What happens if we repeal obamacare

Now, during an economic crisis in which these small businesses and individuals have been desperately struggling to survive —and as a deadly pandemic spreads unabated—stripping marketplace coverage from millions of small-business employees risks further imperiling their physical and financial health.

Without the ACA, countless small-business employees would become uninsured and unable to afford any coverage. Repealing the ACA could have devastating consequences for young adults. Prior to the ACA, young adults were uninsured at a higher rate than any other age group.

This dependent coverage provision has helped millions of young people gain access to health insurance during a volatile age range when many are pursuing higher education; beginning their careers; or working in part-time or contract jobs that do not offer benefits. It has also helped young adults secure more comprehensive coverage than many were previously able to access through student health plans available prior to the ACA. The law made important strides in boosting the quality of these policies by requiring that they cover preexisting conditions; banning annual and lifetime limits; and providing preventive care at no out-of-pocket cost.

These coverage provisions are even more critical during the COVID pandemic, as young people have experienced some of the greatest job losses , which puts their access to employer-sponsored health insurance at risk. As the most cash-strapped generation , young adults have limited disposable income to pay for these services out of pocket.

Communities of color—particularly Black, Latinx, and Native communities—have been disproportionately affected by the coronavirus pandemic, primarily due to current and intergenerational systemic racism that drives health disparities and differential access to care and many social determinants of health. Nearly 30 percent of workers of color have a condition putting them at risk of a severe illness from COVID, and these same communities are less able to withstand unexpected costs resulting from job loss or medical costs.

In addition, Black, Latinx, and Native people are at least 2. The same factors that drive health disparities for Black, Latinx, and Native communities also leave them disproportionately vulnerable to discrimination by insurance companies if ACA protections are taken away. Prior to the coronavirus pandemic, nearly 14 percent of African Americans, 10 percent of Hispanics, and more than 17 percent of American Indians and Alaska Natives reported having fair or poor health, compared with 8.

These preexisting conditions would already be used against Black, Latinx, and Native people by insurers to raise rates, and now the disproportionate rate at which these communities contract and have complications from the coronavirus would further subject them to price hikes and denial of coverage. Without the ACA, insurance companies would be allowed to charge women more just for being women—a practice common before the ACA. Alarmingly, such a trend would coincide with an economic crisis that has disproportionately driven women out of the workforce.

Also, nearly 68 million women have a condition that could be deemed a preexisting condition, and even the nearly 6 million annual pregnancies would likely once again be considered a preexisting condition. Moreover, the elimination of other consumer protections, such as EHBs and the coverage of certain preventive care with no cost-sharing, could force millions of women to once again pay out of pocket for everything from mammograms to contraception to annual checkup appointments.

While data on how COVID has spread through schools that are reopened for in-person instruction are subject to uneven reporting , one independent analysis reports that there are more than 24, verified cases tied to K schools. Of the 20 million newly uninsured Americans, millions are parents who would not only have to worry about health risks to their loved ones but also unknown or unaffordable medical costs.

If families become uninsured and need intensive care or treatment, they could be on the hook for tens of thousands of dollars, leading to medical debt or even bankruptcy. If the ACA is repealed, millions of Americans would pay more for their prescription drugs, including for lifesaving drugs that treat COVID and conditions that place people at higher risk of the virus. Before the ACA closed the coverage gap, about 5 million Medicare enrollees fell into it.

With nearly 9 in 10 older adults taking prescription drug medication—and 1 in 4 seniors already struggling to afford their medications—reopening the coverage gap would have devastating consequences. Before the ACA, individual market plans were not required to cover prescription drugs. Without the ACA, insurers could exclude all drugs or entire classes of drugs, leaving some patients with high out-of-pocket costs and others unable to afford the treatments they need during the current public health crisis.

Medicaid expansion narrowed racial gaps in coverage —which is particularly important as the pandemic continues to hit communities of color most harshly—and is critical for both preventive and curative care. When costs increase for older enrollees, these healthier adults are the most likely to drop coverage. We assume that the individual mandate is in effect, tax credits and subsidies for marketplace coverage are available for qualifying individuals, and Medicaid expansion has occurred in participating states.

RAND analysis found that in general eliminating essential benefits would reduce premiums overall but also sharply increase costs for consumers who need those services. Medicaid expansion has accounted for most of the newly insured under the ACA — approximately 14 million, according to the Kaiser Family Foundation. The federal government currently contributes 50 percent to 75 percent of total costs for Medicaid enrollees who were eligible prior to the ACA, higher amounts for CHIP enrollees, and higher amounts for those made eligible for Medicaid because of the ACA.

Concerns about the potential long-term costs of this arrangement have fueled proposals to modify financing for Medicaid. Some proposals would convert Medicaid financing to a block grant to states. Under this plan, states would receive a lump sum federal payment for Medicaid, indexed to inflation. The payment is fixed regardless of enrollment. We estimated the block grants as a component of the Trump campaign platform. Under this arrangement, the federal government sets a limit on how much to reimburse states per enrollee.

Cost growth per enrollee is indexed to inflation. We estimate that under one such proposal the AHCA Medicaid enrollment would fall by nearly 10 million people by The impact becomes more pronounced over time, with Medicaid enrollment falling by nearly 14 million. We also estimate that this change will shift costs to the states over time, as recent growth in per capita Medicaid costs exceeds the Medical Consumer Price Index, and this trend may continue.

This is not an inherent effect of per capita caps, but as implemented under the AHCA, the caps would reduce funding for the Medicaid expansion population. States could respond in several ways:. The net effect of these provisions will most likely translate into some combination of lower Medicaid enrollment and less generous coverage.

Of the various mechanisms for raising revenues in the ACA, one of the most debated has been the "Cadillac tax," scheduled to take effect in The tax would be jointly paid by employers and workers on their respective contributions. The Cadillac tax seeks to address problems with the tax advantage for employer-sponsored insurance ESI , which allows premiums to be paid with an unlimited amount of pre-tax dollars. The current tax break has been criticized for encouraging overly comprehensive benefits and promoting overconsumption of care.

However, the Cadillac tax has also been criticized for making high-cost plans too expensive, particularly for firms with older and sicker workers, and because the flat 40 percent excise tax is not progressive, like federal income tax. A third option that could address both sets of concerns is a cap on the tax advantage for ESI known as an "exclusion cap". Under this cap, individuals in employer plans could exclude premiums from their taxable income up to a dollar limit.

Premiums in excess of the cap would be treated as taxable income and, therefore, subject to federal and state income taxes. The same limits would apply to employers. Like the Cadillac tax, an exclusion cap addresses the problem of ESI's open-ended tax advantage, but would be more equitable because the impact is smaller for people with lower incomes. For families in all income categories, spending for health benefits declines, but the declines are larger for the Cadillac tax than for the tax cap.

But when changes in health benefits are combined with changes in take-home pay, the differences in progressivity between the Cadillac tax and the tax cap were small. The research also suggested that employers might respond to either the Cadillac tax or the exclusion cap by reducing their health benefits for employees. To avoid paying the 40 percent excise tax or the amount above the exclusion cap, employers may reduce the generosity of the health insurance plans that they offer.

Because wages are subject to income and payroll tax, these changes would increase federal revenue. As policymakers weigh the choices ahead, it is clear that tensions exist between many health policy goals—for example, expanding coverage versus reducing costs; targeting tax credits effectively versus incentivizing work; protecting the sickest and most expensive patients versus preserving choice among the majority of patients who may not need comprehensive coverage; and limiting the federal government's cost liability versus minimizing cost-shifting to consumers and states.

Deciding among these goals or striking a balance across them will involve political and value calculations about what the U. The Future of U. Using COMPARE , researchers have examined the impact of many configurations of health insurance in the United States, including: maintaining the ACA with no changes repealing the law with no replacement replacing the law with a single payer system replacing the law with other measures that address coverage expansions through Medicaid and the individual market RAND research has also examined the impact of retaining the ACA while modifying key provisions, including: repealing the individual mandate modifying tax credit subsidies revising market regulations modifying Medicaid expansion Below, we summarize the impacts of these alternatives, focusing on the effect of potential changes to the ACA on the number of uninsured and consumer out-of-pocket costs.

The plan would not allow private health insurance. There is little or no cost sharing for enrollees. The Health-Insurance Solution , a plan focused on catastrophic coverage in which Medicare and Medicaid continue and all other legal U. Individuals also have the option to purchase supplemental private coverage.

Medicaid was also expanded to make uninsured children and many people with mental illnesses eligible for coverage. Thirty-six states and D. Sommers said states don't have the resources to continue Medicaid expansion without federal funds, which could cause the people now insured through expanded eligibility to lose their coverage. Experts say the health-care system will likely revert to the way it was before Obamacare was enacted and that popular provisions under the law, including protections for people with preexisting conditions and a rule allowing young adults to stay on their parents' insurance until age 26, would end.

Uccello said a full repeal of the law could cause the number of uninsured Americans to spike because it would allow insurance companies to deny coverage for people with preexisting conditions or charge higher premiums, making it difficult for many to afford coverage.

The 8. Another problem with repealing the whole law, Sommers said, is that there is "really no portion of the health-care system that isn't impacted" by Obamacare, which means overturning the whole law without a replacement proposal could create "chaos and confusion" in the system.

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