President-elect Trump said that he was open to keeping parts of Obamacare. The Wall Street Journal reports, “Mr. Trump said he favors keeping the prohibition against insurers denying coverage because of patients’ existing conditions, and a provision that allows parents to provide years of additional coverage for children on their insurance policies.”
He’s not the first Republican to advocate keeping these popular provisions of the law. Keeping the under-26 provision is pretty close to a consensus among Hill Republicans. It’s not the ideal policy, in my view. But it’s compatible with a much freer and better-functioning health-care market than we have now, and it’s worth accepting as part of legislation that enables that market.
Obamacare’s pre-existing conditions provision is another story. It makes it much, much harder to get rid of the individual mandate, which is one of the law’s least popular provisions. If insurers have to cover people who are sick on the same terms as people who are healthy, then people can forego buying health insurance while they’re healthy secure in the knowledge they can buy it when they get sick. Insurance markets can’t work that way: With only sick people paying premiums, those premiums will have to rise, and healthy people will have even less incentive to get covered. That’s basically why the individual mandate is in Obamacare even though President Obama campaigned against it in the 2008 Democratic primaries.
But you don’t have to get rid of protections for people with pre-existing conditions altogether to scrap Obamacare. You do have to modify them. Over the last few years, congressional Republicans have increasingly advocated replacing Obamacare’s regulation with a less restrictive one. Under the new regulation, insurers would have to cover people with pre-existing conditions on the same terms as everyone else so long as they had maintained insurance coverage beforehand. That way there would be no incentive to game the system. In fact there would be an incentive to get covered, with no need for an individual mandate.
Many Republicans plans would give tax credits for people who don’t have employer-provided coverage, so that they could buy policies that at least cover catastrophic medical expenses. Healthy people would thus have both the incentive and the means to get coverage, and that coverage would remain if they got sick.
If Trump delivers such legislation, he could perfectly fairly say that the new law protects people with pre-existing conditions. In short: Obamacare opponents should not get too alarmed by Trump’s remarks, so long as Republicans on the Hill and in the coming administration are clear about how to put that protection into operation—and how not to.
Update: I wrote more on this subject a while ago, in an article that may help with some of the questions this post has elicited.