Will Obamacare collapse, or will feds put it on life support?

SAN ANTONIO, Texas — Health policy experts disagree whether significant free-market reforms can supplant Obamacare despite the program’s rocky decline.

During a panel discussion Monday at the State Policy Network annual convention, they agreed congressional Republicans are unlikely to honor seven years of promises to repeal and replace the Affordable Care Act. States like North Carolina also will face incredible pressure to expand Medicaid under the costly national health insurance law.

Health care reformer Avik Roy, president of the Foundation for Research on Equal Opportunity, and opinion editor at Forbes predicted over the next four years, states that refused to expand Medicaid are likely to reverse course.

“Those hospital lobbyists, those left-wing activists, they’re all going to be up in arms again about expanding Medicaid,” Roy said.

“Left-wing propagandists” use misleading information to argue Medicaid health care outcomes have improved under Obamacare, Roy said. The false narrative began under the Obama administration.

Roy also criticized the Congressional Budget Office, which says 16 million people would lose coverage under Obamacare repeal.

The CBO estimate that 5 million people would drop out of Medicaid is “crazy,” he said, because recipients who pay no premiums will not surrender their health-insurance coverage. The CBO projects 6 million people now in the health care exchanges would drop out of the market. “No insurer believes that is the case,” he said. One million is a more likely estimate.

Flawed estimates trumpeted by progressives and amplified by the media have shifted political momentum against repeal, Roy said.

Without ending the Obamacare individual mandate, which requires people to purchase insurance or pay fines, few market-based alternatives are available at the state level, Roy argues.

He thinks Congress will bail out Obamacare despite its shortcomings.

Rea Hederman, executive vice president and chief operating officer of The Buckeye Institute in Ohio, agrees with much of Roy’s gloomy scenario for a nationwide free-market solution.

“The cavalry is not coming from [Washington] D.C.,” House Speaker Paul Ryan, R-Wisconsin, or Senate Majority Leader Mitch McConnell, R-Kentucky, Hederman said.

But he thinks the Trump administration would allow bold, innovative state fixes. Some states are stepping up to the plate with state innovation waivers under Section 1332 of the Obamacare law.

More than 21 states have applied for 1332 waivers or are considering them.

Hederman thinks states could use 1332 waivers to request limits on the health benefits mandated by Obamacare, impose Medicaid work requirements, or replace the various gold, silver, and bronze plan coverage levels with something else.

Waivers could lower costs for long-term care, one of the fastest-growing and most expensive parts of Medicaid, for example, by expanding in-home care options instead of relying on more expensive nursing home placements.

Roy countered that any aggressive action to curtail Obamacare mandates would spur lawsuits. The law bars any changes that cut coverage or the number of people served. Hederman said states must push the envelope or lose the fight.

Hederman contends Obamacare has collapsed. Some states once had 50 providers offering Affordable Care Act coverage and now have one. In many counties only one provider offers coverage. Although premium costs are skyrocketing, taxpayers pick up the difference through increased subsidies.

Roy disagrees.

“Businesses collapse. Government programs do not collapse,” Roy said. Fannie Mae and Freddie Mac failed terribly, yet the federal home mortgage companies were bailed out and expanded. He predicts the same thing would happen with Obamacare, citing current bipartisan efforts to increase spending on the failing program.

Dr. Deane Waldman, a cardiologist and member of the New Mexico Health Insurance Exchange, said while conservatives talk about costs and insurance, they fail to frame the debate in a more salient way: Obamacare has expanded insurance coverage, but the people now covered may not get treated.

Enticed by $3 billion in new funding, New Mexico expanded its Medicaid program. The share of the state population on the program went from 25 percent to 41 percent, Waldman said.

But burdensome Obamacare mandates left the state with $417 million in unfunded costs. To bridge the deficit, he said, the state cut Medicaid reimbursements to doctors. Many doctors then stopped treating Medicaid patients.