Lessons learned from the GOP failure on healthcare

Congressional Republicans’ inability in recent months to “repeal and replace” the Affordable Care Act (ACA) offers important lessons for next steps on healthcare — if policymakers will heed them. 

The effort has failed in no small part because a large majority of Americans oppose the core features of House-passed and unsuccessful Senate legislation that would have sharply cut federal funding for Medicaid, ultimately compelling states to eliminate or pare back coverage for millions of low and moderate-income people. The bills also would have forced millions more in individual insurance markets to pay more out of pocket for the same coverage or switch to skimpier coverage. They would have used the savings from these changes largely to finance tax cuts mostly for corporations and affluent individuals. 

{mosads}The bills would have undercut important protections in addition, such as the requirement that health plans cover “essential health benefits” like maternity care and mental health treatment as well as safeguards for people with pre-existing conditions.

Each GOP repeal and replace bill, the Congressional Budget Office (CBO) concluded, would have cost more than 20 million people their coverage. The bills would have cut federal Medicaid spending by more than $750 billion over the next decade and raised premiums or deductibles and other out-of-pocket costs by thousands of dollars a year for millions of other people. They would have left many people with skimpier coverage.

Most Americans don’t support such outcomes. As policymakers consider their next moves on healthcare, they should adopt three core principles, all of which rest on the Hippocratic Oath: do no harm.

First, don’t enlarge the number of uninsured: We’ve made major progress over the last half-century in extending health coverage to tens of millions of seniors, families, children, people with disabilities and other adults through Medicare, Medicaid, the Children’s Health Insurance Program and the ACA. Today, 91 percent of Americans have health coverage — the highest share ever.

Policymakers should reject any measure that CBO finds would leave more Americans without coverage, whether by cutting Medicaid, reducing federal subsidies that help low and moderate-income Americans buy insurance, or taking other steps that would put coverage out of reach for those who now have it. 

Second, avoid deleterious Medicaid changes: The administration and congressional Republican leaders sought to restructure Medicaid in damaging ways by converting it to a per capita cap or block grant, based in part on the mistaken claim that Medicaid doesn’t work well. In fact, Medicaid provides critical access to comprehensive, cost-effective care for tens of millions of children and families, seniors, people with disabilities and other adults.

Medicaid is the nation’s most efficient healthcare program. It provides comprehensive coverage that is comparable to, but less costly than, what beneficiaries receive from job-based coverage or what they can buy in the individual market. For example, covering adults through Medicaid costs about 22 percent less than if they were covered by private insurance, the Urban Institute has found, and Medicaid costs per beneficiary have been growing more slowly in recent years than those for private insurance. Medicaid enrollees report high levels of satisfaction with their coverage.

Appropriately, policymakers of both parties want to find ways to control rising healthcare costs throughout the healthcare system — in both the public and private sectors — and improve the quality of care. 

Medicaid can be part of the solution, since it’s already the most cost-effective part of that system and since various state Medicaid programs are already reforming how we deliver and pay for care. For instance, Missouri’s “health homes” initiative coordinates care for beneficiaries with chronic physical health conditions or a serious mental illness. It is driving a drop in emergency department visits and preventable hospitalizations.

Third, strengthen the ACA marketplaces instead of undermining them: The ACA’s marketplaces have been on track for growing price stability and competition. Rather than undermine them, the Administration and Congress should take common-sense steps that will help ensure their future vitality.

The Kaiser Family Foundation found that individual market insurers substantially narrowed the gap between premiums and costs in 2016 and appear on track to earn profits in 2017. These improvements should lead to lower premium increases and more insurer competition — if efforts to undermine the marketplaces end.

The administration should fulfill the federal commitment to pay the ACA’s cost-sharing reduction payments to insurers to offset their costs in offering plans with lower deductibles and copays to lower-income consumers, as the law requires. If the administration withholds these payments, insurers will have to offset the costs they incur in reducing deductibles and co-pays by raising premiums much more than they otherwise would. The administration and Congress also should expand efforts to further stabilize the market by making sure consumers know about their coverage options and facilitating the entry of insurers into new markets. 

With Americans rejecting the GOP’s repeal and replace efforts, policymakers should work in a bipartisan manner to pursue goals that both parties say they favor — increasing rather than reducing the number of Americans with insurance, making insurance and care more affordable and controlling costs throughout the U.S. healthcare system. 

Robert Greenstein is founder and president of the Center on Budget and Policy Priorities, a nonpartisan research and policy institute. Greenstein served as the administrator of the Food and Nutrition Service at the U.S. Department of Agriculture under President Carter, leading anti-poverty initiatives. Follow him on Twitter @GreensteinCBPP. 

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