Jonathan Cohn

Repeal and Replace, Without the Replace

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“Repeal and Replace"the slogan is as meaningless as it is catchy. The Republicans have zero intention of replacing the Affordable Care Act with a law that would make insurance available to everybody, regardless of income or pre-existing condition. That was obvious before an article that appeared in Politico on Thursday. It’s even more obvious now.

The story, by Jake Sherman and Jennifer Haberkorn, focuses on how Republicans would react if the Supreme Court overturns part or all of the Affordable Care Actor, failing that, if Republicans get full control of the federal government after the November elections. It’s consistent with what other journalists, including The Hill’s Sam Baker as well as Robert Pear and Jonathan Weisman of The New York Times, have reported: The Republicans won’t try to pass sweeping reforms. At most, the Politico story explains, Republicans might

draw up bills to keep the popular, consumer-friendly portions [of the Affordable Care Act] in place like allowing adult children to remain on parents’ health care plans until age 26, and forcing insurance companies to provide coverage for people with pre-existing conditions.

That last part (the one I’ve bolded) might sound significant. And it would be if Republicans were seriously thinking about that goal. But they almost surely aren't. Most likely, they are probably discussing an idea that Mitt Romney and other leading Republicans have been promoting: Making sure that people who have pre-existing conditions and already have insurance can keep it, even if they switch jobs.

That distinction is critical.

For one thing, lots of people end up temporarily uninsured because they lose their jobs or get divorced, for example, or because they can’t keep up with premiums. A plan guaranteeing coverage only for people who have it already would not help them. More important, making that sort of guarantee, on its own, turns out to be very difficult. We know this because the federal government already tried it, in 1996, when President Clinton signed the Health Insurance Portability and Accountability Act (HIPAA).

The impetus for that law was an effort to salvage something, even something modest, from Clinton’s failed attempt at comprehensive reform. But the law was not very effective. Karen Pollitz, who knows more about the individual insurance market than just about anybody and who now works at the Kaiser Family Foundation, wrote about HIPAA’s problems in 2005:

HIPAA requires nongroup coverage to be offered to eligible individuals … However, there is no limit on what insurers can charge under HIPAA. Some states regulate HIPAA premiums, but in those that do not, the cost can be prohibitive. HIPAA also does little to regulate the content of coverage, leaving the door open to insurers to offer bare-bones policies. In addition, HIPAA notice requirements are weak, making it hard for people to know about this protection.

Could the Republicans decide to bolster HIPAA, by closing these loopholes and genuinely requiring insurers to cover people with pre-existing conditions? Sure, but it would mean significantly strengthening regulations on the insurance industry. And if the regulations were successful, then the mix of people seeking insurance would change: People with serious medical problems would be more likely to enroll, since coverage would finally be available to them, while people without medical problems would be less likely to enroll, since they could always wait until they were sick. Premiums would rise, inducing more healthy people to drop coverage and eventually sending insurers into what’s known as the “adverse selection death spiral.” The only way to stay out of the death spiral would be to create a system that also included some combination of subsidies and financial penalties for non-enrollmenti.e., a mandate. 

Getting the picture here? As economists and health policy experts have said all along, the only way to make coverage available to everybody, short of creating a single-payer system, would be to recreate Obamacare or something similar to it. And that's not going to happen. According to follow-up that Sherman filed with Politico on Thursday, conservatives were furious that House leadership would contemplate replacing the Affordable Care Act with anything that looked remotely like it. In response, aides to Boehner quickly communicated the Speaker’s intention to “knock down” the rumor of such intentions.

For more on this story, by the way, see Jonathan Bernstein and Brian Beutler, both of whom were all over it on Thursday. 

follow me on twitter @CitizenCohn

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