Obamacare is Effectively Repealed. Where Do We Go from Here?

With the repeal of the Obamacare mandate, the Affordable Care Act is effectively destroyed. The Obamacare mandate required that most Americans have health insurance and if they do not, they are subject to a penalty. The notion behind this idea was that ALL Americans use healthcare at some point and therefore ALL Americans should pay something into the system. The healthcare market is not a market which you can decide to opt in or opt out of. If you possess a body, you are in the healthcare market and you should be required to make a basic contribution to the functioning of that market. 

Prior to the Obamacare mandate, whenever a non-insured person would be rushed to the hospital for an emergency, it was the people who already had insurance who paid for that hospital visit through the increased costs of medical services and premiums.  With the enactment of the penalty, those non-insured people would be paying something into the system and thus help lower the costs. The penalty also incentivized young healthy people, who customarily did not buy health insurance, to do so. Thereby increasing the number of healthy people contributing to the marketplace, and if not lowering the cost, certainly slowing the growth of health insurance premiums. The Obamacare mandate was a crucial and essential part of the overall Affordable Care Act.

After it's repeal, the CBO is reporting that by the year 2025 the total number of uninsured Americans will hit 41 million, just 5 million less than the 2008 pre-ACA uninsured level. With that level of uninsured Americans, we are basically back to where we were in 2008 and it is fair to say that the Affordable Care Act is effectively repealed.

Where do we go from here?

The first step is to identify where the Affordable Care Act went wrong and why it was so easily repealed. There are several legitimate reasons why Obamacare was so unpopular, why GOP attacks were so effective and why it was subject to repeal so quickly after its enactment.  

First and foremost, the idea that a big part of the Affordable Care Act involves funneling billions of dollars to ‘for-profit’ insurance companies in order to incentivize them to provide lower cost health insurance programs was never going to be popular. Politically speaking, it is terrible optics in this age of surging populism and ripe for criticism. 

The mandate, which is an absolutely necessary element of the ACA, was politically toxic. Simply, the political language to force someone to buy insurance that a large corporation was going to profit off of is not good politics. 

Key elements of the ACA were ‘means tested’. A means test is a determination of whether a family is eligible for government assistance based upon whether that family possesses the means to do without that help. For what it’s worth, means testing is also politically toxic. The reason means testing is so unpopular, versus universal programs such as Social Security, is because the benefits are denied to a large number of people who are forced to pay for them. Additionally, means testing benefits hurts people who are just above the cut off point.

Universal benefits, such as Social Security create a sense of solidarity, shared understanding and thus make those programs much harder to repeal. Means tested benefits create animosity, division, misunderstanding and an “us versus them” dynamic.

When the Democratic party retakes control of the levers of power, they could reinstate the repealed provisions of the Affordable Care Act, but that would be futile. Due the unpopular and politically toxic parts of the program, it is not possible that the ACA can survive the assaults from the right. The Democrats must change their party platform, move away from the market based insurance system and adopt a ‘Medicare-For-All’ single payer system. The pragmatic incremental approach to advancing universal healthcare coverage proved to be a failure. The Democratic party needs to adopt big bold progressive ideas to further differentiate itself from the rotten Republican party. Only a defensible universal program will be able to withstand the assault from the Republican Party.