December 27, 2016

A Repeal Balancing Act

Tracy C. Miller

Senior Policy Research Editor
Summary

Repealing the Affordable Care Act would be politically difficult, in large part because Americans with low incomes or with pre-existing conditions benefit from it. In the long run, entrepreneurs may be able to devise market solutions to the problem of pre-existing conditions. But for the present, many with high health risks would need assistance to afford higher premiums if the Affordable Care Act is repealed.

Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

Repealing the Affordable Care Act was one of the most important promises that President-elect Donald Trump made during his campaign. With Republicans controlling both houses of Congress, few obstacles now stand in the way.

Repeal, however, is problematic because many Americans now depend on the Affordable Care Act for health coverage. This brings us back to one of the dilemmas that first led to the health care law's passage: How can we preserve coverage for high-risk patients without forcing costly coverage on low-risk patients? A partial Affordable Care Act replacement that balances the greater accountability of a market with some protection for those who are now relying on the insurance exchanges would be a better choice.

The health care law has enabled many people who did not have coverage in the past to get health insurance by providing subsidies that are a function of income, expanding Medicaid coverage and prohibiting insurers from charging higher premiums for those with higher health risks. These benefits came at a high cost, particularly to young and healthy people who might like to purchase insurance in the individual market but face high premiums.

Affordable Care Act rules, which don't allow insurers to deny people coverage based on pre-existing health conditions, make it possible for some people to game the system. For example, people can wait until they get sick before purchasing health insurance and then drop that coverage after they become healthy again. The health care law has also resulted in insurance companies incurring large losses, resulting in some of them withdrawing from the exchanges.

Continue reading