Why Repealing Obamacare Is Going to Be a Long, Chaotic Mess

This is normal. Yep. Totes.

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Now that Donald Trump has won the right to gold-plate his name on the White House, Republicans finally have their long-awaited chance to scrap Obamacare and pass their own version of health reform. How exactly they’ll approach that task is still unclear. But it seems safe to bet the process is going to be a struggle for Congress—and very, very ugly for consumers.

At the moment, the GOP basically has three routes to repeal the Affordable Care Act. First, it could try to work with moderate Democrats to simultaneously abolish and replace Obamacare in one fell swoop. Second, Senate Majority Leader Mitch McConnell could cave to conservative demands and nuke the filibuster, giving Republicans in his chamber the power to pass legislation with a bare majority (come 2017, the party should hold 52 seats). Alternatively, it could use the Senate’s budget reconciliation process to repeal most—but probably not all—of Obamacare’s big planks with just 51 votes and promise to come up with a replacement later.

Right now, option three seems most plausible. A bipartisan bill would take a while to craft, which would anger conservatives craving swift action and would require finding at least eight cooperative Democrats, which seems unlikely. Meanwhile, McConnell appears hesitant to eliminate the filibuster, since doing so could come back to haunt Republicans should they ever lose control of the government. “I don’t think we should act as if we’re going to be in the majority forever,” he’s said.

Relying on reconciliation, which prevents filibusters against budget bills, would be far simpler. Congressional Republicans already used the procedure early this year to pass a bill that would have repealed most of the Affordable Care Act’s important sections. President Obama vetoed it, of course. But McConnell and House Speaker Paul Ryan could just dust off the text and send it back to the White House for President Trump’s signature.

Republicans would probably not be able to repeal all of Obamacare that way, because reconciliation can only be used on matters that affect the budget, which typically means tax and spending legislation, not changes to regulation. The bill Congress passed in January, for instance, would have stopped Washington from operating the health care exchanges, cut the Affordable Care Act’s insurance subsidies, eliminated the individual mandate’s tax penalties for those who don’t buy coverage, and reversed the Medicaid expansion, among other changes. But it left in place a whole host of rules, including the ones forcing insurers to cover consumers with pre-existing conditions. Some conservatives have begun to argue that because Obamacare’s provisions are all meant to work in concert, the Senate should be able to use reconciliation to junk the entire act in the future. But that’s certainly not the mainstream view at the moment, and the Senate parliamentarian might well reject it.

Nixing Obamacare’s spending but leaving in place its numerous regulations would lay waste to the individual insurance market. Sick patients would seek coverage, driving up costs for carriers and making premiums unaffordable for many, if not most, families. That’s why the bill Congress passed phased out the law over a couple of years, creating a transition period during which politicians could come up with a substitute. Presumably, that’s what the House and Senate will do once again.

But replacing Obamacare isn’t going to be Sunday stroll through Rock Creek Park. Republicans have never passed their own version of health reform, and while conservatives in the House and Senate have offered replacement plans, it’s not clear that they would survive the legislative meat grinder. For instance, Ryan’s favored proposal would largely fund itself by limiting the tax break for employer-provided insurance, which is a massively unpopular idea. It’s not entirely different than Obamacare’s “Cadillac tax” on deluxe health plans, but that was so reviled even Hillary Clinton vowed to kill the levy off. Most standard Republican replacement plans also involve providing tax credits so low-income families can buy private coverage (not unlike, oh, say, Obamacare), but it’s not clear whether hard-line conservatives in the House will want to fund those. Others seem less than eager to do away with the entire Medicaid expansion. Then there’s the question of those protections for patients with pre-existing conditions, which Donald Trump said he “likes very much” and might like to keep. Conservatives could perhaps agree on an alternative, like letting customers keep their coverage as long as they continuously pay premiums, but chances are it’ll be complicated and harder to explain to the public.

The point of all of this is: Health reform round two will be hard and likely painful. One possibility is that the impending wreck of the individual market as Obamacare phases out will force Democrats to the negotiating table, setting the stage for a grand bargain wherein Ryan and McConnell can afford to lose a few  implacable conservatives. But it could just as easily turn into a game of chicken between the two parties, or force McConnell to finally ditch the filibuster. The acrimonious possibilities are seemingly endless.

While all that haggling is going on, the transition period away from Obamacare is not likely to be pretty. Under President Trump, insurers aren’t going to have a lot of incentive to stick around on the individual market. Those that have been losing money while trying to build a customer base on the Affordable Care Act’s exchanges are likely to finally give up, since there won’t be any point in playing the long game. Even insurers that have made a profit may withdraw for fear of a lackluster open-enrollment season, given that the new White House probably won’t be doing much to encourage sign-ups. And as insurers bail, we can expect to see an intensification of the problems that have afflicted the exchanges in states like Arizona, Oklahoma, and Alabama, where corporate losses and diminishing competition have lead to higher insurance premiums. Many more Americans may find themselves with just one insurer in their market, or possibly none at all.

None of this even touches that decisions Trump himself will have to make. Conservatives are already agitating for him to start “dismantling Obamacare on day one,” by halting programs like Obamacare’s risk corridors and reinsurance that were meant to minimize insurers losses, as well the cost-sharing subsidies designed to keep premiums low for lower-income patients. If he takes their advice, the Obamacare marketplaces will decay even more quickly.

It’s always possible I’m wrong. Maybe Trump will be patient and McConnell and Ryan will steer the country smoothly down Obamacare’s off-ramp toward whatever new insurance regime they have in mind. But so far, I haven’t seen any real evidence that they have a plan to do it. Don’t be surprised if the ride makes the whole country feel sick.