Healthcare Platforms

    Could the GOP Plan to Replace the ACA Improve Health Care?

    On March 6, the republican leaders in Congress unveiled the house bill, the American Health Care Act (AHCA) to replace the Affordable Care Act (ACA). The Better Care Reconciliation Act (BCRA) was unveiled June 22 by Senate Republicans.

    Experts at the USC Schaeffer Center for Health Policy and Economics have conducted analysis  and written commentary about these policy proposals as well as broadly discussed what policymakers could do to improve the health care infrastructure and markets:  

    Why insurers struggle in the ACA marketplace

    “In recent weeks, some health insurers have announced that they will not offer individual market coverage in 2018, while others have requested sizable premium increases. In response to this news, President Donald Trump has pronounced the individual market structure created by the Affordable Care Act (ACA) ‘dead.’ Similarly, House Speaker Paul Ryan (R-WI) has claimed that the market is experiencing a ‘death spiral’ reflecting fundamental flaws in the ACA’s design. These claims misdiagnose the situation. The ACA’s individual market structure — though not perfect — is sound and has succeeded in greatly expanding coverage. As 2017 began, the market was poised to leave behind the growing pains of the past few years. Then the President and Congress acted to create needless turmoil,” wrote Paul Ginsburg and his colleagues at the Brookings Institution in the New England Journal of Medicine.

    Alternatives to improve U.S. health care, aid the economy


    “Healthcare costs are a threat to the entire economy, not just to business. Left to current market forces, those costs will result in higher government deficits, increased borrowing, and eventually higher taxes on everyone, both personal and corporate. By 2040, the government projects healthcare will consume one-quarter of the economy.

    “The connection between healthcare spending and the national deficit is rarely made in congressional debate. That is not a good thing. Healthcare costs are rapidly overwhelming both state and federal budgets, while raising costs for businesses that provide health insurance to their employees,” wrote Dana Goldman and Leonard D. Schaeffer, founder and CEO of WellPoint, in The Hill.

    In a separate op-ed published by The Sacramento Bee, Goldman and Schaeffer suggested that policymakers should look to California’s health insurance system as a model. Goldman can comment on the Senate bill, discuss model health care systems such as California’s, and explain how the ACA compares to congressional proposals.

    Uncertainty for ACA subsidies destabilizes the exchanges

    “The ACA requires insurers to cover cost-sharing subsidies to help low-income exchange enrollees pay out-of-pocket costs like deductibles and copays, with the understanding that they will be reimbursed by the federal government. However, these payments to insurers are currently subject to legal challenges, and the administration has been unclear regarding whether it intends to continue to fund them (or ask Congress to do so legislatively). Similarly, it is highly unclear whether the administration plans to enforce the law’s individual mandate, or whether they will actively support the marketing of policies during open enrollment.

    “In contrast to the indicated intention to promote market stability with the recent rule, this lack of clarity surrounding the future of the ACA’s cost-sharing subsidies and individual mandate instead injects a considerable degree of uncertainty regarding the short and long-term future of the exchanges” wrote Erin Trish in a commentary published by the Schaeffer Initiative for Innovation in Health Policy earlier this year.

    Medicaid cuts would burden families with special-needs kids

    “Children with chronic health conditions require a significant amount of care, and hiring a home health aide can be prohibitively expensive for a family. To maintain their child’s care, families often incur financial and emotional stress from reduced earnings,” found John Romley.  He recently conducted a study with Boston Children’s Hospital and Rand Corp., published by the journal Pediatrics, which calculated the value of medical care provided by family members at home for their special-needs children.

    Medicaid needs revamping but not reductions

    “State control of Medicaid was designed to foster experimentation and competition among states to provide efficient, high-quality care for the poor. And, the AHCA relies heavily on the logic that Medicaid will run better when states have greater financial responsibility and control.

    “However, rising inequality between rich and poor areas of the country has undercut this rationale. As poorer states fall farther behind, they become ever less capable of mustering the resources needed to protect the growing ranks of vulnerable children, adults and seniors among their constituents.

    “From this standpoint, further cuts to Medicaid – as envisioned by the AHCA – make little sense. Why make an underfunded program even more underfunded? Replacing Medicaid with an adequately funded alternative would make more sense than retaining the program and rendering it even less capable of aid to the poor.” wrote Darius Lakdawalla in an op-ed published by The Conversation in May.


    Dana Goldman, Ph.D.
    Dana Goldman, Ph.D.

    Leonard D. Schaeffer Director's Chair, Schaeffer Center
    Distinguished Professor of Public Policy, Pharmacy, & Economics at School of Pharmacy & Sol Price School of Public Policy

    Paul Ginsburg, Ph.D.

    Director of Public Policy, Schaeffer Center

    Director, Leonard D. Schaeffer Initiative for Innovation in Health Policy

    Erin Trish, Ph.D.
    Erin Trish, Ph.D.

    Assistant Research Professor, USC Price School of Public Policy

        Darius Lakdawalla, Ph.D.

    Quintiles Chair in Pharmaceutical Development and Regulatory Innovation, USC School of Pharmacy

       John Romley, Ph.D.

    Associate Professor of Public Policy, USC Price School of Public Policy

    Associate Professor of Pharmaceutical and Health Economics, USC School of Pharmacy​


    “Fixing the ACA is important, but replacing it with a durable plan to make health coverage broadly affordable will take time and constructive bipartisan collaboration.”
    Alice Rivlin, Loren Adler, and Stuart Butler on The Evidence Base


    Kukla Vera
    Director of External Affairs
    Phone: 213-821-7978

    Leonard D. Schaeffer Center for Health Policy and Economics


    Stephanie Hedt
    Policy Communications Associate
    Phone: 213-821-4555