City leaders must prepare for an as-yet-uncharted end to Obamacare.

Karen G. Mills and Jan W. Rivkin

Donald Trump and many Republicans campaigned on a promise to repeal the Patient Protection and Affordable Care Act, better known as Obamacare.  Having won the presidency and majorities in both houses of Congress, Republicans now face the dilemma of the dog that chased the car and finally caught it: now what do they do?  Letting Obamacare remain in place would draw fire from the Republican base.  But an immediate repeal of the law would leave millions without insurance—political suicide by all accounts.  Obamacare has extended health insurance to somewhere between 10 million and 22 million Americans, depending on how one counts.[1]  The program appears oddly popular in practice among some who renounce it in principle: in states that Trump won, citizens surged to enroll in Obamacare right after the election.  Even President-elect Trump had post-election praise for certain provisions of Obamacare, saying that he wanted to maintain guarantees of insurance for patients with preexisting conditions and the ability of children to remain on parents’ insurance until age 26.

The upshot is, we are likely to see a symbolic “full repeal” of Obamacare…but in reality a gradual transformation of Obamacare into something new.  Call it Trumpcare.  The most likely broad outlines of Trumpcare are brought into focus by Trump’s nomination of Representative Tom Price to be Secretary of Health and Human Services.  Long a vociferous opponent of Obamacare, Price has touted and refined an alternative—a proposed Empowering Patients First Act.  The detailed differences between Price’s Act and Obamacare are described elsewhere.[2]  In brief, Price proposes to:

  • Repeal Obamacare, including the mandate that all individuals get health insurance or pay a penalty.
  • Replace the income-based subsidies that Obamacare provides to help people buy health insurance with age-based tax credits that aren’t larger for the poor.
  • Expand health savings accounts that allow people to save before-tax money to spend on healthcare.
  • Do away with an expansion to Medicaid that accompanied the adoption of Obamacare and extended health coverage to 12 million low-income Americans.
  • Give states grants to subsidize insurance pools for high-risk individuals (mostly people with existing conditions who can’t get insurance in private markets).
  • Allow the sale of insurance across state lines—creating competition among insurers but weakening the ability of states to regulate health insurers.
  • Eliminate Obamacare’s requirement that all insurance plans cover a specific set of health benefits—creating more choice for consumers but allowing plans with Spartan benefits.
  • Allow insurers to raise premiums for sick customers if they let their coverage lapse.

All in all, compared to Obamacare, Price’s Act has more individual choice, more competition, less regulation, and less protection for the poor and sick.  In our assessment, those attributes are the likely traits of the eventual Trumpcare, even if it doesn’t wind up matching Price’s Act precisely.

Cities, with their concentrations of impoverished Americans, have been among the biggest beneficiaries of Obamacare.  In New Orleans, for instance, nearly a quarter of the city’s population have participated in Obamacare, either through the insurance exchanges established by the program or the Medicaid expansion.[3]  Accordingly, city leaders cannot afford to be mere bystanders as Trumpcare takes shape.  Rather, they should muster all the influence they have to lobby for Trumpcare to retain important aspects of Obamacare, especially the Medicaid expansion and the income-based subsidies.  The lobbying efforts should be collective and should span all sectors—not one mayor at a time, but a united front of mayors, business leaders, educators, and nonprofit leaders from many cities.  At the same time, city leaders must prepare for the possibility that their lobbying efforts will fail—the likely outcome given the enduring Republican opposition to Obamacare and the appointment of Tom Price.

The greatest fear of city leaders is that with a repeal of or weak replacement to Obamacare, ill and uninsured individuals will flood the emergency rooms of city hospitals, where federal law requires that care be provided.  The resulting costs could easily bankrupt urban safety-net hospitals across the country.  To avert such a disaster, cities need to strengthen the network of preventative healthcare services available to, and used by, the urban poor.  Preventative care, after all, is much less expensive than acute care.  Cross-sector Collective Impact efforts, similar to those deployed in public education in many cities, may become essential for support of city-level social and health services, support that the federal government no longer provides.  Filling the vacuum left by a repeal or replacement of Obamacare will require concerted local effort, coordinated across all of a city’s sectors.

YALP participants, how do you see this tricky landscape evolving?  What are your cities doing to prepare for the impending but still evolving changes?

 

[1] Megan McArdle, “How many are insured because of Obamacare? Great question,” BloombergView, September 14, 2016.

[2] For instance, see Eric Planin, “8 big changes under Tom Price’s Obamacare replacement plan,” The Fiscal Times, November 30, 2016, and John Graham, “Price’s Empowering Patients First Act gets better with age,” Forbes, May 26, 2015.

[3] Alex Woodward, “Mayor Landrieu: Repealing Obamacare will not make America great again,” Gambit, December 12, 2016.

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