Some GOP Senators balk at repealing Obamacare without a replacement
As the new Republican Congress begins the process of Obamacare repeal, some GOP Senators are balking at getting rid of the law without a replacement that would prevent 20 million people from losing their health insurance.
Other factors that worry these Senators is the real possibility that a careless repeal of Obamacare could roil the health insurance markets and that repeal would remove taxes that currently subsidize insurance premiums for millions.
The Wall Street Journal shows how outlays for health insurance by the government would skyrocket without Obamacare taxes:
Among the thorniest issues GOP lawmakers face as they hash out how to try to dismantle the Affordable Care Act is that getting rid of the health law’s taxes now would eliminate a source of revenue they would need to fund the two- or three-year transition period until any replacement plan is in place. Repealing the taxes would throw into question how to fund the subsidies that help many people get health coverage by offsetting their premium costs, health analysts say.
Ending the taxes now might also mean that Republicans, as they try to write a replacement for the Affordable Care Act, would face a tough vote to approve new taxes, find spending cuts or create a system where fewer people are insured.
But Republicans also want to fulfill a longstanding campaign pledge to gut the health law, which imposed taxes that Republicans say have driven up health-care costs.
“With more than $1 trillion in new taxes, Obamacare is riddled with bad tax policy, and members are currently examining how to best address this issue,” said Senate Finance Committee Chairman Orrin Hatch (R., Utah).
That $1 trillion figure comes from congressional scorekeepers, who estimated last year that repealing all of the taxes used to pay for the ACA would reduce federal revenue by more than that amount over a decade, before accounting for economic growth.
While repealing the health law’s coverage provisions would save the government some money because it would no longer have to defray many people’s health-care costs, a full repeal of the law would cost roughly $350 billion through 2027, according to an estimate released this past week from the Committee for a Responsible Federal Budget, an anti-deficit group. The health law offset its costs both by raising revenue through taxes and finding savings in the Medicare program.
Complicating matters further is the all-important position of president elect Donald Trump. Where does he stand on repeal/replace?
Senator Rand Paul, who favors a transition period for repeal says that Trump endorsed the view that there must be a replacement for Obamacare before repeal.
Kentucky Sen. Rand Paul, who clashed with Trump during the GOP primary, said in a tweet late Friday that the two had a conversation and that Trump agreed with Paul's approach.
"I just spoke to @realDonaldTrump and he fully supports my plan to replace Obamacare the same day we repeal it," Paul tweeted. "The time to act is now."
Trump aides did not immediately respond questions about the conversation and how it had come about.
Nothing about revamping the nation's $3 trillion-a-year health care system will come easy, but GOP leaders want congressional committees to have legislation dismantling much of Obama's overhaul ready by late January. They're hoping Congress can quickly send a measure to the incoming president that would phase out the law, perhaps a couple of months later.
Crafting a GOP replacement probably will take more time, thanks to Republican divisions and solid Democratic opposition. It would be a political nightmare for Republicans to repeal the Affordable Care Act and then fail to pass a new version of the law.
Sen. Bob Corker, R-Tenn., told reporters Friday that Republicans might find themselves in a "box canyon" if they erase the law without a substitute in hand.
One part of Obama's law Republicans are eager to repeal is its tax increases on higher-earning people and segments of the health care industry that help finance expanded coverage. Corker said that if those taxes are voided but Republicans temporarily continue subsidies to help people buy coverage, "that means Republicans would have to vote for a tax increase" to pay for them — usually a non-starter for the GOP.
Sen. Ron Johnson, R-Wis., said Friday that if he had his way, "I would start bringing up those elements that start repairing the damage and I would start taking votes on those right now."
Johnson also expressed concern that Democratic opposition could scuttle the effort. Senate Minority Leader Chuck Schumer, D-N.Y., has said if Republicans void Obama's bill, Democrats won't help them pass alternative legislation.
How many voters will lose their insurance if Obamacare repeal goes through without a replacement? Federal subsidies for Medicaid expansion would end, forcing states to decide if the 7-8 million people who took advantage of the expansion should remain covered. Since the states would have to pick up 100% of the tab, that's not likely. (Many more people got covered by Medicaid since 2010 but they were already eligible for the program and would continue to be eligible if Obamacare was repealed.)
In addition, without subsidies, it's a safe bet that millions of people would be unable to afford the insurance they have now. Some of that slack could be picked up if Congress were to allow insurance companies to offer a multitude of plans without Obamacare restraints like mandated coverages and coverage for preexisting conditions.
So it is likely that between 5-10 million Americans will be thrown off their health insurance if Obamacare repeal goes through without a replacement. Given the Democrat's unwillingness to help the GOP in passing a replacement, that could mean millions of people going to the polls in 2018 as mad as voters were in 2010 when Obamacare forced them off their insurance plans.
And we all remember what happened then.
The bottom line is that there is nothing simple about Obamacare repeal. The law had spread its tentacles into every corner of the health care industry and yanking them out without thought and without a plan would be catastrophic politically as well as causing personal hardship for millions.
The Republicans can do better than that if they act responsibly and intelligently.