How to Replace Repealed Obamacare: Use Medicare

From President-elect Trump on down, the Republicans taking charge of our country are determined to make good on their pledge to repeal the Affordable Care Act. Congress has now taken the first step toward doing just that.

But the next steps are likely to prove far more complicated. The challenge is not simply more forceful opposition from congressional champions of Obamacare, as the ACA is known. It is that simple repeal without any replacement threatens to throw 20 million Americans off of their health insurance plans.

This will not only work hardship among innocent citizens, it will also sow chaos throughout our massive health care industry and, therefore, our broader economy as well.

Against such a backdrop, ACA defenders in Congress will have valuable tools to help them preserve Obamacare. Not least will be thousands, maybe even millions of livid phone calls from health insurers, medical professionals, and ordinary citizens worried about their insurance, careers and industries. At least this is so if the GOP's quick scrapping of plans to weaken House ethics rules is any indication.

Members of Congress from both parties in both houses are mindful of this conundrum. It is why advocates of ACA repeal are scrambling to develop plans by which to "phase in" repeal rather than doing it all in one fell swoop. But this is far easier said than done. There are multiple proposals that differ on many details, with no clear winner apt to gain widespread support. (Remember how long it took to secure agreement on the details of Obamacare itself?)

More important even than lack of agreement here is the underlying source of the disagreement. The fundamental problem is that it is simply impossible, financially speaking, to retain what lawmakers and the public wish to keep of Obamacare without also preserving what would-be repealers loathe most. You cannot, without bankrupting insurers, prohibit preexisting condition exclusions and annual or lifetime spending caps without also mandating insurance purchases by individuals and large employers as ACA does.

What, then, are would-be repealers to do? How are we to "replace" Obamacare quickly given the impossibility of keeping its popular features without also keeping its unpopular features? And how are we to "repeal" Obamacare quickly without also replacing it quickly?

I have a simple proposal that offers a means of "having things both ways." Why not include in any repeal legislation a provision that entitles anyone losing Obamacare coverage immediately to enroll either in Medicare, or in the same federal employee insurance plan that likely will once again cover lawmakers and their staffs once they lose the Obamacare coverage they required for themselves? Do for ordinary repeal victims, in other words, what we'll be doing for Congress itself.

This proposal wouldn't be logistically difficult. Such enrollment could be made either permanent or temporary - in essence, for the duration of however long it takes Congress to develop an acceptable long-term alternative to Obamacare. We could either charge according to the present Medicare pricing system, or, better, charge each beneficiary whatever he or she now pays under Obamacare. Congress should be able to decide on these simple options quickly, given its eagerness to repeal Obamacare as soon as possible.

I don't think this proposal is politically unrealistic, even though there will be opposition as there always is in connection with changes in health care. Would-be repealers in the Republican Party should sign on because it enables them to repeal Obamacare immediately, without causing harm and angering 20 million constituents suddenly deprived of health insurance. They can then take as long as they need to develop a long-term replacement for Obamacare.

More "progressive" members of Congress have wished for decades to move to a single-payer health insurance system like taxpayer supported Medicare under which the government pays private providers, or to the federal employee insurance plan that offers a menu of state and national policies from private insurers. Such plans have greater bargaining power with health providers and broader coverage potential. As it happens, President-elect Trump himself has been supportive of single-payer health insurance plans, and for the same reasons.

Of course my proposed "Medicare Stopgap," as I'll call it, would not go entirely unopposed. Private, for-profit health insurers might resent competition from the far more efficient Medicare system. And suppliers of expensive medical services and prescription drugs might resent Medicare's bargaining power. Some conservative members of Congress, for their part, seem to think any form of governmental involvement in marketplaces is illegitimate, even when it is more efficient than private counterparts.

So yes, there will be opposition here as there is to all healthcare-related proposals. But I'll wager the Medicare Stopgap plan ultimately draws far more support from the White House and Congress than any alternative. For it is the only way to repeal Obamacare quickly without bringing both chaos and calamity.


Robert Hockett is Edward Cornell Professor of Law and Professor of Public Policy at Cornell University, Senior Counsel at Westwood Capital, and a Fellow of The Century Foundation.