The new option being considered by Senate leaders could plausibly be described as Obamacare repeal. But it would disrupt markets and raise premiums.
If the current options for overhauling the health care system can’ t get a majority of Senate votes, the majority leader, Mitch McConnell, has a new backup plan, according to senators and lobbyists: a simple bill that eliminates three of Obamacare’s least popular provisions.
The plan, which has been nicknamed “skinny repeal, ” would eliminate the Affordable Care Act’s individual mandate, the employer mandate and a tax on medical devices, at least for a few years.
The upside of such a plan: Those provisions are unloved. The individual mandate forces Americans who go without health insurance to pay a tax penalty. The employer mandate subjects businesses to a lot of paperwork requirements. The medical device tax hits an industry that has lobbying pull with many Republicans and even many liberal Democrats. A plan that eliminated only these three parts might be plausibly sold as Obamacare repeal, and it would avoid many of the more controversial policy changes in other G. O. P. proposals.
One prominent Democrat once endorsed a plan very much like Obamacare without mandates: Barack Obama, when he was running for president in 2008.
But, of course, there is a downside.
The individual mandate is unloved because no one likes being told what to do. But many independent analysts have concluded that, without a mandate, health insurance would become more expensive and cover fewer people. With the nudge of a mandate, more healthy people tend to buy insurance, reducing the average cost of coverage. Without one, the theory goes, mostly sick people buy insurance, and premiums rise to cover that sicker pool.
Fewer people would probably be covered under Medicaid, too. Over the last few years, signups for Medicaid have increased substantially, even among people who could have been covered before Obamacare expanded eligibility. Many of those people presumably didn’ t realize they qualified for Medicaid and first tried to buy private insurance because of the mandate, before learning that they could get Medicaid and not have to pay a premium. Without a mandate, fewer people are likely to find their way into the program.
The Congressional Budget Office thinks that eliminating the individual mandate would have substantial negative effects on the insurance market, raising prices and reducing enrollment. It is hard to imagine that more insurers would wish to participate in this smaller, sicker market than they do now. The budget office still needs to evaluate a skinny repeal bill, but it seems likely that the reductions in coverage from a mandate repeal would save the federal government enough money for the bill to comply with budget instructions.
It is worth considering these effects in the context of Republicans’ criticisms of Obamacare itself. On the Senate floor Tuesday, Mr. McConnell assailed the health law as building unstable insurance markets and providing too little consumer choice. A skinny repeal would probably exacerbate those effects.
President Trump has often criticized Obamacare as making insurance premiums too costly, with deductibles that are too high. Repealing the individual mandate would increase premiums and do nothing about deductibles.
Republican leaders have assailed the health law’s large tax increases. This bill would repeal only one tax.
Congressional Republicans have complained about Obamacare’s burdensome insurance regulations, which limit consumer choice. All of those would stay on the books under skinny repeal.
Republicans have also said they wanted to make structural reforms to the Medicaid program, as other health bill drafts would do. The skinny repeal plan leaves Medicaid as is, including its expansion under Obamacare to cover more poor adults. (This may be a plus for several moderate senators who were concerned about Medicaid cuts in the other bills.)
There has been a mismatch all along between many of the Republicans’ critiques of current law and the likely outcomes of their reforms. But earlier bills grappled with the issues by trying to deregulate insurance markets or provide stabilization funds, even if analyses suggested that their changes would still increase consumer costs and the number of Americans without insurance. A skinny repeal bill, instead, leaves those policy goals to the side in an effort to find a slender majority of votes.
