5 reasons why Obamacare might survive — and grow

Posted at 1:30 PM, Apr 12, 2017

President Donald Trump and virtually every Republican running for office in 2016 vowed to “repeal and replace” the Affordable Care Act, aka Obamacare. After failing even to bring the Republican substitute, or Trumpcare, to a vote last month, the Republicans are in retreat.

After Speaker Paul Ryan pulled the GOP health care bill, President Trump indicated that he thought Obamacare would die on its own, saying in a tweet, “ObamaCare will explode and we will all get together and piece together a great health care plan for THE PEOPLE.” 

That raised a new question: Would the Trump administration actively try to undercut the Affordable Care Act through unilateral, executive actions? That could pose big risks if consumers suffer and blame Trump and the Republicans.

Though it is still early in the term, indications are that the Trump administration will not handicap Obamacare while it is still the law. Combined with recent reports about the economic state of insurance marketplace and the lack of Republican consensus, there is reason to think Obamacare may endure and expand.

Here are five reasons why:

1. The Department off Health and Human services quietly announced this week it will continue to reimburse insurance companies for the reductions in deductibles and other out-of –pocket costs the ACA requires them to give to low income consumers. This was a crucial decision and the administration could have decided not to continue the reimbursements, which would have destabilized the market.


These payments are called “cost-sharing” subsidies and they are anathema to many conservatives who see them as corporate welfare and social welfare. In fact, House Republicans filed a lawsuit arguing the “cost-sharing” payments were illegal because they were expenditures not approved by the proper congressional appropriations process.

But insurance companies rely on these payments and needed to know immediately if Trump and HHS Secretary Tom Price were going to pull the plug on them. If they did, some companies were likely to pull out of some markets. That could possibly have started the kind of explosion Trump talks about. Now that won’t happen.

2.  The argument that Obamacare is in a death spiral has been undercut by a new actuarial report by Standard & Poor’s.  The report examined insurance companies offering individual coverage — Obamacare insurance — in more than 30 states. It found that insurers reduced their losses significantly last year and most companies will break even this year and many could earn modest profits 2018.

The insurance “market is not in a ‘death spiral,’” the report said. This affirmed the conclusions reached by the Congress Budget Office in March during the House debate over Trumpcare.

3. The threat of repeal by legislation wanes by the week. The House Republicans failure to even vote on their legislation revealed there is nothing close to a Republican consensus about how to replace or even reform Obamacare. Senate Republicans are even more leery of the radical changes that House conservatives are insisting on.

4. A genuine grassroots opposition movement has formed intent on saving Obamacare and harpooning Trumpcare.  Many members are besieged in their Capital Hill  offices and when they go back home.  Republicans in the middle-flank are especially vulnerable to that kind of pressure. Skeptics suspect this insurgent energy will sputter out soon, but activists are sure it won’t.  The costs of gutting Obamacare weigh more heavily as Republicans calculate their re-election prospects.

5.  Public opinion has shifted substantially as “repeal and replace” went from a campaign slogan to a law that potentially cost people their health insurance. In the four years before the 2016 election, Americans consistently disapproved of Obamacare inpolling. That flipped after the inauguration. Polls in February and March showed Americans approved of Obamacare, were wary of change and did not like what they were hearing about Trumpcare.

That adds up to a possible scenario where Obamacare not only survives, but is improved and expanded.