Healthcare Platforms
 
 
 

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

    The overriding drive to repeal and replace the Affordable Care Act, otherwise known as Obamacare, is the major unifying component of the Republican health care agenda and GOP presidential nominee Donald Trump’s health care position.

    The Argument for Repealing the ACA
    Republican critics argue the problem with the ACA is not the underlying premise of universal access, but that the ACA is an overreach by government. Furthermore, they say it creates an entitlement that will explode federal spending unless costs are reined in and the trend lines indicate the ACA is not controlling costs.

    Their argument of government overreach extends to the ACA’s mandate that all citizens be enrolled in health plans. They argue it is a failure both because it unfairly forces people to buy insurance and because it hasn’t helped insurance companies build large enough pools of healthy people to counteract a surge in enrollment by people needing treatment immediately.

    Trump and Ryan Have Plans to Replace the ACA

    Trump and House Speaker Paul Ryan have laid out competing plans for replacing the ACA.

    Both plans include:

    • Elimination of the individual mandate;
    • Increased support of tax-favored health savings accounts;
    • A rollback of the expansion of Medicaid and giving states a block grant or fixed amount per capita to run it;
    • Allowing the sale of insurance across state lines; and
    • Offering tax credits or deductions to everyone buying insurance in the individual market.

    Both have endorsed one of the most popular provisions of the ACA, the coverage of pre-existing conditions, but Ryan would allow insurers to consider such conditions in cases where individuals have not maintained continuous coverage.

    Medicare is one point of difference between the two plans: Trump has vowed to preserve the program, while Ryan would transform it into a voucher program.

    An additional point of contention between the plans is allowing Medicare to negotiate drug prices. Trump has called on Medicare’s market power as a means of reining in drug prices, while Ryan’s plan is silent on the issue.

    Neither Trump nor Ryan predict how much their plans would shrink or expand the ranks of the insured, or how much they would save or cost the federal budget.

     


    We asked our experts to weigh-in on whether the Republican health care plans are likely to improve the American health care system and the health of individuals:

    Dana Goldman, Ph.D. says the GOP plan will require either large subsidies or very inexpensive premiums in the absence of an individual market:
    “A well-functioning insurance market requires sufficient numbers of healthy people paying into the risk pool. In the absence of an individual mandate, a GOP plan will likely require either large subsidies or very inexpensive premiums to attract the so-called ‘young invincibles.’ Rolling back the Medicaid expansions may only exacerbate this problem.”
    Jeffrey McCombs, Ph.D. says Paul Ryan went partway towards a comprehensive solution—a universal voucher system—which would give consumers choice while ensuring access to care:
    “Both the Republican and Democratic plans for replacing the ACA only nibble around a comprehensive solution and are too complicated. A universal voucher program, supported by a payroll tax, is a free market solution that would give consumers choice while also ensuring access to care. Paul Ryan’s plan went partway towards this approach but it needs to go farther to really improve the American health care system.”
    Erin Trish, Ph.D. says health care is local so allowing the sale of insurance across state lines unlikely to result in significant improvements:

    “Allowing the sale of health insurance across state lines is very unlikely to result in significant improvements in health insurance or reductions in cost. Health care is local, and insurers need local provider networks to be able to market attractive plans. Yes, some states have more regulations than others, but this is not the main driving force of health insurance premiums. Moreover, the demand for these products is not there. The ACA includes provisions to allow states to enter into “compacts” that would allow insurers to sell products in all participating states; to date, no states have entered into such arrangements.”

    EXPERTS ON THE GOP PLAN TO REPEAL THE ACA

    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

    Jeffrey McCombs, Ph.D.
    Jeffrey McCombs, Ph.D.

    Director of Graduate Studies, Schaeffer Center

    Associate Professor, Clinical Pharmacy and Pharmaceutical Economics & Policy

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

    Assistant Research Professor, USC Price School of Public Policy

     

    “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

    MEDIA CONTACT

    Kukla Vera
    Director of External Affairs
    Phone: 213-821-7978
    kuklaver@healthpolicy.usc.edu

    Leonard D. Schaeffer Center for Health Policy and Economics


    POLICY CONTACT

    Stephanie Hedt
    Policy Communications Associate
    Phone: 213-821-4555
    hedt@healthpolicy.usc.edu