The Fatal Flaws of Any Post-ACA Republican Replacement Plan

The recent first step by the Republicans for repeal of the Affordable Care Act (ACA) by a vote of 51-48 in the Senate and 227-198 in the House opens up an intense debate among Republicans as to how and when to replace it. President-elect Donald Trump is pressing Congress to replace it concurrently, or nearly so, with its actual repeal, with which House Speaker Paul Ryan now seems to agree. Recent talk of a two- to four-year delay is quickly fading away. Having embarked on the budget reconciliation process, the GOP can expect to pass repeal with just a bare majority vote in Congress, thereby avoiding filibuster by Democrats, but knows it will need 60 votes in the Senate to pass any real replacement package, thus requiring some help from the Democrats.

Some say the GOP still has no replacement plan, after almost seven years contesting the ACA. But they actually have published their principles, and have somewhat similar competing plans on the shelf, with some variation as to details. Republicans now realize the political dangers of a two- to four-year delay after repeal, and are now trying to gain consensus among these plans as two House committees report out by the end of this month. The question of Tom Price’s role in the outcome lingers as his committee hearings are delayed into February, when we will learn if he is to be confirmed as incoming head of the Department of Health and Human Services (DHHS).

In the meantime, we already know a lot about what to expect in the final Republican post-ACAreplacement plan. First, these are the principles upon which it will be based:

1. States, not the federal government, should have primary responsibility for health policy;

2. Patients and doctors should be in control;

3. There should be more competition among health plans to give patients more choices; and

4. Small business should have more discretion and flexibility to configure health benefits for their employees.

Released last summer, Paul Ryan’s 37-page white paper “A Better Way” includes continuation of consumer-directed health care (CDHC) (with patients having “more skin in the game”), health savings accounts, high-risk pools, selling insurance across state lines, association health plans among businesses and further privatization of Medicare and Medicaid

Tom Price (R-Georgia), as leader of the House Budget Committee, proposed in 2015 the complete repeal of the ACA, as well as privatization of Medicare, sharp cuts in Medicaid funding and defunding of Planned Parenthood.

The problem with all of these proposals is — they won’t work. Each of these directions has been used for years, and have all failed to assure Americans with better access to affordable health care. They have been discredited by long experience.

Here are four fatal flaws to these proposals:

1. Market failure. Like the ACA, any of their replacement plans are still based mainly on the private for-profit market place. Insurers, the drug industry and other parts of the medical-industrial complex, including their shareholders, have enjoyed bonanza years on Wall Street under the ACA without any significant cost containment. Most people are unaware of how extremely privatized and for-profit the current health care system is, as these examples show: free-standing laboratory and imaging centers (100 percent), surgical-centers (95 percent), dialysis centers (90 percent), home care (76 percent), nursing homes (65 percent) and hospice (63 percent), according to a 2016 Annual Survey by the Commerce Department or most recent available data for share of establishments. Instead of increased competition, we have seen increasing consolidation and less competition under the ACA.

2. Failure to learn from past failed health care policies. Republicans conveniently forget that the ACA was modeled on a health plan brought forward by the Heritage Foundation and enacted as the Massachusetts Health Plan by Gov. Mitt Romney in 2006. Three years later, a study comparing safety net hospitals with non-safety net hospitals found that the former played a disproportionately large role in caring for disadvantaged patients and were hurting financially. Many reasons for the ACA’s failure have been discussed elsewhere, including its reliance on a failing multi-payer financing system with some 1,300 private insurers, mostly dedicated to profits rather than coverage of patients’ health needs. How they continue to discriminate against the sick, profiteer and inflate their overhead has been described elsewhere, to the point where the industry is not sustainable without taxpayer support.

3. Further privatization. Contrary to experience, evidence and GOP ideology, privatization is less competitive, less efficient and more expensive for patients than the public sector, as already demonstrated by private Medicare and Medicaid plans. Privatized plans offer less choice, are more volatile and less accountable than their public counterparts. They game the system and demand ongoing overpayments, e.g. more than $173 billion to Medicare Advantage between 2008 and 2016. All that amounts to corporate welfare at taxpayer expense.

4. Dependence on larger role of states. There are already wide variations in states’ definitions of eligibility and coverage, which are likely to increase further as more restrictive federal block grants to states become widespread. Safety net resources will be hit hard, seriously impacting the most vulnerable among us.

The GOP is taking us over a cliff, not yet realizing it may well be political suicide for the party. We can expect that any GOP replacement plan will cost patients, families and taxpayers more, and that we will all get less. This is all so foolish since there is a real solution in plain sight — single-payer national health insurance (NHI) if Republicans were not so blinded by ideology and unaware of the failed policies already proven by the last 25-plus years’ experience, including those of the ACA, much of which are still baked into their supposed “better way.” They also seem to be unaware of the most recent public polls strongly favoring NHI, regardless of political party. As just one example, a Gallup poll in May 2016 found that 41 percent of Republicans and leaners favored replacing the ACA with NHI.

Defying experience and reason, we can anticipate that the GOP’s principles and approaches will make an imploding ACA system even worse. We can then expect a huge backlash from the public and even the private insurance industry when it doesn’t get all that it wants.