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Congress takes the sting out of ObamaCare

Congress is steadily taking the sting out of ObamaCare, removing the most unpopular parts of the law while leaving the most popular elements in place.

Lawmakers in the last two months have repealed the law's insurance mandate and delayed a slew of controversial taxes, including the Cadillac tax on high-cost health plans, which is reviled by unions and businesses alike. 

But other central provisions of the law, including subsidies to help people buy coverage, the expansion of Medicaid and protections for people with pre-existing conditions, remain in place. And those parts appear likely to stick around for the foreseeable future, given that the GOP repeal push is on hold indefinitely.

Former staffers who helped write the Affordable Care Act (ACA) are optimistic that the law can still function without the mandate and the taxes, even if they would have preferred for those policies to stay in place. 

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Some argued the removal of some of the most unpopular parts of the law actually strengthens the political standing of ObamaCare, making it harder to repeal. 

“The ACA is like an overachieving child with parents who got divorced that’s still on track to go to a good college,” said Bob Kocher, a former Obama White House health-care staffer who helped write the ACA.

The law’s subsidies, he said, are both hard to touch and key to the system. 

“No politician wants to take subsidies away, and it’s the subsidies that enable the insurance expansion,” Kocher said.

And despite the repeal push in Congress, enrollment in ObamaCare was only down slightly for 2018. That surprised experts who predicted that the Trump administration’s handling of the law would discourage people from signing up.  

“I think a year ago no one would have predicted that the marketplaces would be as strong as they are today,” said Jeanne Lambrew, a longtime Obama health-care adviser who worked on passing the law, though she warned of future actions the Trump administration could take.

ObamaCare is increasingly dependent on its federal subsidies, which make it easier for people with low incomes to get affordable coverage. People who earn too much to qualify for the aid increasingly face high premium costs.

“The ACA is just a shrunken version of what it could be,” said Jonathan Gruber, an MIT health economist whose work helped shape the law. “It’s shrunk to a public entitlement program, and that’s, you know, unfortunate.” 

He said people who qualify for the subsidies can find affordable coverage, but the growth of the law is limited because people who do not qualify face costs that “can be exorbitantly expensive.”

The size of the ObamaCare marketplaces, around 10 million people, is less than half of the roughly 25 million people that the Congressional Budget Office once projected would be enrolled by this point. The gap is partly due to fewer employers dropping coverage than was expected.

Congress’s decision to repeal the mandate that people have insurance will likely result in larger premium increases for people who don’t qualify for subsidies, potentially depressing enrollment further.

Still, the law has contributed to a steep drop in the uninsured rate. The National Health Interview Survey found that 16 million people have gained coverage since the law went into full effect in 2014.

The repeal fight last year showed that cutting off funding in ObamaCare that helps people get coverage tends to be unsuccessful, said Tom Miller, a health-care expert at the right-leaning American Enterprise Institute. 

The parts of the law that have been rolled back, like the mandate and the taxes, are seen as impositions, in contrast to the spending on coverage.

“The lesson of last year is when it comes to actually spending less money, no, no we're stopping at that,” Miller said. 

“As long as the funding streams remain there, which they do, there’s certainly an irreducible minimum [of people enrolled],” he added.

The delay of the Cadillac tax, while not at the core of the ACA, is particularly irritating for architects of the law. They included the tax in an effort to control health-care costs, hoping it would incentivize employers and insurers to lower costs and avoid having to pay the tax. 

But unions and businesses decried the tax, and members of both parties have responded by delaying its implementation.

“It’s really disappointing to see both parties I think really not understand the policy and respond to really simplistic rhetoric,” said Kocher, a supporter of the tax.

Lambrew noted more generally that all of the ACA taxes were put in place to fund the law and help prevent it from adding to the deficit.

“The taxes were there because we wanted to make sure this was sustainable in the long run,” she said.

With the taxes chipped away and the mandate gone, though, the law becomes somewhat more palatable for many in the GOP, even if they would prefer repeal.

Republicans are now considering steps to stabilize ObamaCare markets and stop premium hikes by funding what is known as reinsurance, though conservative lawmakers generally object to that idea.

“Even though Republicans have this burning desire to get rid of it, they understand elections matter, and they are now in a position where they have to stabilize the market so they can argue, ‘Hey, we're reducing premiums,’ ” said Chris Condeluci, a former Senate Republican health-care staffer.

Condeluci, who worked for the Senate Finance Committee at the time of negotiations over the ACA in 2009, said he thought some Republicans might have voted for the law if the mandate hadn’t been included. 

Lambrew said it makes sense for Republicans to take ownership of the law now that they control the government — especially given the push on the left for a new single-payer system. 

While they might not like ObamaCare, she said, “they really don’t like the alternative.”