Why Republican Health Reform Ideas Are Likely to Fail

Obamacare is squarely in the cross hairs of the incoming Trump administration and congressional Republicans: Both the president-elect and Republican congressional leaders have said they plan to repeal and replace the sweeping health care law. What comes next? They’ve assured the public there will be an orderly transition, and that Americans who don’t have insurance through an employer will still have choices of stable, affordable, high-quality coverage.

Republican leaders have suggested a few ideas, including creating high-risk pools for people with pre-existing conditions, allowing interstate health plan competition, expanding the availability of health savings accounts and providing tax subsidies for individuals with low incomes. President-elect Donald Trump also has said he wants to keep Obamacare’s requirement that insurers cover those with pre-existing medical conditions. Most important is what Republicans say won’t be in their plan: a mandate for Americans to purchase health insurance.

This set of policies is highly unlikely to result in stable, affordable, high-quality coverage choices. I should know: As Rhode Island’s health insurance commissioner from 2005 to 2013, I was responsible for trying to implement a system that made many similar promises. What we found, in the end, was that without a requirement to buy, many healthy people opt out of insurance, resulting in an unstable market that requires heavy regulation with limited choices. Republicans are likely to face the same challenges with their favored reforms in the years ahead.

For eight years, during my tenure as health insurance commissioner, my office was statutorily charged with “directing health insurers towards policies that improved the health system” in the state. The individual insurance market — the market for those who do not receive insurance through an employer — was perhaps our biggest challenge.

We had all the elements Republicans are considering in “repeal and replace” proposals. Insurers could not exclude benefits or deny coverage based on pre-existing medical conditions. We had a de-facto high risk pool for sick people, paid for by the healthy enrollees. Enrollment in this “sick pool” was limited to one month a year so people could not enroll and dis-enroll based on medical needs. Older enrollees could be charged a maximum of three times more than younger people. The local nonprofit Blue Cross and Blue Shield plan even provided a small amount of subsidies out of its own reserves for low-income people. To attract more healthy people, catastrophic-only, high-deductible coverage was available — with and without health savings accounts.