A buzzword surrounding recent health reform efforts is state flexibility. The House-passed American Health Care Act (AHCA), what’s known about the Senate bill, and other major proposals make prominent use of waivers, block grants, and other tools to give states power to address their unique circumstances.

At the same time, concerns have been raised about the coverage losses that would result from the House bill or similar proposals. President Trump and members of his administration have promised legislation that maintains or expands insurance coverage and affordability. Earlier this month, President Trump reportedly criticized the House bill as “mean” and called on the Senate to make its bill more generous.

As Congress struggles to balance the goals of flexibility and adequate health coverage, it’s worth noting that the Affordable Care Act (ACA) already includes a measure that does exactly that. Section 1332 of the ACA allows for “state innovation waivers” that provide broad flexibility for states to redesign their health insurance markets while ensuring that health coverage is not jeopardized.

Section 1332 was the bipartisan brainchild of Senator Ron Wyden (D-OR) and former Senator Bob Bennett (R-UT). The measure allows states to waive or modify many of the central coverage provisions of the ACA, redirecting the current federal subsidies flowing to the state toward implementing the state’s own plan. To protect individuals, a waiver may be approved only if it won’t leave more people uninsured or make coverage less affordable or comprehensive.  A waiver also cannot increase federal deficits.

Section 1332 has received praise from both ends of the ideological spectrum. Last year, former House Speaker Newt Gingrich and former Senate Majority Leader Tom Daschle wrote in the Washington Post that the waivers “can achieve what both sides earnestly wish for: providing more Americans with access to more affordable, flexible, patient-centered health care.” The Trump administration has also been strongly supportive, encouraging states to apply and providing a detailed checklist to help states develop applications.

Action on waivers has been relatively limited to date – largely because they only became available starting in 2017. The only waiver to receive approval so far is Hawaii’s, which frees the state from the requirement to maintain a small business Marketplace (since longstanding state law already achieved the same goal there). Another group of applications, led by Alaska’s, is currently moving through the approval process. These waivers would modify rating rules in the state and draw down federal dollars to help fund a state reinsurance program to both lower premiums and stabilize the insurance market.

These are important measures, and the value of allowing states this kind of flexibility should not be underestimated. But these waiver concepts only scratch the surface of what section 1332 permits.  State innovation waivers can be used to make fundamental changes to the ACA’s coverage measures.  For example, a state can completely waive the ACA health insurance Marketplace and associated financial assistance and use the money to provide coverage under a state-run program. Waivers can also change the rules for which plans can participate in the Marketplace. A state could even waive the individual and employer mandates so long as it finds another way to achieve broad, affordable coverage.

Given the recent effective date and the evolving federal landscape, states need time to explore options for these more comprehensive waivers.  Several states have considered using section 1332 to enact something like single-payer coverage, though cost has been a barrier. Other states like Oklahoma have begun thinking through different kinds of waivers that fundamentally remake the state’s health care system. Overall, eleven states have legislation in place calling for the development of a waiver, and several others are considering it.

As Congress struggles to balance the goals of flexibility and adequate health coverage, it’s worth noting that the Affordable Care Act (ACA) already includes a measure that does exactly that.

Congress could also consider legislation to improve the waiver rules. An important opportunity to add flexibility without jeopardizing coverage is the rules for pass-through funding – money from forgone federal subsidies that would be passed through to states.  Under current law, this funding is capped at the amount of forgone Marketplace subsidies, even if the waiver would create additional federal savings.  For example, a waiver that reforms the health insurance market to reduce premiums would likely save federal dollars by trimming the cost of the tax exclusion for employer-sponsored coverage.  But current law does not allow those savings to be shared with the state.  This limitation makes many potential waiver concepts infeasible and does not serve a clear purpose in protecting coverage or the federal budget.

There’s also more the Trump administration could do. One concrete step would be to provide a template or other streamlined mechanism for receiving certain “standard” waivers.  A good candidate is the Alaska-style reinsurance waiver, since its direct effects are generally limited to reducing premiums, simplifying the question of waiver approval.  States could also benefit from additional clarification about the substantive and procedural rules for waiver approval.

The administration should also ensure that there is adequate staff at HHS and Treasury to help states pursue these waivers. HHS has dozens of staff working on the long-standing section 1115 waiver program, but HHS and Treasury – which share jurisdiction over state innovation waivers – between them have just a few staff positions focused on the section 1332 program. A joint section 1332 office with dedicated staff from each agency could be a good first step.

The desire for flexibility in developing health programs is understandable, even if there is disagreement about how to weigh it against other goals.  Each state has unique circumstances that call for different solutions.  And states can play an important role in testing different policies as laboratories of democracy, improving our understanding of what works.

But believers in flexibility must recognize that flexibility works both ways. Many states that have embraced the ACA have flourished under it, with robust insurance markets and large reductions in the number of people uninsured.  For these states, legislation that removes the ACA’s coverage provisions as an option – like that being considered currently in Congress – is the opposite of flexible.  (The AHCA would also undermine state innovation waivers by greatly diminishing federal health insurance subsidies and thus the potential pass-through payments to states.)

And this highlights the best thing about state innovation waivers.  States that like the way the ACA works can keep it as is.  States that want additional flexibility can receive federal funding to try out something different.

Before rushing to pass sweeping legislation in the name of flexibility, Congress should take a closer look at the flexibility state innovation waivers already provide.

Jason A. Levitis is a Senior Fellow at the Yale Law School’s Solomon Center for Health Law and Policy.  Until January of 2017, he led ACA implementation at the U.S. Treasury Department.  In that capacity, he co-chaired an interagency work group charged with implementing the state innovation waiver program.

The authors did not receive financial support from any firm or person for this article or from any firm or person with a financial or political interest in this article. They are currently not an officer, director, or board member of any organization with an interest in this article.

      

Business models often change quite dramatically over time in the American economy. Think of booksellers; Amazon changed the concept of a bookseller and its book retailing vision led to the radical diversification of its product line.

Some business models are more resistant to change, with firms concentrating on specialization rather than engaging in organizational innovation and diversification. Take the example of hospitals. Within our health system, hospitals carry out a “repair shop” function, and, despite new technologies and advancing professional skills, that function and business model has changed little for over a century.

True, there has been some alteration at the margin. Walk-in clinics and many physician offices now provide some services that used to require a trip to the hospital emergency room or a hospital admission; but that has not done much so to reshape the basic concept of a hospital. It is also true that hospital administrators have become much more businesslike in managing cost and improving quality. But hospitals have altered little in an institutional or functional sense.

Things could change, however. One school of thought sees hospitals radically improving efficiency by becoming highly specialized “focused factories.” Like the placekicker on a football team, the argument goes, hospitals will reduce the range of services they provide and concentrate on providing a small number of services as efficiently as possible, with patients going to different hospitals for different procedures. According to this view, hospitals should cease thinking of themselves as a one-stop shop offering a wide range of services, thus going in the opposite direction of Amazon.

However, another school of thought would encourage hospitals to evolve in a different direction. According to this view, hospitals would become far more involved as “hubs” in communities, orchestrating a wide range of non-medical social services—even such things as housing—that contribute in some way to health.

Hospitals should be “hubs” that emphasize social services over medical repair

There is a good reason to advance this second model and turn hospitals into hubs that provide a range of social services. In America, we have overmedicalized health; we assemble impressive—and very expensive—medical technology to fix people when they are sick or injured. However, we spend proportionately far less than other countries for social services that address so-called determinants of health that contribute to better health and reduce the need for medical care.

We spend proportionately far less than other countries for social services that address so-called determinants of health that contribute to better health and reduce the need for medical care.

If one combines medical spending and social service spending for the advanced industrialized countries, as a proportion of GDP, the United States ranks just a little above the average. But looking at medical care as a percentage of that combination, the US is the outlier. We spend about 64 percent of the combination on medical care, while the average for those countries is 37 percent—and yet our health outcomes for many conditions are often much worse. Countries with more balanced social service and medical spending generally have better health outcomes, and we see a similar pattern among US states. So we would likely see a significant improvement in health if we spent less on hospital care and more on social services to address such things as poor nutrition, stress in low-income households, and unsafe conditions in elderly housing that increase the probability of falls.

Barriers to disruption

Switching funds from medical care to social services and housing, however, is not exactly a welcome idea to the typical chief financial officer of a hospital. It is true that many hospital administrators recognize that the health of their patients would improve if there were more integration of hospital-provided services with social services, such as making sure discharged patients received support services in their community. Most administrators also agree that offering hospital staff to train individuals and community institutions in prevention techniques would improve community health. However, in the manner of “no good deed goes unpunished,” administrators point out that they have no financial incentive to spend hospital money to reduce the need for hospital services and hence reduce revenue. Indeed, their financial incentive is NOT to reduce the demand for hospital care. This is often referred to as a “wrong pockets” problem; a situation in which we would have better outcomes if one institution or sector invested money, but because the primary benefit accrues to another institution or sector there is no incentive to make that investment.

Some hospital systems with a broader social mission—such as some catholic hospitals—do develop partnerships with low-income housing groups and with social service organizations. But this is largely a philanthropic activity. To solve the wrong pockets problem, however, it has to be in the business interest of hospitals to diversify well beyond providing medical services.

How to get hospitals on board with reinvention

Getting such diversification to work financially requires encouragement in the form of both sticks and carrots. For a number of years, hospitals serving Medicare patients have faced a financial stick in the form of readmission penalties. If a hospital treats and discharges a Medicare patient with certain conditions, and the patient is readmitted to any hospital within 30 days with the same diagnosis, the first hospital is essentially fined by Medicare. That has caused many hospitals to explore a variety of ways to arrange community services and even housing to make it less likely the patient will return to hospital.

It is important, however, to look at positive steps to make it economically rational for hospitals to do less repairing and instead provide more non-medical services themselves, or partner with other institutions to improve health. That requires such things as changing the payment rules for Medicare and Medicaid to allow hospitals to be reimbursed for delivering or organizing a wide range of non-medical services that have been demonstrated to improve health, including supportive housing. Private health insurance plans also need to explore ways to reimburse non-medical services that improve health, and reduce medical costs, rather than just reimbursing medical services. If we take serious steps to pay for improved health in this way, rather than paying only for repairing people, we would begin to transform the business model of the American hospital.

      

On Tuesday, May 9, Economic Studies at Brookings hosted an event focusing on the important role of the public, private, and government sectors when it comes to improving the health of local communities. We heard from national and local experts in a dialogue on the topic.

.  For more on this topic see: https://www.brookings.edu/series/building-healthy-neighborhoods/

      

Is it really possible to provide market-based health coverage to all working Americans? Or is some form of public plan the only way to assure affordable coverage, as many liberals insist?

The House replacement for the Affordable Care Act (ACA), or Obamacare, foundered in large part because Republicans could not agree on fundamental design issues for structuring a subsidy for private coverage. The heart of the ill-fated plan was a refundable tax credit for the purchase of private health insurance; making the credit “refundable” meant money would be available to the nearly half of American households who pay no federal income tax. Essentially the credit was a voucher for private coverage.

Refundability set off alarm bells for many conservatives, however, especially members of the Freedom Caucus. Their primary concern was that a universal subsidy meant Republicans would be endorsing a huge new entitlement in the budget. With spending on entitlements having grown to 60 percent of total federal spending, they were not about to add another potentially uncontrollable spending program, especially as health spending (for the elderly and the poor) is already the largest driver of entitlement spending.

Yet if these conservatives insist that subsidies to non-taxpayers to buy private insurance are off the table, it is hard to see how private coverage could ever be affordable to millions of lower-paid families. Without that tool to help pay for private insurance, the pressure for a public program to cover families eventually will likely become unstoppable.

In theory, there are direct ways to limit total spending on such a subsidy system, although they have significant drawbacks.

One way would be to cap total spending and ration the number of individuals eligible to receive subsidies at any one time. That means many families would not receive any support to buy a health plan and thus likely could not afford adequate private coverage. We currently limit rent subsidies for housing in this way, meaning many low-income families end up on waiting lists. Creating a waiting list for affordable market-based healthcare coverage, however, would sharply increase the political attractiveness of a public plan.

Another way would be to try to reduce the per-family cost of subsidies. With this in mind, Freedom Caucus members, and others, argue for paring back or even eliminating the ACA’s “essential benefits package” – the federally required categories of medical services that health plans must provide. It is true that reducing what insurance covers will reduce the cost of coverage. However, it is unlikely that reducing benefits would make a big dent in premiums unless private sector plans could either cut back some very basic benefits, such as hospitalization or prescription drugs, or sharply increase the out-of-pocket costs to enrollees, thereby hollowing out their insurance. And for Freedom Caucus members this still leaves in place an entitlement, just a skinnier one.

Supporters of using subsidies to enable families to afford private insurance – including myself – would be much wiser to focus on designing subsidies that target money most effectively and economically to make private coverage affordable.

Many Republicans are attracted to the idea of providing a general tax deduction for coverage. But this fails a key efficiency design goal: the biggest benefits go to those who do not need help to pay for premiums and out-of-pocket costs while nothing goes to families that are paying little or no federal tax. A tax credit is much better as a tool because it can be crafted to provide greater assistance to those who struggle most to buy coverage. Yet unless it is refundable it, too, fails to make private coverage affordable for all.

For a refundable credit to be most efficient, and thus potentially least costly to the Treasury and general taxpayers, it has to make private coverage feasible for individuals and families facing high insurance costs and/or have the lowest incomes. A flat credit – that is, a fixed amount or a fixed percentage of costs that is available to all individuals – does not meet that efficiency goal. While a fixed subsidy has been popular in some Republican circles, the House Republican leadership bill adopted instead a refundable credit that was adjusted in two ways. The first was by age, which reflected the typically higher cost of coverage for older, generally sicker individuals (though the adjustment was not enough to compensate for the wider age-related premiums permitted in the bill). The second was by income, with the full annual maximum of $4,000 for a 60 year-old, but declining by 10 percent of each dollar of income above $75,000 for an individual.

In this way, the House Republican leaders actually began to go down a very similar design road to the one traveled by the Obama Administration: the ACA contains an income-related premium credit and a special out-of-pocket subsidy for those with modest incomes facing unusually high deductibles and copayments. So, despite the political grandstanding, both House Republicans and Obama’s Democrats concluded that for Americans to have access to affordable market-based private insurance, there has to be a subsidy that is available to non-taxpayers as well as taxpayers, that reflects local costs, and that provides most help for low-income households.

There is no getting away from these design principles if you prefer private insurance to a government plan. It should be no surprise, then, that Republicans in both houses came to exactly the same conclusion when, in 1993, they constructed a market-based alternative to the Clinton health plan – the last time the GOP in both houses took the steps needed to design a comprehensive legislative health reform proposal. The initial Republican legislation in 1993 used a sophisticated refundable credit based on a household’s total costs (premiums, out-of-pocket, and contributions to a health savings account (HSA)), as a percentage of its income – the higher the proportion, the higher the value of the credit. Moreover, this credit structure replaced the tax-free treatment of employer-sponsored coverage, and so applied a consistent subsidy principle to all sources of private coverage.

The good news in this for Republicans is that there are subsidy tools available to them to make private health insurance affordable for all working Americans. But to do that, and successfully withstand the long-term pressure to expand public coverage, they will have to get serious about design choices and commit to adequate support for working Americans.

      

They say you can’t judge a book by its cover. Increasingly in the United States, you also can’t judge a library’s value to its community by simply its books. Let us explain.

In a previous blog post, we’ve noted the importance of “third places” in strengthening communities – meaning those places that are neither one’s home (first place) nor workspace (second place). A range of such third places, from churches to beauty salons, play an important role in community building. They are the informal spaces that are often mainstays in a neighborhood, places where both random and intentional in-person relationships are made.

Several things are necessary for a particular place to play this role. Location and accessibility are important, of course. But so are trust and a sense of neutrality; they are usually the keys to success, whether the place is a house of worship, a family-owned diner, or a barbershop.

As the earlier piece explained, public spaces and buildings can become important and successful third places. And one particularly interesting, emerging and important example is the public library.

Public libraries exist in urban, suburban, and rural neighborhoods, and typically they have a long history in their community. According to a 2015 Pew survey, almost two-thirds of adult Americans say that closing their local library would have a major impact on their community. As Pew found, over 90 percent of adults think of public libraries as “welcoming and friendly places,” and about half have visited or otherwise used a public library in the last 12 months.

Reimagining the Librarian

A reason public libraries are seen as such important third-place institutions is that they and their librarians have gradually taken on other functions well beyond lending out books. In many communities, librarians are also ad hoc social workers and navigators. They help local people figure out the complexities of life, from navigating the health system to helping those with housing needs. This “go-to” role has influenced library programming and events, with libraries providing advice and connections to health, housing, literacy, and other areas.

Other sectors, such as health care, increasingly see public libraries as a critical link to a community. For instance, the National Library of Medicine is helping local librarians to be more effective local navigators by regularly hosting webinars and training sessions for local librarians on how to navigate social services, aging, mental health, welfare and public assistance, housing resources, health care, and education and employment resources.

A reason public libraries are seen as such important third-place institutions is that they and their librarians have gradually taken on other functions well beyond lending out books.

Of course, most librarians were not trained to handle many of the issues and requests they now encounter, such as providing guidance on resources for substance abuse and mental health issues. In response, some libraries have hired in-house social workers to help address the needs of visitors. San Francisco Public Library, where an estimated 15 percent of the library’s visitors are homeless, was one of the first. A case worker is able to do a full assessment, and help arrange case management and housing assistance, in a respectful and neutral safe space.

Addressing Population Health

Other cities have followed suit. A recent study from researchers at the University of Pennsylvania explains how Philadelphia’s libraries, as a trusted local institution, have partnered with the University to address population health and social determinants of health. With librarians now trained as “community health specialists,” the libraries offer programs and assistance for people of all ages and socio-economic backgrounds. In 2015, almost 10 percent of the libraries’ 5.8 million in-person visitors accessed specialized programs and assistance in such areas as nutrition, trauma and mental health resources, youth leadership and healthy behaviors. As the researchers conclude, “Libraries and librarians contribute two particular strengths to advance a culture of health: accessibility and trustworthiness.”

Many libraries have become front-line institutions in addressing the needs of the homeless. For instance, the Dallas Public Library in 2013 launched a Homeless Engagement Initiative. The emphasis is on making all library visitors feel welcome. The library runs a Homeless Engagement and Leadership Program (HELP) Desk where customers can obtain one-on-one assistance with job applications and resumes, food and housing referrals, legal aid, and library music and arts programs.

Libraries focus on a wide range of populations with particular needs, including seniors, veterans, and immigrants. The Hartford Public Library in Connecticut, for instance, has created The American Place (TAP), a free program that supports and assists new immigrants acclimate to their new city. TAP partners with community leaders and organizations to provide employment services, English as a new language classes, legal orientation programs, Know-Your-Rights forums, and referrals to other services, in five different languages. Meanwhile the Queens Borough Public Library in New York, has partnered with the Queens Health Network, the largest healthcare provider in the area, to design health-related and community-centered programming targeting the needs of its immigrant populations.

Libraries as Key Hubs

In health care and other areas, libraries are combining the access and trust characteristics of a third place with a hub role in the community – using partnerships with other institutions to connect people with services and help. There are plenty of challenges with this role. Community needs and the requests of visitors are increasingly straining or overwhelming library funds; and although many libraries are retraining staff, achieving the appropriate mix of skills is difficult. But as the University of Pennsylvania study found, “public libraries are dynamic, socially responsive institutions, a nexus of diversity, and a lifeline for the most vulnerable among us.” More policymakers and government officials need to recognize this, and incorporate libraries into budgets and plans to build a culture of health and upwardly mobile communities.

      

Recently, President Trump correctly described health care policy making as “unbelievably complex”—although his comment that “nobody knew that” must have been a surprise to the many analysts and lawmakers who for decades have worked on health care reform.

Health care policy making is technically complex, of course. But it is also complex in that the president and Republicans seeking to replace the Affordable Care Act (ACA) face very difficult political and philosophical choices. It was evident from the internal backlash to the recent Republican House committee bills that there is a deep divide among Republicans on these choices.

Consider 3 such tough issues: deciding what coverage means, making hard choices about subsidies, and determining how to cover people with chronic illnesses.

What Does “Coverage” Mean?

A key metric in the ACA replace debate has been the number of people who are “insured” or “covered.” The true purpose of insurance is to protect people from ruinous costs, such as from a terrible accident or a chronic condition. However, most people in the United States think health insurance should also cover routine costs.

Therefore, an ACA exchange plan that costs hundreds of dollars in monthly premiums and has a deductible of perhaps several thousand dollars, may technically be good insurance, but many people think it is not meaningful “coverage” because it leaves them exposed to possibly hefty routine costs. Indeed, polling has shown people in the United States generally view the ACA favorably or unfavorably depending on whether their own premium and out-of-pocket costs have been rising—even if they are not actually in an ACA plan.

Trump responded to this public perception by pledging better coverage with cheaper premiums and lower deductibles for everyone. So Republicans are now struggling to find ways of accomplishing that promise.

One popular Republican proposal is to reduce insurance costs by paring back the “essential health benefits” that ACA exchange plans must provide—so people don’t have to pay for benefits they supposedly do not want. However, the ACA’s required benefits mostly cover what Americans consider basic insurance, such as hospital stays and prescription drugs, so there is little room for paring back. Meanwhile, eliminating more controversial benefits, such as birth control, would have little impact on insurance costs.

Another popular idea is permitting families to buy inexpensive insurance from anywhere in the country. That sounds like an easy cost-cutting measure, but it’s not. Insurance today is typically tied to local networks of physicians and hospitals; thus, an out-of-state plan might be cheaper but essentially inaccessible. Most likely, with reduced regulation, we would see cheap cash indemnity plans aimed at healthy individuals. However, if large numbers of healthy people in a state did buy such out-of-state plans, that would undermine the state’s insurance pool and push up the average cost for remaining enrollees.

Designing Subsidies

Both the supporters and the critics of the ACA accept that some level of subsidy is needed for many families to afford coverage. Here again, Republicans seeking to replace the ACA face some hard choices in how they would construct such subsidies.

Bringing down the general cost of coverage would require a large infusion of new money or retaining some ACA taxes. Without that, many people will have a hollow choice between unaffordable plans. However, the House bills triggered angry resistance from fiscal conservatives opposed to keeping even some ACA taxes.

Even putting that problem aside still leaves hard design choices. Many Republicans favor a broad tax deduction for health coverage. But a deduction is of no value to the nearly half of US individuals who pay no federal income tax, and the greatest benefit goes to higher-income households who least need a subsidy. For that reason, the House Republican leadership opted for an income-related tax credit that is “refundable”—meaning available to households that pay no income tax. Yet even if the proposed refundable income-related credit were reconfigured to be made adequate, many conservatives balk at the idea of refundability, arguing that it would be a new cash entitlement.

An existential problem for Republicans remains, however. If they refuse to subsidize millions of modest- and lower-income individuals to buy private insurance, the only way to honor the President’s pledge would be to provide public coverage.

How Should We Cover Sicker Individuals?

A commitment to adequate and affordable coverage for all also means deciding how to address people who develop chronic illness, especially when young, and then try to buy insurance. In a less-regulated market, these individuals are literally uninsurable at a price that even comparatively well-off people can afford—but somehow, their treatment must be paid for.

There are only 2 broad options to deal with this group. One way, adopted in the ACA, is to spread their high costs across the entire insured population by requiring plans to cover all risks and limiting the range of premiums and deductibles insurers can charge. The problem with this approach is that premiums for younger, healthier individuals then become “artificially” high, making their purchase of coverage less economically attractive unless they receive generous subsidies. If these healthy people leave the insurance pool, such as by forgoing insurance, that raises the average cost of insuring those remaining in the pool.

The unpopular individual mandate penalty is meant to discourage this pattern (the House legislation explicitly repeals the mandate—but then adds back a penalty on people who wait to buy coverage until they are sick). Opting out is a particular problem in the ACA exchanges because healthier people can still obtain coverage in the less-regulated nonexchange individual market, making the exchange insurance pool more costly (a partial solution to this would be to merge the individual market with the exchange market, as has been done in Vermont and the District of Columbia).

The other way to cover people with high health care costs, embraced by the House legislation, is to fund states and hospitals to provide these individuals with extra services or place them in a separate subsidized insurance risk pool so their premiums are affordable. Subsidizing high-cost individuals in this separate way allows regular premiums to be lower for healthier individuals—making a mandate for coverage less necessary. Conservative analysts argue that carefully designed risk pools are an effective alternative to controlling premiums to cover expensive individuals, and can cover people “invisibly” and at reasonable cost. Some liberal analysts counter that the government cost would be too high for most Republicans to accept. But the bottom line is that a high-risk pool approach can only work if it is adequately funded.

These are just 3 of the many difficult issues Republicans have to deal with in designing an alternative to the ACA that adheres to Trump’s commitment to provide better and less expensive coverage. As my colleagues and I have pointed out, there are certainly ways to craft an alternative to the ACA that might appeal to many—though not all—Republicans. But that task is indeed complex, and requires a constructive consensus among Republicans that is currently lacking and may be unattainable.

      

THE ISSUE: If Congress rejects the new House Republican-backed replacement for the Affordable Care Act (ACA), the full repeal long advocated for by many Republicans could be their next option.

A straight ACA repeal would leave an estimated 20+ million people without health coverage.

THE THINGS YOU NEED TO KNOW

• Republicans have long advocated for repealing the ACA and if their new replacement isn’t approved, that plan could soon be put into motion.
• The ACA provides coverage, and subsidies towards coverage, to people who previously couldn’t get health insurance through the individual market.
• A straight ACA repeal would leave an estimated 20+ million people without health coverage.
• If the ACA is repealed, many lower-income Americans (earning a maximum family income of about $33,000) participating in Medicaid, which was expanded under the ACA, would lose health coverage.
• Many individuals with pre-existing medical conditions, previously unable to get health insurance, would also lose coverage.
• The ACA also benefits health insurance industry by stabilizing coverage, and provides assurance to state hospitals that patients have coverage of some kind.
• It is incumbent upon Republicans to provide a clear plan and implement it quickly in order to stabilize the markets and assure Americans that whatever replaces the ACA will be at least as good and at least as affordable as their current plans.
• Polling on repeal shows that people are unhappy with the ACA, but not with their coverage. They most frequently criticizes the cost and the availability of coverage.
• Republicans are faced with a challenge: Americans don’t just want repeal, they want a replacement that is comprehensive and affordable.

THE SOURCES

Replacing Obamacare needs to be done incrementally

Moving to the next phase of health care reform

America desperately needs a long-term budget for entitlements

Repeal and replace Obamacare: what could it mean?

      

THE ISSUE: As Congress considers the new House Republican-backed replacement for the Affordable Care Act (ACA), they must ensure that it accomplishes a set of specific goals that are crucial for providing broad, affordable coverage to U.S. citizens.

The ability to evolve has to be a key part of the ACA replacement.

THE THINGS YOU NEED TO KNOW

• People who were uninsurable prior to the ACA need to receive coverage under a new plan.
• Coverage needs to be affordable so that people can visit a doctor without feeling that they will be unable to pay the deductibles or copayments.
• There has to be a system of subsidies so that people with a variety of medical histories and incomes can afford coverage.
• The market must be stable; insurers need to see that there is an opportunity to make an adequate return by covering a diverse set of people under the new plan.
• Providing health care is very expensive, a new plan must allocate enough expenditure.
• It will be difficult to form an effective replacement plan if spending is reduced or if taxes like those under the ACA are eliminated but not replaced with another source of revenue.
• A replacement plan must be able to adapt to constantly changing conditions in the insurance market.
• States should have considerable opportunities for experimentation in how they organize insurance and how they distribute subsidies to citizens.

THE SOURCES

Moving to the next phase of health care reform

Why repealing the ACA before replacing it won’t work, and what might