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Can Liberal States Do Anything to Fight the Coming Obamacare Repeal?

Once the Republican Congress gets rid of Obamacare, expect a "lot of lawsuits," says one healthcare expert.
Photo by Joe Raedle/Getty Images

The election of Donald Trump to go along with a Republican-controlled Congress means that all of a sudden, the long-held conservative dream of repealing the Affordable Care Act, a.k.a. Obamacare, is about to come true. But what happens after that repeal is far from clear. Though Republicans and right-wing think tanks have some ideas about what they would replace Obamacare with, GOP officials haven't hammered out specifics yet. Their current strategy seems to be to repeal Obamacare, but delay putting the repeal into effect in order to give themselves time to craft an alternative.


They have to tread carefully, because simply erasing the ACA would not only leave an estimated 20 million people without health insurance, but potentially cost the country 3 million jobs by 2021, according to a recent study by the Commonwealth Fund. It's also a move that 75 percent of Americans disprove of—even some Trump supporters don't want to see Obamacare end.

But just as some Republican-controlled states have fought Obamacare tooth and nail for years—refusing the Medicaid expansion it offered, and taking the federal government to court—liberal states may make moves toprotect their local economies and residents should the ACA be repealed. To find out how that battle might be conducted, I spoke with Jill Horwitz, a health policy expert and law professor at UCLA. Horwitz shed some light on why there have been so many challenges with Obamacare, and what state legislatures can legally do should Congress pull the plug on federal funding.

VICE: Let's start with the basics: What is the Affordable Care Act doing well and how does it fall short?
Jill Horwitz: The pros of the ACA are that it covered many millions of people who didn't have insurance and it made it reasonably affordable to many of them. It stopped the ability of insurers to drop you in your time of biggest healthcare need, and it seemed to be going some way to controlling costs.

The downside is that it didn't reach everybody that it was meant to reach. Many of the plans on the state exchanges [created by the ACA] were still very expensive for some families, so they couldn't afford to get their insurance on those exchanges. And it hadn't done all the work that it needed to do for changing the way that medical care was delivered in the country. But it was on the way to doing that—I think we saw all kinds of signs that it was working and that it needed reform, not elimination.


So what will happen if it gets repealed?
If a repeal goes through it could mean over 20 million people are going to lose their health insurance. Not only that, those of us who get their health insurance from our employers are going to find that insurance companies reinstitute annual caps on spending just at the very point where we most need help. There's going to be enormous dislocation in the medical industry, because patients need to be insured for hospitals to survive—and health care is 17 percent of the GDP. You play with it this irresponsibly there are going to be bad effects.

When Obamacare was passed, states were given the ability to expand Medicare if they wanted, as well as set up their own state-specific marketplace where people could purchase health insurance. Why was it important to allow states to do that?
There were legal reasons, but I think it was more of a political calculation. In our contemporary political order, federal plans are "bad" and state plans are "good," so this was a way to let states do what states wanted to do under some constraints and with the federal government footing a lot of the bill.

What would happen to the states that elected to expand Medicaid if Obamacare were repealed?
First of all, Congress can't fully repeal Obamacare tomorrow, but they can pull the plug on a lot of the funding for it. What does that mean? That states couldn't afford to pay the bills on Medicaid. If [Congress] follows through with this with no replacement, then all those expansions, all those people who were able to get health insurance because of the Affordable Care Act and the expansions through Medicaid, won't be able to get it anymore. They will not have health insurance.


Considering that states like California might see some significant economic losses should Obamacare be repealed, what can states do to push back? Can they delay any changes with lawsuits?
Yes, you bet there are going to be a lot of lawsuits. One thing that is very clear is that even states that are as big and economically powerful as California cannot keep Medicaid and the exchanges running the way they are today without the federal subsidies. It's just too much money.

First we have to know exactly what [Congress is] going to do—it's very hard to plan a lawsuit when you don't know what you'll be challenging. There's been little detail. We hear things for example about the federal government giving block grants to states to have high-risk pools—things we've seen not work before. If they do that, the states may well sue and say, "Well, you had an obligation, we relied on you when we set this whole thing up, and this is a bit of a bait-and-switch."

When he was campaigning, President-elect Trump said that he would make sure that everyone was covered, but no one knows how he plans to do that. One of the things he's said is that we're going to let insurers compete across state lines, but there are places where insurers are allowed to compete across state lines and there are no cost savings there. And even if on the most generous estimates of how much there would be in cost savings, you're many orders of magnitude away from getting the savings that would be required to cover the uninsured in America.

Do you think states could try to create their own "universal" statewide health insurance plans, like Colorado tried to do recently?
You know they might try to do it but again, the power to tax is at the federal level for the most part, not at the state. So you need resources redistributed from the feds to the states. California state income taxes and New York City income taxes are already pretty high, right? So raising state income taxes doesn't seem like a viable solution. It's really hard to see what good is going to come out of this.

This interview has been edited for length and clarity.

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