What is the effect of AHCA’s failing to repeal and replace the Affordable Care Act?

Spring 2017: Volume 73, Number 1

PEC Report
William Thorbecke Ph.D. and Nancy Goldov Psy.D., PEC Co-Chairs

The American Psychological Association has been conducting annual nationwide surveys that examine the nature and impact of stress across the country for the last decade. According to the APA, “The Stress in America™ survey measures attitudes and perceptions of stress among the general public and identifies leading sources of stress, common behaviors used to manage stress and the impact of stress on our lives.” The recent findings about stress in America released on February 15, 2017 show that two thirds of Americans say they are stressed about the future of our nation including a majority of both political parties and about 57% believe the current political climate is very or somewhat significant as a source of stress. The survey was conducted from August 2016 through January 2017 and found the first significant increase of stress in 10 years since the survey began. It is likely that many of us as clinicians and psychologists dealing with the public at large have been aware of this increase in stress with our clients and in institutions where we serve.

For healthcare providers and consumers, the impact of the proposed changes in the health care system may be a very personal stressor in regards to the future of the country and the current political climate. Given the possibility that our client’s may discuss their concerns about their health insurance as well as the impact of changes to insurance on their treatment, we thought we would provide some facts and analysis from the recent healthcare debate so that we can help our clients put this debate into perspective.

The Affordable Care Act (ACA) or Obamacare was recently challenged with repeal and replace legislation through a proposed bill the American Health Care Act (AHCA) or Trumpcare by the Republican House and the President. Many patient advocacy and health industry groups representing hospitals, doctors, nursing homes, patients and older people came out against the AHCA. For example, the chief executive of Molina Healthcare Inc., a major Medicaid provider, believes the legislation would create a spike in premiums, result in insurers exiting markets, and destabilize the marketplace. Also, “While we agree that there are problems with the ACA that must be addressed, we cannot support the AHCA as drafted because of the expected decline in health insurance coverage and the potential harm it would cause to vulnerable patient populations,” according to AMA Chief Executive James Madara.

In the conclusion of many experts, the AHCA would provide a contrary result to the goals President Donald Trump had initially proposed: affordable coverage for everyone, lower deductibles and costs, better healthcare, and no cuts to Medicaid. According to their analysis, the bill was almost certain to reduce overall coverage, result in deductibles increasing, and would result in eventual loss of ACA Medicaid expansion. “It’s a half-baked plan that accepts the logic and broad outline of the Affordable Care Act while catastrophically weakening key provisions. If enacted, the bill would almost surely lead to a death spiral of soaring premiums and collapsing coverage,” in the view of Paul Krugman.

An evaluation of the effects of implementing the AHCA by the non-partisan Congressional Budget Office (CBO) shows twenty-four million more Americans would be uninsured by 2026 than under the ACA. Indeed by 2018, 14 million more people would be uninsured under the AHCA legislation than under current law.  Insurance premiums would likely jump up to 20% in the individual market in 2018 and 2019, afterwards they would decrease. By 2026, average premiums would be approximately 10% lower than under the ACA. Additionally, the increase in premiums would be much steeper for some consumers in the individual market, particularly older people with lower incomes. The Medicaid population would be deeply affected. Nearly 1.3 million people currently receive treatment for mental-health and substance abuse disorders under the Medicaid expansion, according to an estimate by health care economists Richard G. Frank of the Harvard Medical School and Sherry Glied of New York University.

By making individual insurance more difficult to access and more difficult to afford, the effects on small businesses, start ups, and contractors could be stifling and allow less ability to transfer to a new job. One benefit of the ACA health care law has been to provide insurance reform to entrepreneurs to allow workers to be untethered from larger corporations for healthcare benefits. The ACA allowed many self-employed business firms to exist and prosper by their employees having access to health care. Other analysts pointed out that if millions of Americans exercise their right not to purchase health insurance, they end up in the emergency room, where much of the cost of their care gets passed along to others.

What is the effect of the failure of the AHCA to repeal and replave the Affordable Care Act? According to many analysts, there are significant problems with the ACA and the current health care system that require a bipartisan repair. Yet the Republican Party appears stuck in regards to repeal and replace. Conservative Republicans believe the AHCA law needs to go further to reduce government involvement in health care. While moderate Republicans, are unhappy with the AHCA provisions to make insurance less affordable for poor and older citizens and in the high CBO estimates for loss of insurance coverage. The challenge becomes how to create a bill that satisfies both factions yet does not take benefits away granted by the Affordable Care Act. After the Republicans withdrew the American Health Care Act, Trump suggested he would focus on tax reform and wait for Democrats to approach him about repairing the Affordable Care Act.

If Congress does not fix the ACA, the Trump administration could halt enforcing the law and refuse to allocate funding. Trump believes this will cause the health system’s problems to compound exponentially until lawmakers have no choice but to make changes. It is possible that a bipartisan group of moderate Democrats and Republicans could come together to repair some of the issues with the ACA. Yet without repair or additional subsidies to offset premium costs, it is likely that enrollment will decline that would raise premiums and limit the effectiveness of the ACA. Some analysts believe that these problems with the ACA will accumulate to the point that a bipartisan solution might become necessary and crucial to the effective survival of the law.