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Obamacare Architect: The Real Victims of Repeal

Last week, Senate Republicans released their draft bill to repeal and replace the Affordable Care Act (ACA), also known as Obamacare. The Better Care Reconciliation Act (BCRA) is, at face value, punitive to anyone who is not young, healthy, and wealthy. Yet the Senate health care bill does more than just hurt average American patients—15 million of whom would lose insurance next year alone—it also leaves state governments to foot the bill.

The Republican bill will roll back funding for Medicaid, leaving states to grapple with a $772 billion deficit over the next 10 years. The Congressional Budget Office (CBO) estimates that by 2026, an astounding 15 million current Medicaid recipients will be uninsured—plus an additional seven million in the non-group market. The BCRA will also change how Medicaid is funding, dismantling the federal government’s open-ended commitment to cover all medical costs to a per capita cap. Worse yet, this cap is indexed by the Consumer Price Index, which increases much more slowly than health care costs. The CBO estimates that the difference will eventually compound such that “despite being eligible for premium tax credits, few low-income people would purchase any health plan.” As the federal government walks out on low-income Americans, it will be up to states to pay the difference.

Even with worse insurance, uninsured Americans will still get sick, and still incur health care costs. Patients who gained insurance under the ACA’s Medicaid expansion—some 12 million Americans—will once again be uninsured. In states that need the current level of federal funding to provide Medicaid, uncompensated care costs will rise. Previous analyses of ACA repeal through reconciliation suggest that the newly uninsured could seek up to $1.1 trillion in uncompensated care costs from 2019 to 2028 alone. Additionally, despite the $128 billion over 10 years that the bill shunts towards state high-risk pools, critics say this is far from enough. Most of these patients, according to the AARP, could face premiums of over $25,000 a year. A meager $128 billion will not cover them all.

The BCRA will also force politically toxic decisions on state legislators. The bill creates a new, easier waiver process that would allow governors to opt out of key ACA provisions, like essential health benefits. State Medicaid programs could choose to no longer cover maternity care or mental health services, while still charging Americans higher premiums. The CBO predicts that since states will be allowed to opt out of providing some essential health benefits, at least half of the population will see a “substantial increase” in out-of-pocket costs. More troubling still, these changes are not isolated. If just one state decides to eliminate its essential health benefits, insurance protections would be weakened in every state. We cannot expect liberal states to pick up their Republican counterparts’ slack.

States will also face financial fallout from the BCRA’s tax windfall for the wealthiest Americans. A previous Commonwealth Fund analysis of the House health care bill, which has already passed and from which the Senate bill does not widely differ, found that dismantling the ACA’s taxes would cause over 900,000 jobs to be lost, gross state products to drop by $93 billion, and business output to decrease by $148 billion by 2026. Over 10,000 jobs and $1 billion in gross state outputs would be lost in Kentucky, a commonwealth that went solidly to Trump in the 2016 presidential election, alone. A Fitch Ratings Report on the BCRA came to a similarly sobering conclusion. “The 2020 and 2021 implementation for most Medicaid provisions [under the BCRA],” the authors note, “would likely result in pressure on states to cut funding to local governments, public colleges and universities, and healthcare providers.”

The Better Care Reconciliation Act, despite its name, will not improve health care in the U.S. Millions of Americans will lose coverage, and those remaining will be paying more money for less generous health insurance. As the federal government tries to remove itself from the business of health insurance, states will be left to bear the burden. We cannot expect all states to step up to the plate. Republicans should accept responsibility for their cries to repeal and replace the ACA, and not leave states to worry about how to actually implement such demands in reality.

Ezekiel Emanuel is vice provost for global initiatives, Diane v.S. Levy and Robert M. Levy university professor, and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania. Emily Gudbranson and Aaron Glickman are Emanuel’s senior research fellows.