Editorial: Wizardry needed to remake Obamacare

The Detroit News

President Donald Trump says he will deliver his plan for replacing Obamacare within the next several days. The challenge he faces is coming up with a new health insurance system that keeps the popular portions of the Affordable Care Act while slashing rapidly rising costs.

And one more: He must unite a Republican congressional caucus that has starkly different visions of what the government’s role should be in providing health insurance.

The president has said several times since he was elected that he wants to provide health insurance to everyone. That was the original goal of Obamacare, and the cost burden of doing so has been enormous — federal insurance subsidies reached an estimated $660 billion last year.

That’s just the government’s bill. The cost to Americans who must purchase insurance independently or help cover a share of employee-provided policies has been devastating.

The average annual outlay for a family insurance policy now tops $18,000. Even those who get their coverage through their workplace must cover a substantial amount of the cost, and also pay much higher deductibles and co-pays.

Meanwhile, the competition the ACA was supposed to foster hasn’t played out. Insurers are bailing out of the exchanges, and in many places, there is only one company left.

Obamacare is collapsing and, despite Democratic-backed protest rallies, there is no choice but to make significant changes.

Trump says he wants to guarantee everyone can get insurance, and also has expressed support for continuing coverage for pre-existing conditions and keeping children on parental policies until age 26. He also has said he would end mandates, fees and taxes imposed by Obamacare.

Doing all that will take some genius.

The latest plan from the Republican-controlled House offers some good suggestions, but likely won’t cover the entire cost of what Trump wants to do, and so far is short on financial details.

The GOP would expand the use of Health Savings Accounts to cover the cost of insurance. That would provide relief to families struggling to pay for policies.

Republicans would establish subsidized high risk pools for the sickest Americans, taking some of the burden off the general population. States would receive Medicaid block grants to structure their own programs to cover the uninsured. Some Republicans want these to be capped, which could hurt the Healthy Michigan program. The state has expanded the number of insured in Michigan, but at a cost much higher than anticipated.

No Obamacare replacement will work without addressing the costs of health care. Congress must move to encourage providers to adopt best practices. It also must address tort reform. And it should allow insurers to sell their products across state lines to encourage competition.

Employers should be allowed to build insurance plans to meet the needs of their employees, absent specific federal mandates.

Republicans are divided on whether Obamacare should be restructured or scrapped outright. Killing the ACA altogether is not realistic; the industry spent billions of dollars and five years reworking the system to adapt to Obamacare. The old marketplace is gone; it can’t be restored on a short time frame.

Former House Speaker John Boehner quipped last week that Republicans aren’t likely to repeal and replace the law but rather make some fixes and draw a “more conservative box” around it.

Again, considerable wizardry will be required to keep the good things Obamacare introduced while establishing a vigorous health insurance market that doesn’t bust household or government budgets.