Republicans May Not Be Able to Find a Replacement for Obamacare

by | Dec 23, 2016 | Media Releases

FOR IMMEDIATE RELEASE

DALLAS – December 22, 2016 – Finding a replacement for Obamacare that their colleagues will support may prove to be an impossible task for Republicans on Capitol Hill, says a health economist familiar with the obstacles involved.

“All Republicans want to repeal and replace Obamacare,” says John Goodman, who is president of the Goodman Institute and is often referred to as the Father of Health Savings Accounts. “Many Democrats would also like major changes. But there may be no practical way to get that done.”

Goodman says four huge political constraints stand in the way.

  • Most members of Congress — whether Republican or Democrat—will not vote for a plan that takes health insurance away from 23 million people. That means those who have been insured by Obamacare are going to have to be grandfathered to some degree, so they can keep the insurance they now have. Only one Republican proposal actually does this.
  • To pay for the subsidies for those 23 million people, most replacement plans are proposing a Republican version of a Cadillac plan tax on employer-provided health insurance. Yet Donald Trump says he wants to lower taxes on the middle class not raise them, and most Republicans in Congress are on record as opposing a Cadillac tax.
  • While imposing a Cadillac tax, most replacement plans would at the same time repeal all other Obamacare taxes – including taxes on insurance companies, drug companies, big business and big labor. This risks creating a politically toxic image of a shift in the tax burden from special interests to ordinary workers.
  • To lessen the burden of the Cadillac tax, some plans (including Speaker Ryan’s plan) would keep Obamacare’s cuts in Medicare payments to doctors and hospitals – cuts that Republicans themselves have warned could threaten access to care for future beneficiaries. But the same proposal abolishes Obamacare’s Medicare payroll tax on high income earners – creating a politically dangerous image in which costs are shifted from the very rich to the elderly and the disabled.

“Obamacare at least had the appearance of fairness” said Goodman. “Every sector had to bear part of the burden of reform. The Republican proposals, by contrast, are great for K Street and great for the top 1 percent, but they shift the burden of insuring the uninsured to those least able to pay for it.”

“Politically, that’s a hard sell — even to Republican voters,” he added.

See more at Why The Republicans Don’t Have An Obamacare Replacement Plan.

About Goodman Institute

Led by Dr. John C. Goodman, the Goodman Institute for Public Policy Research (GIPPR), is a nonprofit, nonpartisan public policy research organization that promotes private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector. Topics include reforms in health care, taxes, and entitlements. Visit www.goodmaninstitute.org.

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