everybody covered under Obamacare no worse off, and some of them better off. And lower costs for the majority of Americans not covered under Obamacare. President Obama is leaving his successor a very tall order to fill. That, Obama can consider a success.
Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman.
