The Disastrous Consequences of “Repealing without Replacing” the Affordable Care Act

Under the Affordable Care Act (ACA), the number of people with health insurance has reached an all-time high. Twenty million more people are now insured than prior to the ACA. Despite this success, we’ve heard the “repeal and replace” mantra since the ACA was passed six years ago. Now with control of the White House as well as both chambers of Congress, Republican leadership is changing its plans, proposing a rapid January maneuver to “repeal now and replace later.”

A new report by the nonpartisan Urban Institute documents the terrible consequences of this strategy. Repealing the ACA would double the number of uninsured Americans by 2019, reaching 58.7 million. This would be an even higher rate of uninsurance than before the ACA.   

Here are the specifics of Congressional Republicans’ strategy. First, they have committed to acting quickly in January 2017 (before the inauguration) to fulfill their promise to repeal the ACA. This would likely eliminate affordable coverage for millions of Americans. Republicans intend to use a budget process called “reconciliation” to fast-track the bill and allow it to pass with a simple Senate majority (preventing any filibuster). Second, the only way they can move so quickly is by repealing without a replacement, because replacing the law will be very complex, requiring time and much debate. So instead of offering a replacement that Members of Congress and the American people could consider and debate, Congressional leaders plan to delay enactment of the repeal for two to three years, giving themselves time to pass a replacement bill. However, even if they delay fully dismantling the ACA, Republicans could eliminate certain provisions right away, such as the tax penalty for individuals who fail to buy insurance (the “individual mandate”).

This approach is shortsighted and dangerous. Following are consequences of “repealing without replacing”:

  • The number of people with health insurance will sharply decline—reversing three years of major gains. Research suggests this will have immediate and long-term negative consequences for health and mental health as well as family economic security. For example, people without insurance are more likely to delay seeking care and more likely to file bankruptcy due to medical expenses.  
  • The drop in the number of people with insurance will likely start happening as soon as Congress passes repeal without a replacement. If what Congress passes immediately eliminates the individual mandate, some people will drop their insurance. Similarly, if the employer mandate is immediately repealed, some employers may opt to stop offering insurance. The longer Congress takes to pass a replacement, the more people will become uninsured. 
  • Insurers will be reluctant to sell Marketplace plans to individuals for two reasons. One, they will face enormous uncertainty about the future of the Marketplace. Two, without the individual mandate, healthy people are more likely to drop their coverage. Those who are still seeking insurance are likely to be sicker and thus more costly to insurers. Because insurers will not know how much more costly, they will either raise prices or pull out of the individual health insurance Marketplaces. This will result in higher prices and fewer options for consumers. Insurers will have to decide as soon as this spring whether to participate in the 2018 Marketplace. 
  • Medicaid expansion, which covers more than 10 million low-income people, will be threatened. States will face major uncertainty as Medicaid’s structure and financing are hotly debated. Even if the federal dollars for Medicaid expansion remain available for two to three years, states may be less likely to invest in outreach, enrollment, and plans to strengthen implementation (for example, improving access to preventive care and mental health services, which are crucial for low-income families). Additionally, states that have not yet taken up the expansion may be discouraged from doing so. 
  • Broader state budgets could be affected, as states begin retrenching in order to have options should the federal government withdraw or shrink funding.
  • Many other aspects of health and mental health care in the United States are closely linked to the ACA. Consequently, services, providers, and sectors beyond what we usually think of as “health insurance” could be significantly affected. For example, will the replacement include the same mandatory benefits to be covered (such as mental health care and maternity care)? Reducing access to mental health care has consequences far beyond the individuals who need care. Among other repercussions, it would place a major burden on jails and prisons and further strain the child welfare system.

In effect, any repeal vote will set a “countdown clock” for federal financing of Medicaid expansion and individual insurance subsidies to be eliminated at a future date. This creates enormous uncertainty for people who cannot afford insurance without subsidies as well as for state budgets. Based on previous proposals put forth by Congressional Republicans, a replacement bill will not provide the level of affordable, adequate coverage provided by the ACA. As such, it’s critically important to advocate against this vote taking place.

If Republican leaders follow through with a vote to repeal the ACA in early 2017, it will set the tone for future debates and votes on the safety net by this Congress. It’s essential to oppose any attempt to repeal the ACA without a replacement; if Congress dismantles the current system before developing an alternative, it will be very challenging to ensure a replacement actually happens and that it provides affordable, adequate coverage. This vote will set the stage for many more safety net debates, including proposals to block grant Medicaid as well as other core benefits.

Congress should focus on making health care more affordable and accessible—not jeopardizing coverage for 30 million Americans. Now is the time to contact your Congressional delegation and voice your concern about repealing the ACA without a replacement. Governors and state insurance commissioners are also key advocacy targets, as the House leadership has sought their advice. If they are already on the record as supporting a repeal of the ACA, tell them it’s only acceptable if it’s paired with a replacement plan. Otherwise, they can’t truly know what they’re trading the ACA in for. There’s simply too much at stake to rush a repeal vote without having a replacement plan.