What will happen to Obamacare?

After the 2016 election of Donald Trump, who campaigned with a promise to “repeal and replace” the Affordable Care Act (ACA, or “Obamacare”), what will actually happen? While I don’t pretend to have a crystal ball, we can make some educated guesses about the upcoming year.

Obamacare Has Failed

The ACA has failed on almost every promise. Its effects have made a mockery of its name. Average insurance premium increases of 24% are set for 2017 alone, not to mention prior price increases, with four states seeing average premium increases of more than 50%. The ACA has reduced the medical options of virtually all Americans via progressively narrower insurance panels—a move the insurance companies have made to maintain fiscal viability.

Insurance plans forced upon those with subsidies come with ever-increasing deductibles that reduce access to healthcare. Obamacare supporters claim as their success 20 million newly insured Americans. However, even with financial support for their insurance premiums, most cannot afford healthcare, because they can’t afford their average $6,000 Bronze plan deductible. While they can claim to have insurance, they still are prevented from accessing medical care.

Unfortunately, Obamacare has moved into a “death spiral.” The insurance premiums will continue to increase while insurance coverage continues to decrease due to adverse selection. Healthy patients must pay into this system in order to maintain the fiscal solvency of the insurance companies. If the pool of the sickest patients keeps growing, while the pool of healthy patients keeps shrinking, the insurance companies must pull out of the market or go bankrupt. This is what we have been seeing in the insurance market: progressively fewer options for insurance, at progressively higher prices, for progressively fewer healthcare options. Don’t expect this to change for 2018, which will see an ever-tighter turn in the death spiral. At this point, even most Democrats recognize this as an untenable situation.

Republicans have never backed the ACA, as witnessed by its passage in a Democrat-controlled House and Senate without a single GOP vote. Now, six years later, with Democratic politicians losing control of the House, Senate, and Presidency, Democrats are calling for changes as well.

Most notably, Sen. Elizabeth Warren (D-Mass.) stated in a recent article, “Americans want reform to Obamacare— Democrats included. We must bring down the costs of health insurance and the cost of health care.” And she’s not the only one. Many traditionally Democratic voters abandoned their party’s presidential candidate over the rise in healthcare costs attributable to the ACA, as noted by a Muslim immigrant who voted for Trump, writing in a Washington Post article, “I am a single mother who can’t afford health insurance under Obamacare” (Washington Post, November 10, 2016).

That said, politics is a blood sport, so Republicans shouldn’t expect much support from the other side of the aisle. With the Democrats ready to lay any untoward effects of repealing Obamacare at the feet of the GOP, many in the Republican camp are talking about “fixing” Obamacare rather than voting for an outright repeal.

Republicans are sorely mistaken if they try to patch up Obamacare rather than repeal it. You don’t pour money into propping up a condemned, collapsing house just because you like the large flat-screen TV. Similarly, you don’t keep the sprawling 1,000+ pages of the ACA, with all of its spin-off regulations, just because you like the ability to keep your kids on your health insurance until they’re 26.

The Case against Repealing Obamacare

Recognizing that the ACA is not viable in its current iteration, some—mostly on the left—have advocated “fixing” Obamacare. This group cites the problems that would come with a repeal of Obamacare.

First and foremost are the 20 million Americans “newly insured” due to Obamacare. Critics of a repeal argue that these 20 million Americans would be without healthcare. They also point to the most popular aspects of Obamacare:

1. The guarantee provision, which prevents insurance from denying coverage for preexisting illness, and;
2. The ability to maintain children on their parents’ insurance until they are 26 years old.

These provisions are almost as popular with Republicans as they are with Democrats.

Along with these concerns comes the recognition that any law in place for six years will have adjusted many facets of society, and the outright repeal of such a law will have far-reaching implications. What about the billions of dollars the healthcare industry has spent adjusting to Obamacare? How many doctors have sold their practices to become employees, at least in part in response to the effects of Obamacare? (Answer: roughly 200,000, or nearly 25% of physicians [“The Physician’s Association 2014 Survey of Physicians.” Published September 2014. Available at physiciansfoundation.org]).

So, just when all of these societal elements are becoming adjusted to Obamacare, the incoming administration wants to change the rules. You can expect many powerful lobbying groups to push for fixing rather than repealing the ACA.

The Case for Repealing Obamacare

Of those 20 million newly insured, 16 million receive Medicaid and would continue on Medicaid even with an outright repeal of Obamacare. The only concern is the nearly five million who have subsidized private insurance through the exchanges. But, given the fact that those five million newly insured have $6,000 deductibles with the typical Bronze plan, an insurmountable hurdle for most, they are—for all practical purposes—uninsured.

On the other hand, these “newly insured” are inflicting significant harm on more than 200 million Americans and the healthcare industry that serves them. As reported by Betsy McCaughey, a senior fellow at the London Center for Policy Research in New York City, 155 million citizens with employer-sponsored insurance have soaring deductibles, 11 million people pay penalties for having no insurance, 55 million Medicare recipients have reduced benefits, and hundreds of thousands of part-time workers experienced reduced hours so that their employers could avoid being hit with the Obamacare mandate (New York Post, November 25, 2016).

Republicans would be sorely mistaken if they try to patch up Obamacare rather than repeal it. You don’t pour money into propping up a condemned, collapsing house just because you like the large flat-screen TV. Similarly, you don’t keep the sprawling 1,000+ pages of the ACA, with all of its spin-off regulations, just because you like the ability to keep your kids on your health insurance until they’re 26.

Obamacare is so large, complex, and filled with exceptions, exemptions, and contradictions that many of its unintended consequences are yet to be felt. As noted by Scott Gottlieb, MD, a resident fellow at the American Enterprise Institute, a member of the Federal Health IT Policy Committee, and an assistant clinical professor at New York University School of Medicine in New York City, a future president could enact universal socialized medicine without congressional approval based solely on Section 1332 in the ACA (Wall Street Journal. Sept. 13, 2016). Could this be why some politicians want to fix, not repeal, Obamacare?

Could it be that the GOP likes to have Obamacare around as a whipping boy during election time? Well, that will only last so long. In fact, Trump’s election can be viewed as a repudiation of GOP grandstanding on Obamacare without getting any results. After two successive elections that resulted in a Republican majority in the Senate and the House but nothing to show for it, the Republican faithful are losing faith and patience.

The Likely Fate of Obamacare

The 2016 election has won the presidency for the GOP and maintained majorities in the Senate and the House; however, unlike Obamacare’s passage with a Democrat supermajority in the Senate, the Republicans still do not have a 60-vote majority in the Senate and will not be able to force a repeal of Obamacare without Democrat support. A more likely option would be for the GOP to move for defunding many parts of Obamacare through the process of reconciliation, which only requires a simple majority vote in the Senate. While this is an effective means of removing most of the ACA, it will take time.

The Obamacare exchanges are crumbling and may fail even before a repeal. Nearly three-fourths of the exchanges have already gone bankrupt, and many major insurers have left the market entirely. So, a crisis of health insurance may actually precede any actual action taken by Congress and the Trump administration.

To avert this catastrophe, the Trump administration may find itself in the ironic position of having to rescue Obamacare before repealing and replacing it. In the final analysis, any repeal of Obamacare will take a couple of years, and it will be a rocky course along the way.

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Dr. Gianoli is an associate professor in the departments of otolaryngology–head and neck surgery and pediatrics at Tulane University School of Medicine and in private practice with the Ear and Balance Institute in Baton Rouge, La. He is also a member of the ENTtoday Editorial Advisory Board.