How ObamaCare Could be Defunded Starting in 2017, Before a Replace Plan is Enacted

The GOP has promised to repeal and replace ObamaCare, but step one might be a repeal of ObamaCare through the budget reconciliation process. Step two, “the replace part,” could come after the 2018 mid-term elections when many Republicans in Congress will attempt to win seats. This could begin to affect coverage as early as 2017 (although a “delay” of the implementation of repeal measures is likely), and Congress has already begun the process.

TIP: The image above features a conservative estimate of the cost of an ObamaCare repeal. Estimates vary widely based on what might be repealed and what might be replaced. Learn more about the cost of repeal.

What Does it Mean to Repeal ObamaCare Through Budget Reconciliation?

What does it mean to “repeal of ObamaCare through the budget reconciliation process?”

It means that the parts of the ACA that can be defunded by striking them from the budget may be repealed while the rest of the law stands. This process involves a few parts including “budget resolution” (get the details here).

  • Aspects of the Affordable Care Act that can be changed through reconciliation include cost assistance, Medicaid expansion, and the individual and employer mandates.
  • Elements that would likely remain in place include guaranteed issue, the prohibition on preexisting condition exclusions, modified community rating, essential health benefit requirements, and actuarial value standards.
  • This could, by extension, affect the cost of health insurance, as insurers would be forced to cover everything and follow ratios, but people wouldn’t have cost assistance.
  • Why would anyone do this? This would break ObamaCare and ensure the GOP kept its “repeal ObamaCare” promise. One can expect people to be increasingly angry with “ObamaCare” as it is gutted and loses its ability to help people. The GOP could then sweep in with a “new program” and save the day, making it look as though they were saving America from the Democrat’s “broken” healthcare.

TIP: Below is an analysis of the effects of a repeal via reconciliation from the Urban Institute.

FACT: The uninsured rate is at an all-time low under the Affordable Care Act. Reconciliation potentially not only costs low-income Americans their health care, but it is also bound to drastically increase the uninsured rate. If this does not bring costs down for the middle-class, then it means higher uninsured rate, high costs, no cost assistance, and millions left uninsured.

the Urban Institute Report on the Implications of Partial Repeal of the ACA through Reconciliation

FROM THE URBAN INSTITUTE: In this brief, we compare future health care coverage and government health care spending under the ACA and under the passage of a reconciliation bill similar to one vetoed in January 2016. The key effects of the passage of the anticipated reconciliation bill are as follows:

  • The number of uninsured people would rise from 28.9 million to 58.7 million in 2019, an increase of 29.8 million people (103 percent). The share of non-elderly people without insurance would increase from 11 percent to 21 percent, a higher rate of uninsurance than before the ACA because of the disruption to the non-group insurance market.
  • Of the 29.8 million newly uninsured, 22.5 million people become uninsured as a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate. The additional 7.3 million people become uninsured because of the near collapse of the non-group insurance market.
  • Eighty-two percent of the people becoming uninsured would be in working families, 38 percent would be aged 18 to 34, and 56 percent would be non-Hispanic whites. Eighty percent of adults becoming uninsured would not have college degrees.
  • There would be 12.9 million fewer people with Medicaid or CHIP coverage in 2019.
  • Approximately 9.3 million people who would have received tax credits for private non-group health coverage in 2019 would no longer receive assistance.
  • Federal government spending on health care for the non-elderly would be reduced by $109 billion in 2019 and by $1.3 trillion from 2019 to 2028 because the Medicaid expansion, premium tax credits, and cost-sharing assistance would be eliminated.
  • State spending on Medicaid and CHIP would fall by $76 billion between 2019 and 2028. Also, because of the larger number of uninsured, financial pressures on state and local governments and health care providers (hospitals, physicians, pharmaceutical manufacturers, etc.) would increase dramatically. This financial pressure would result from the newly uninsured seeking an additional $1.1 trillion in uncompensated care between 2019 and 2028.
  • The 2016 reconciliation bill did not increase funding for uncompensated care beyond current levels. Unless different action is taken, the approach will place very large increases in demand for uncompensated care on state and local governments and providers. The increase in services sought by the uninsured is unlikely to be fully financed, leading to even greater financial burdens on the uninsured and higher levels of unmet need for health care services.
  • If Congress partially repeals the ACA with a reconciliation bill like that vetoed in January 2016 and eliminates the individual and employer mandates immediately, in the midst of an already established plan year, a significant market disruption would occur. Some people would stop paying premiums, and insurers would suffer substantial financial losses (about $3 billion); the number of uninsured would increase right away (by 4.3 million people); at least some insurers would leave the non-group market midyear harming consumers financially.
  • Many, if not most, insurers are unlikely to participate in Marketplaces in 2018—even with tax credits and cost-sharing reductions still in place—if the individual mandate is not enforced starting in 2017. A precipitous drop in insurer participation is even more likely if the cost-sharing assistance is discontinued (as related to the House v. Burwell case) or if some additional financial support to the insurers to offset their increased risk is not provided.

This scenario does not just place the country back in the situation we were in before the ACA. It moves the country to a situation with higher numbers of uninsured people than was the case before the ACA’s reforms. The federal government would have to raise new taxes, substantially cut spending, or increase the deficit to replace the ACA after reconciliation with new policies designed to increase insurance coverage.

What do you think?

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Vernee Fryer on

I think the whole idea of republicans wanting to repeal the Obama Care is disgusting! I am one of the people that would be affected significantly by this if it should happen!
Many of us have medications that are extremely expensive and we wouldn’t be able to afford them without governement assistance. Insurance companies would go back to implementing pre existing condition clauses to those with health problems seeking health insurance.
This is going to place the country backwards and cause another huge deficit perhaps even record breaking one.
I am very concerned as an American citizen. Congress needs to make sure everyone has equal access to health insurance coverage regardless! Trump is screwing over the poor and working class individuals.

Wali Al-Amin on

Stop the repeal it will hurt millions of Americans people. The mandate most remain, the expansion of Medicare most continue. Health care budget must be funded. The tax credit must be granted because of group coverage rate market. This very beneficial to the American people. This keep many Americans insured and protected health wise. Trump and others looking for money to fill their pockets with companies without the interest of American people. This is first time cost been this low for health insurance coverage for the American people. Stop them from fleecing the American people from staining a quality life.

Lori Petersen on

If Trump was looking just to line his pocket, he would not of said he will only get paid $1/year in office, nor would he have taken steps and put his businesses in a trust where he has no control of them while he is president, and mandated that those businesses will not do foreign or any other trade that might be construed as taking advantage of his presidential ties. Obamacare is actually a taxation. What is very frustrating is it hasn’t lowered our healthcare costs for the rest of us, but made it vertually unaffordable. The whole government program needs revamped to help low income families. They deem this as free, nothing is free, someone has to pay, and if you are not going to get off your duff and contribute to society, why should you receive the benefits? instead of giving them free or lower cost items, teach them better budgeting, healthier food choices etc. and put time limits on the assistance if they are not actively job hunting. Stop enabling generations of this abuse. It doesn’t take a rocket scientist to wash dishes at a resturant, clean businesses, run a cash register, or flip burgers. Many of these people aren’t working because they can get more $ from the government by not working, this is backwards and not even remotely right with the theory that democrates are pushing with equal opportunities for everyone. People seem to forget that not only was our government built on the prinicple of equal rights and freedom from religious/racial prosecution but also founded from the sweat of ALL our labors to build for OURSELVES. People wanted change, better national trade deals, not having to foot other peoples bills. With so many groups outcrying “I am descrimated against, they don’t realize that those very people are running over the rights of others. That isn’t a racist comment at all, but a compassionate step back from the situation and a clearer look. People are tired of it all. Thus we voted for change.

ObamaCareFacts.com on

Honestly, your first bit about Trump is inaccurate. We are worried he will make his business money via policy. Congress is paid very little, this is part of why they turn to corruption. The President was never supposed to profit from the job, Trump taking $1 is a good show of faith. I approve.

But this is like Bill Gates turning down a speaking fee at a non-profit. Oh, very cool… not very meaningful though.

On the rest, your heart seems in the right place, I won’t pick apart every point about wage workers and individual responsibility. Just know, you are parroting back some stock GOP talking points here. They don’t all line up with reality.

Doug on

How about a living wage? Not everyone that gets assistance sits home on their butt. Some work two and three jobs and get paid peanuts. And if we don’t have them insured now they will just go to the emergency room and still cost you money probably even more.

Lee on

Im reading this from the UK. It’s sad to know that millions of people in the US cannot get healthcare. We have the NHS in the U.K., but due to health tourists from the East, Middle East and Africa it’s slowly being run into the ground as they leave the country without paying. Steps are being put in place to prevent this. I hope you get an affordable solution. It’s very sad to hear and see.

Anna on

Not all people on Medicaid are free loaders. My daughter and I are. My daughter is because she is disabled. She will never progress pass the abilities of a 2-3 year old. She needs constant care. We live with my mother who is elderly. She can’t watch her while I go out to work. She has her own medical problems. My now ex-husband left us when she was 3 months old. He refuses to pay child support and his state refuses to look for him to make him pay. I want to work. I worked from the time I was 15 until my daughter was born when I was 35. Daycare wouldn’t take care of her because of her medical issues. There was nobody here to watch her. I had to give up my teaching job, my apartment and my car to care for her and move back home. Not all of us consider medicaid a freebie. Any idea how humiliating it is to live the kind of life I live? Before anybody tells me to get off my fat butt and get a job, I have tried. The amount of hours I am able to work are so limited due to doctor appointments, days off of school, sickness and hospital stays that nobody will hire me. I’m open to all reasonable/serious suggestions.

Anna on

(Edited)

Not all people on Medicaid are free loaders. My daughter and I are on Medicare. My daughter is because she is disabled. She will never progress pass the abilities of a 2-3 year old. She needs constant care. We live with my mother who is elderly. She can’t watch her while I go out to work. She has her own medical problems. My now ex-husband left us when she was 3 months old. He refuses to pay child support and his state refuses to look for him to make him pay. I want to work. I worked from the time I was 15 until my daughter was born when I was 35. Daycare wouldn’t take care of her because of her medical issues. There was nobody here to watch her. I had to give up my teaching job, my apartment and my car to care for her and move back home. Not all of us consider medicaid a freebie. Any idea how humiliating it is to live the kind of life I live? Before anybody tells me to get off my fat butt and get a job, I have tried. The amount of hours I am able to work are so limited due to doctor appointments, days off of school, sickness and hospital stays that nobody will hire me. I’m open to all reasonable/serious suggestions.

WILLIAM PAUL MCMICHAEL on

Only a moron would repeal Obamacare

James J. Jamison on

The irony in your comment is astonishing and yet, not surprising. Instead of providing an actual opinion consisting of factual information and perhaps a proposal or at the very least, a point of view demonstrates one of the major issues that this country has to deal with. If you honestly believe that Obamacare (which was essentially outlined and designed by a CREATIVE WRITING MAJOR) is a better choice than the competitive private insurance offered by companies able to compete across state lines which existed for decades previously, you are conclusively a prime example of why certain people should never be in politics or in a position of power. If you think that repealing Obamacare is going to damage a lot of people and cause them to lose medical coverage, you should check the historical record regarding the massive damage Obamacare did to not only patients, healthcare providers, hospitals, the medical community and institutions, and pharmacies but this country and it’s already crippled financial standing. Did you think that Trump becoming President was a fluke or did you think that maybe, just maybe, the country was looking for such a drastic change, it did what most “political experts” considered impossible. Electing a person who will shake up the system even at the risk of it resulting in something worse at first before it gets better rather than facing the outlined existing ACA and the horror of paying for coverage that although deemed the “Second Lowest Cost Silver Plan” which did not even cover the most basic of medical care. Hospitals and doctors turning patients away due to this coverage while accepting those with Medicaid/Medicare should blow your mind into pieces. I’m sorry but the fact that the very first act on the very first day of administration was passed by Congress is historical and an obvious sign that if we do not fight for change, we will be destroying an already crippled nation left by Obama. No one said it would be easy and no one said that people won’t suffer or lose coverage but you either take a risk or there is nothing to gain. Either stand quietly with a former corrupt administration or move aside for those who are willing to fight not just for themselves but also for you as well.

ObamaCareFacts.com on

Well written response… but, to be fair, you are in turn giving your opinion here.

If you do check the records you will see that the general healthcare industry, not ObamaCare, is the underlying problem (as prices are inflating faster than wages). Our care is great, our costs are high, ObamaCare got some right and some wrong, it included many Republican ideas, and now it is time to level it up and make it better.

The pro-Trump anti-Trump bias, just like the Obama-bias, has people in tizzy… but Trump isn’t King, he can’t magically fix things more than ObamaCare could magically get the public option included in the ACA.

I can note that some of your facts are correct, but an unbiased research job will also turn up lots of cost curbing the ACA has done and show that 20 plus million are newly covered.

When you say “oh, there will be sacrifices” you are talking about sacrificing someone else. That is more aggressive than taking the sacrifice yourself.

Lori Petersen on

Why is the government not starting the process by looking at what is driving the costs up? Start with the pharmaceutical companies 1st, drive those costs down, then work on the hospital (address the wastes and overcharging) and doctor costs. Realign those costs. People expect since those costs are so high and they are frustrated that their health insurance premiums are so high that the health insurace is too heavily relied on to defray the costs we are paying. People are also frustrated that low income people demand the government pay for their living, and that they don’t understand nothing is free. People who were considered middle class are sliding backward because they are struggling to pay for their own bills, let alone now having to foot bills for people who aren’t even trying. Put a time limit on a lot of the government subsididies, and rather than giving them “free things” teach them budgeting and healthier choices. Mandate that that is only what the food stamps will cover, fresh fruits, veggies, meat etc. Have job placements where they have to “earn their WIC and other government goods.