Why is Replacing Obamacare so Difficult?

As I write this there is uncertainty about how exactly Congress will proceed with dismantling Obamacare; but it appears that “Repeal” will happen well before the promised “Replacement” is ready.

It would be logical to wonder why writing a new health care law is such a difficult thing to do. The GOP has had plenty of notice- not only since the election in November- but since the law was signed in March 2010.

Why wasn’t a Replacement bill drafted years ago, to wait in the wings for just such an opportunity?*

There are three immediate problems in creating an Obamacare replacement:

  1. Health Care Reform is a goal that has evaded administrations on both sides of the political spectrum for the last 60 (plus) years;
  2. Many conservative ideas about how to address problems in our health care delivery system are already in the Affordable Care Act [ACA];
  3. Nothing the GOP can deliver will make the American public happy

I would like to briefly explain each point.

1. Health Care Reform is a goal that has evaded administrations on both sides of the political spectrum for the last 60 (plus) years

As evidenced by this chart (below), the American Health Care System is far more costly than other nations. More importantly, the growth rate of Medicare alone has become unsustainable, consuming a whopping 15% of the Federal budget in 2015. That is actually better than the 17.3% of the Federal budget spent in 2009 before the Affordable Care Act [Obamacare] was passed. But as we are about to abandon the ACA structure to rein in costs (which it has done) the GOP must deal with the financial realities of our health care system in their own, yet-to-be-revealed plan.

To add to the problem of how much we are spending, we are not buying better medical care with all that money. More people die in America from respiratory disease, more women sustain obstetric trauma while delivering babies, and we have higher rates of medical, medication, and lab errors– all as compared to “comparably wealthy countries.” [Kaiser] Perhaps most embarrassingly, the CIA lists us as 169th from the top in the hierarchy of child mortality rates in 255 countries.

The cost and quality conundrum is not new. Previous administrations, including those of Bill Clinton, Jimmy Carter, Richard Nixon, and Harry Truman all tried to alter how health care is delivered and financed in this country. In fact, the first President to fight for reform was FDR, “who announced in 1939 that “a comprehensive health program (is) required as an essential link in our national defenses against individual and social insecurity.”

To be fair, the inability of the GOP to propose a replacement for Obamacare that is widely accepted, even within their own party, follows history and reflects, at least in part, the enormity of the challenge.

2. Many conservative ideas about how to address problems in our health care delivery system are already in the Affordable Care Act [ACA]

It is widely known, but often forgotten, that the idea of an “Individual Mandate” is attributed to economist Stuart Butler in 1989 who was then a Director at the Heritage Foundation, one of the most highly regarded national conservative think tanks. As described by Steven Brill in America’s Bitter Pill:

“The way to fix healthcare, Butler reasoned, was rooted in a classic conservative principle: individual responsibility. An ideal plan would require everyone to buy health insurance, although those who could not afford the full cost would get the government’s help.” (Bitter Pill, pg. 30)

That idea became a core principle of the 2006 Massachusetts health reform law commonly known as “Romneycare” which was signed with fanfare by then Governor Romney with Heritage Foundation Senior Fellow Robert Moffit (“an icon of conservative orthodoxy”) in attendance to celebrate. (Bitter Pill, pg. 35) Underscoring the good bipartisan will that health care reform was granted pre-Obamacare, Senator Ted Kennedy was also at the signing ceremony, smiling over Governor Romney’s shoulder at the critical moment.

Heritage’s support of the idea of “personal responsibility” waned as The ACA came into fruition and the political furor began. By the time the constitutionality of the individual mandate was being challenged in court, the Foundation noted in an amicus brief before the 11th Circuit Court of Appeals “Heritage has stopped supporting any insurance mandate.”

Similarly, conservative voices dismiss Heritage’s role in designing the law which became the template for Obamacare.

But the Individual Mandate isn’t the only conservative idea contained in the ACA. As just a starting list I would name bundled payments [think Ronald Regan], working cooperatively with private insurance companies to administer Federal Medicare benefits [think George H. W. Bush] and directing payment toward quality as opposed to volume [think George W. Bush].

In fact, as a person who has been in health care for 38 years, and an author and professor of health law for the last 26, it shocks me how little in the ACA is actually new. It is as if the law adopted every attempt at reform from both sides of the aisle since the aforementioned FDR.

What I am trying to say is there is very little left on the table for the GOP to now create a solution that is entirely new and different. [Don’t even begin to mention “market-driven health care.” That idea is as old as I am.]

If all the ideas are already taken- what’s a Republican member of Congress to do?

3. Nothing the GOP can deliver will make the American public happy

Finally, this Congress [and new Administration] are facing the reality their predecessors faced- nothing in the realm of health care will make the American people happy.

As a country, we want accessible, high-quality, low-cost care. It is the cost that poses the biggest political problem.

European countries, as well as many others, chose decades ago to deliver care to their people through tax supported structures- but heaven knows Americans will not have that.

For the last 60 years, we have relied on employers to insures the majority of people in the country- as employees or dependents- but over time that system has proven too much of a burden on our businesses.

The only other alternative is to have the public start to pick up more of their own costs as they consume care. But it is the cost of care under the ACA that is the biggest source of outrage in our country- which put the wind beneath the wings of the overwhelming GOP victory in November. And the anger is specifically related to the high-deductible plans that have become so common since 2010.

But that leads to the real rub. Those high-deductible plans are neither dictated by, or mandated by Obamacare.

High-deductible plans are the decision of private insurance companies. The true irony is the “keep government out of medicine” party now must either dictate business practices to private companies (unlikely) or hold their breaths as they toggle something together called a “Replacement”- knowing that the thing Americans hate most will not change.

And all of the above is why you aren’t likely to see a “Replacement” any time soon.

*There have been plans authored by members of the GOP Congress, most notably Speaker Paul Ryan and Representative (and Dr.) Tom Price, the nominee for HHS Secretary. Neither have wide support, and both will be the subject of future Fontenotes.

Want to Know More?

For those of you who do not want to wait- here are the links to a summary of the Paul Ryan Replacement Proposal and a summary of Tom Price’s Bill

For an excellent review of the long history of health care reform in this country, please consider reading the excellent (and fascinating!) book by Paul Starr- Remedy & Reaction: The Peculiar American Struggle over Health Care Reform