Some changes in ObamaCare (ACA) seem inevitable, but Republicans have not been able to gather sufficient votes to make major changes. Under the Senate’s current filibuster rules, Republicans need 60 votes to repeal ObamaCare, but budget reconciliation rules allow a Senate majority (51) to make changes in the ACA related to revenue. Not one Democratic senator has supported changes up to this point. Meanwhile, the Republican senators remain divided among those who are very conservative and want to go as far as possible to repeal the ACA, and those moderates who fear a backlash from reducing benefits provided by it.
The ACA was the Obama Administration’s signature domestic legislation, and America has never repealed an entitlement program once enacted. Further complicating the situation is that at least half of the additional persons covered by ObamaCare, but not covered by the ACA directly itself, came from the ACA’s expansion of Medicaid eligibility. States were not forced to accept the broader coverage, but 29 states did so, including a number of states with Republican governors.
The current situation is not sustainable, at least in the long run. First, Medicaid spending grew some 18% in 2015 and 17% in 2016 in the states that expanded the coverage. Unsuccessful Republican proposals have attempted to move Medicaid to per capita spending with automatic increases for medical inflation, giving state governors the incentive and flexibility to manage their programs most efficiently. Second, the basic premise of the ACA was that enough younger and healthier persons would be induced to sign up so as to offset the enormous cost from subsidizing the premiums of older and less healthy people. That central purpose of the ACA has been unsuccessful. Third, many insurers are pulling out of the state exchanges as being unprofitable, so that over 40 counties in the U.S. have no insurers in the state exchanges and about 1,400 counties have only one insurer that will sell under the ACA concept, in spite of the steep premium increases under the ACA. One example is in Iowa, where the only insurer participating in the ACA just requested rate increases in premiums of nearly 45%. Large insurers like Anthem and Aetna are pulling out of most markets entirely. Finally, the so-called "Cadillac tax" is looming to take effect in 2020, which would require additional penalties if employers pay too much in insurance coverage for their employees.
Perhaps the situation has to get even worse to bring about the necessary compromises, including support from the Democrats, to make critically necessary changes. The changes might include modification of the current system or the institution of a different system. Some even believe that the ACA was designed to fail, in the hope that Americans would never do away with such additional healthcare coverage, and that therefore the only Congressional solution would be to go to a "single payer" system like Medicare for everyone.
The solution to these issues appears to be a long way off, but by necessity decisions must continue to be made under current law. The trend will continue of employers adopting consumer-directed health plans, which combine health savings accounts with high deductible insurance coverage. Such plans appear to be relatively cost-effective, and more employers are also using wellness programs. Look also for changes in the ways in which workers receive healthcare such as use of telemedicine and health clinics, and other ways to lower costs without shifting costs to workers.
In the meantime, the new Administration issued an executive order allowing federal agencies to make discretionary modifications to the implementation of the ACA, and undoubtedly much of that will occur. However, the modifications cannot rewrite the statute.
