Urban Institute: Implications of Partial Repeal of the ACA through Reconciliation

By Clive Riddle, December 9, 2016

CNBC called it the Obamacare Doomsday Scenario: the Urban Institute has released a 33-page brief - Implications of Partial Repeal of the ACA through Reconciliation - examining what would happen if the new congress goes forward with an ACA partial repeal with a replace to be named later – using a reconciliation bill similar to one President Obama vetoed in January 2016. Their analysis determined that “the number of uninsured people would rise from 28.9 million to 58.7 million in 2019, an increase of 29.8 million people (103 percent).”

The Urban Institute points out that “there is currently no consensus around alternative health policies to enact as the ACA is repealed; consequently, partial repeal via reconciliation without replacement is possible and merits analysis.” The scenario they lay out is that “Congress is now considering partial repeal of the Affordable Care Act (ACA) through the budget reconciliation process. Since only components of the law with federal budget implications can be changed through reconciliation, this approach would permit elimination of the Medicaid expansion, the federal financial assistance for Marketplace coverage (premium tax credits and cost-sharing reductions), and the individual and employer mandates; it would leave the insurance market reforms (including the nongroup market’s guaranteed issue, prohibition on preexisting condition exclusions, modified community rating, essential health benefit requirements, and actuarial value standards) in place.”

Here’s some highlights from their report of what is in store for us if the scenario takes place:

• The share of nonelderly people without insurance would increase from 11% to 21%
• 22.5 million people will become uninsured as a result of eliminating the premium tax credits, the Medicaid expansion, and the individual mandate
• An additional 7.3 million people will become uninsured because of the near collapse of the nongroup insurance market.
• 82% of the people becoming uninsured would be in working families, and 80% of adults becoming uninsured would not have college degrees.
• 38% becoming uninsured would be ages 18 to 34, and 56% would be non-Hispanic whites.
• There would be 12.9 million fewer people with Medicaid or CHIP coverage in 2019.
• Approximately 9.3 million people who would have received tax credits for private nongroup health coverage in 2019 would no longer receive assistance.
• Federal healthcare spending would be reduced by $109 billion in 2019 and by $1.3 trillion from 2019 to 2028 because Medicaid expansion, premium tax credits, and cost-sharing assistance would be eliminated.
• State spending on Medicaid and CHIP would decrease $76 billion between 2019 and 2028.
• The newly uninsured would seek an additional $1.1 trillion in uncompensated care at the state/local level between 2019 and 2028.
• The 2016 reconciliation bill did not increase funding for uncompensated care beyond current levels.
• If Congress partially repeals the ACA with a reconciliation bill like that vetoed in January 2016 and eliminates the individual and employer mandates immediately, in the midst of an already established plan year, insurers would suffer substantial financial losses (about $3 billion); the number of uninsured would increase right away (by 4.3 million people); at least some insurers would leave the nongroup market midyear.