Health Care: The Risks Of Repeal Without Replace

July 18, 2017

After the Senate’s attempt to replace the Affordable Care Act collapsed Monday, Republican leaders immediately began talking about repealing the health care law in hopes of coming up with a replacement later.

Senate Majority Leader Mitch McConnell said he plans to hold a vote to consider a repeal-only bill this week. The bill’s language is based on the repeal bill that that passed the House and Senate in 2015 but was vetoed by President Barack Obama. A press release from McConnell’s office calls it, “a repeal of Obamacare with a two-year delay to provide for a stable transition period” to then come up with a replacement. However, it is already expected to fail because enough senators have opposed it.

President Trump tweeted his support of the strategy shortly after two Republican senators withdrew their support of the pending Senate bill: “Republicans should just REPEAL failing ObamaCare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in!”

McConnell agreed. “The Senate will take up and vote on a repeal of Obamacare combined with a stable two-year transition period,” he said on the Senate floor. “President Trump will sign it now.”

It’s not a new idea.

After Trump was elected in November, Republicans in Congress considered the so-called “repeal and delay” strategy and rejected it. Here’s why:

1. The Cost Of Insurance Premiums Would Skyrocket

While McConnell and Trump call this plan a straight repeal of the Affordable Care Act, it would in fact leave many parts of the law in place. That is because under Senate rules, legislators can only repeal the parts of the law that have a budget or tax impact.

The law’s individual mandate that everyone, healthy or sick, must buy insurance would disappear. But the rule that insurers must write policies for anyone, no matter their health status, would stay.

“Insurers would have to take people with pre-existing conditions, but the the sense is that healthy people without that mandate wouldn’t sign up,” says Larry Levitt, vice president of the Kaiser Family Foundation, a health care research organization. “So insurers, with that kinds of uncertainty, would immediately raise rates.”

The Congressional Budget Office analyzed the 2015 legislation in January and said that if it was to pass, insurance premiums would rise 20 percent to 25 percent in the first year. If McConnell’s plan works, that means 2018.

2. Millions Would Lose Their Insurance

Those high prices would drive millions of people out of the insurance market.

The same CBO report estimates that the number of people without insurance would increase by 18 million in the first year after a law similar to the 2015 legislation passes.

That is almost the same number of people who gained insurance in the seven years since the Affordable Care Act passed.

About 10 million people would lose coverage because they would drop their individual plans, 5 million would be dropped from the Medicaid rolls and 3 million would lose their employer-provided coverage, CBO says.

Sen. Shelley Moore Capito, R-W.Va., has already said she won’t support the repeal effort because of the threats it poses to people’s coverage.

“I did not come to Washington to hurt people,” she said in a statement Tuesday morning. “I have serious concerns about how we continue to provide affordable care to those who have benefited from West Virginia’s decision to expand Medicaid.”

3. Insurance Markets Would Unravel

Rising rates and fewer people in the market are the two ingredients for the mythical and much-invoked “death spiral.” That would occur if rates rise so much that nobody can afford insurance and the entire market collapses.

And that is what the Republican’s proposed repeal of the Affordable Care Act, or Obamacare, would do, according to multiple health care analysts.

Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm, says a repeal and delay “would just cause more market calamity without a known replacement.”

And then there is the question of what would replace Obamacare.

Charles Gaba, who runs the website that tracks ACA enrollment numbers, doubts congressional Republicans will come up with anything better:

“These guys have had eight years to come up with their ‘alternative/replacement’ plan, clearly with nothing to show for it,” he wrote on his website. “Does anyone honestly think that they’d actually come up with anything useful given one more year?”

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