President Donald Trump claimed he repealed the Affordable Care Act on Wednesday. But in striking down an important provision of the ACA in the Republican tax bill passed this week, Trump may have unwittingly helped solidify the law instead.
There was a significant benefit for Republicans in repealing the individual health-insurance mandate in the tax bill. The resulting savings on subsidies to millions of lower-income Americans allowed the Republicans to pay for more than 20 percent of their bill. Without this, it would have been much more difficult to pass massive tax cuts for corporations and choice items such as the estate tax threshold change. Republicans also have a rhetorical victory, bringing back a trophy to fulfill their anti-ACA promises.
But that benefit didn’t come without some significant costs. Trump and the Republicans have now taken ownership for driving up insurance premiums for millions of middle-class families who buy insurance on the ACA’s individual markets. The nonpartisan Congressional Budget Office estimates that premiums will rise 10 percent out of the gate in 2019.
Most people understand the logic of the individual mandate, even if they never loved it. If people think about their health-care needs before they get sick instead of waiting until they fall ill, it leads to a better, fairer system. Still, the mandate, requiring those Americans who can afford it to buy insurance or else pay a small fine, was never popular. President Barack Obama included it only grudgingly in the ACA after coming out against it. Like most people who study the issue, he was persuaded that having a mechanism to compel more participation would bring everyone’s costs down. Ironically, it may have also been a nod to conservatives who originated the idea.
When premiums rise on middle-class families, taking the blame is part of the deal Republicans have now made. And premiums will rise, particularly in rural areas or states with higher uninsured rates that didn’t expand Medicaid. In other words, a lot of Republican voters will be asked to pay the price.
Not only will Trump and the Republicans be blamed for raising premiums, but also they may have just solidified the rest of the ACA. First of all, most of the people helped by the ACA will see no change to their premiums. Those who earn under 400 percent of the poverty level (approximately $100,000 for a family, $50,000 for an individual) will be largely protected from the impact of these rate increases because of fixed subsidies. So when insurance premiums on these low- and moderate-income families go up, it will actually be the government, not the families, that will pay the bill. Because prices will stay stable for millions of Americans, it will ensure steady and constant demand for the ACA offerings.
In a larger sense, the Republicans’ rhetorical victory of cutting out the individual mandate will make the ACA - which is increasingly popular - even more popular. The individual mandate was the only aspect of the law that didn’t enjoy wide support among the public. The other components of the law - protecting preexisting conditions, ending lifetime caps, ensuring that certain benefits such as chemotherapy and mental health are covered by law - enjoy widespread popularity.
A more popular law will be a more challenging target to repeal. And already Senate Majority Leader Mitch McConnell, R-Ky., with an even narrower majority after the Alabama Senate race, is signaling that repeal may be a bridge too far.
So where does this leave us? It leaves us with two laws.
Call the first one Obamacare. It provides preexisting condition protections and other safeguards to American families. And for the millions covered under the Medicaid expansion or who have family incomes less than $100,000, it delivers affordable health-care coverage.
Call the second one Trumpcare. It exposes many - especially in rural areas and those who make too much for subsidies - to significantly increasing premiums, driven by the calculated decision from Republicans to get rid of the mandate.
This is damage to middle-class families that the Republicans should aim to quickly undo. Early next year, they should seek to pass some simple solutions that will bring down premiums and increase competition. They should pass a permanent reinsurance package - an extension of a current bipartisan Senate proposal. They should also consider an option introduced by Democratic Sens. Tim Kaine of Virginia and Michael Bennet of Colorado to allow Americans in areas where there isn’t enough competition to buy into something like Medicare. This will help attract Democrats and, more importantly, drive competition and lower premiums.
This year’s recently ended ACA enrollment period attracted unexpectedly high figures despite countless efforts to diminish it. The elimination of the individual mandate won’t alter the reality of coverage for millions. For people who are affected, the ball is in Republicans’ court, and the need for action is urgent.