The Three Big Reasons the GOP Can’t Replace Obamacare


By Robert Reich /

Republicans are preparing to repeal the Affordable Care Act, and have promised
to replace it with something that doesn’t leave more than 20 million Americans
stranded without health insurance.

But they still haven’t come up with a replacement. “We haven’t coalesced
around a solution for six years,” Republican Senator Tom Cotton admitted last week.  “Kicking the can down the road for a year or two years isn’t going to
make it any easier to solve.“ 

They won’t solve it. They can’t and won’t replace Obamacare, for three big reasons.  

First, Republicans say they want their replacement to be “market-based.” But Obamacare is
already market based – relying on private, for profit health insurers.

That’s already a problem. The biggest health insurers – Anthem, Aetna, Humana, Cigna, and United
Health – are so big they can get
the deals they want from the government by threatening to drop out of any insurance system Republicans come up with. Several have already dropped out of Obamacare.

Even now they’re
trying to merge into far bigger behemoths that will be able to extort
even better terms from the Republicans.               

Second, every part of Obamacare depends on every other part. Trump says he’d
like to continue to bar insurers from denying coverage to individuals
with preexisting conditions.

But this popular provision depends on
healthy people being required to pay into the insurance pool, a mandate
that Republicans vow to eliminate.

The GOP also wants to keep overall costs down, but they haven’t indicated how. More than 80 percent of Americans who buy health insurance through Obamacare receive federal subsidies. Yet Republicans have no plan for raising the necessary sums.

Which gets us to the third big reason Republicans can’t come up with a replacement. Revoking the tax
increases in Obamacare – a key part of the repeal – would make it impossible to finance
these subsidies.

The two biggest of
these taxes  – a 3.8-percentage-point surtax on dividends, interest and
other unearned income; and a 0.9-percentage-point increase in the
payroll tax that helps fund Medicare – are also the most progressive. They apply only to people earning more than $200,000 per year.

Immediately repealing these taxes, as the GOP says it intends to do, will put an average of $33,000 in the hands of the richest 1 percent this year alone, and a whopping $197,000 into the hands of the top 0.1 percent,
according to the Tax Policy Center.

It would also increase the taxes of families earning between $10,000 and $75,000 – including just about all of Trump’s working class voters.

Worse yet, eliminating the payroll tax increase immediately pushes Medicare’s
hospital fund back toward the insolvency that was looming before
Obamacare became law.

Ultimately, the only practical answer to these three dilemmas is Medicare for all – a
single payer system. But Republicans would never go for it.

So without Obamacare, Republicans are left with nothing. Zilch. Nada.

Except the prospect of more than 20 million people losing their health insurance, and a huge redistribution from the working class to the very rich.

Robert Reich
Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the…
Robert Reich

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