John Feehery: Speaking Engagements


Throw the Affordable Care Act Back to the States

Posted on January 18, 2017
Throw the Affordable Care Act back to the states.

United States Map

Republicans are struggling with how to replace the Affordable Care Act after they repeal it.

Some want to tinker around the edges, keeping the mandate on pre-existing conditions and allowing kids to stay on their parents’ health care until they turn 26.

Others want to pull it out by roots and in its place plant some free-market concepts that they hold will grow a full-blown workable marketplace by the time they face the voters again in two years.

The Central Problem

The central problem with Obamacare and its exchanges, for those who want to completely dismantle the program, is that the 20 million users who have health care insurance through the many exchanges are relatively happy with it. They just don’t want to pay the escalating prices.

Many of those 20 million customers are also Red State constituents and, while they may not love Obamacare, they will hate if they are thrown off of it.

If there were an easy solution to the problems facing the president’s signature legislative accomplishment, the Republicans would have run with it. Sadly, it’s a complicated law that will require complicated procedures to dismantle it.

Elements of Obamacare

The elements of Obamacare include mandates on individuals (pay a penalty or buy insurance), mandates on insurance companies (they have to insure anybody no matter what their current health situation is, can’t kick anybody off no matter how expensive their problems are, and they have to give free contraception to anybody who asks for it), an online marketplace where consumers can theoretically shop for whatever health insurance fits their needs. The law also gave huge subsidies to states that expand their Medicaid programs (some Republican governors have refused the money, while others have accepted it).

It’s the guarantee issue promise (the idea that anybody that can get insurance no matter what their physical condition) has driven up costs for everybody else and made it less likely that health insurance companies are going to participate in Obamacare. Getting rid of that promise, though, is very difficult. Donald Trump has said that’s the one thing he would keep in the program and Republican leaders know how popular that provision is and how hard it would be politically to take away that promise.

I don’t have the perfect solution to the guarantee issue conundrum. Nor do I have the the perfect solution to replacing the entire program with something better.

Throw it Back to the States

In situations like this, I think it is far better to throw it back to the states and let them figure it out.

I would suggest that as Republicans repeal the Affordable Care Act they replace it with block grants to the 50 laboratories of innovation and let them come up with better solutions that appeal to their constituencies.

If some states want to recognize same-sex marriages in their health care plans, go for it. If they want to pay for contraceptive coverage, sounds fine to me. If they want to set up high risk pools, with more subsidies from the state based on the Federal block grant, that could potentially work.

Obamacare Exchanges

The Obamacare exchanges, because they had so many mandates that came from liberal constituent groups, were overloaded and have proved to be less than stellar in their performance. Insurance companies, not seeing the potential to make any profits, have shied away from them and, at times, have completely abandoned them.

The result has been a lack of competition among health insurance providers, higher premiums, lower quality of health care, and general anger at the law.

I would give the maximum flexibility to the States to allow them to implement their vision of affordable health care. But I would also give insurance companies the ability to sell their products across states lines, and give small businesses an opportunity to join together in associations so they can bargain better to drive down costs.

At the federal level, I would give individuals far more power to buy health savings accounts, which ultimately give the consumer more power to get a better product at better prices.

But most of the innovation should be done at the state level. If Republicans are going to repeal Obamacare, they should replace it with a state-based system that gives the governors the maximum flexibility to create a better health care marketplace for their constituents.

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