On March 24, President Trump and congressional Republicans pulled their proposed American Health Care Act before it could come up for a House vote, realizing it was dead on arrival. They had failed in their self-proclaimed mission to “repeal and replace” the Affordable Care Act (ACA), a.k.a. Obamacare. Many Republicans have been angling to get rid of the law ever since it was enacted in 2010.

The ACA remains in place for now, but many on both sides of the aisle feel it’s far from perfect. And the day after the cancelled vote, Trump tweeted that Obamacare would “explode.” What can American consumers expect going forward?

Robert Field, a Wharton lecturer and professor of law and health management at Drexel University, doubts Republicans will try to repeal Obamacare again anytime soon. If they try and fail within the next year and a half before the 2018 midterm elections, he says, that would give them “a second black eye” that could hurt them in the polls.

Field notes that Obamacare turned out to be more popular than anyone thought, and that part of the reason the Republican bill failed is that moderate House Republicans were “feeling a lot of pressure” to either vote against it or make sure it had adequate coverage provisions. “Which it did not,” he adds.

“Right now the Trump administration is in the position of having to defend [a] lawsuit against the House Republicans, so it’s very hard to see how this is going to resolve itself.” –Katherine Hempstead

He also references the grassroots anti-repeal campaign and “a tremendous amount of pushback” from citizens at town hall meetings. Moreover, polling “showed [the ACA] entering positive territory for the first time since I can remember.”

ACA in Limbo

Repealing the legislation isn’t the only way to get rid of it, says Field. There are many administrative and budgetary resources at the Trump administration’s disposal should they be determined to run Obamacare into the ground. Many experts agree, including Mark Pauly and Daniel Polsky, both Wharton professors of health care management, and Katherine Hempstead, a senior advisor at the Robert Wood Johnson Foundation.

In Hempstead’s opinion, the most destructive blow that could be dealt to the ACA involves the battle over cost-sharing reduction payments to insurance companies. Polsky also considers this matter one of the main make-or-break factors.

Hempstead explains that cost-sharing reduction payments are monies that insurance companies expected to receive to offset the cost of covering low-income consumers: people under 250% of the federal poverty level, “which is actually not an insignificant part of the market,” she notes. The idea behind it was “a recognition that … even the co-pays [were] really, really hard for very low-income people [to afford].”

But in what Hempstead refers to as “partisan strife,” the Republicans under Obama fought that section of the ACA, asserting that it was improper for the administration to have authorized the funding and that only Congress could do it. They actually sued the Obama administration; the suit is still pending, and we now have a Republican president.

“Right now the Trump administration is in the position of having to defend this lawsuit against the House Republicans, so it’s very hard to see how this is going to resolve itself. But if the insurance companies don’t get these payments, it’s going to be extremely problematic,” says Hempstead.

Polsky agrees that if House Republicans decide to revive the lawsuit and Trump lets them win, thus withdrawing the promised funding, “there’s a chance that insurance companies would be on the hook for millions and millions of dollars … and that would entirely destabilize the markets.”

Another part of the ACA now in limbo is an arrangement called risk corridors. Field sees fixing the risk corridor problem, also known as re-insurance, as very important to the health of Obamacare. The program helps insurers participating in health care exchanges and marketplaces weather extreme gains and losses while they figure out how to price their policies effectively. Field explains, “If your risk profile as an insurance company is better than a certain level, you pay into a fund, and if your experience is worse than a certain level, you get to draw money out of that fund.”

But congressional Republicans had refused to finance the program. Here, too, legal action resulted. Insurance companies sued the federal government, and the jury is still out, according to Hempstead.

Open to Interpretation

The experts point to several other ways the current administration could significantly weaken — or strengthen, if it chooses — the ACA over the next few years. Polsky points out, “There are hundreds of places in the original ACA bill that say, ‘The Secretary of Health and Human Services shall…,’ so there was a lot of regulatory opportunity to shape the details. And that power is now in the hands of [Secretary] Tom Price.”

“If [Medicaid] went across all 50 states, it not only would help with coverage for some of the most vulnerable … it would also help stabilize the Obamacare individual market.” –Daniel Polsky

Pauly notes, “An awful lot can be done administratively, particularly on Medicaid, to very much transform the Medicaid expansion into something more to Republicans’ liking.” He lists, among other restrictions, giving states waivers so they can limit the number of people eligible for Medicaid, and potentially having a work requirement for recipients. He adds that there have already been a number of waivers introduced to push Medicaid recipients to buy private, not public, insurance. “That’s sort of the antithesis of the classic version of Medicaid, which is that it’s run by a state bureaucracy.”

Polsky and others note that the individual mandate — the requirement that Americans either have health coverage or pay a tax penalty — is another major factor in the health of health care. They comment that the Trump administration has already made statements about eliminating this requirement (with no replacement mechanism in sight) and this, too, could shake the financial foundations of Obamacare.

Hempstead observes, though, that these smaller changes (small compared to outright repeal) are not likely to happen overnight. “Rules-making is slower, and there’s a lot of opportunity for input. It’s not a magic wand. So I do think there are things that can be done administratively, but it takes time and there are some limits.”

What Might Happen at the State Level

Polsky sees a bright spot in the future of Obamacare in the fact that Medicaid expansion seems to be increasingly popular with the states. “Now that [the ACA] is not going away for the foreseeable future, I think we can expect a number additional states to decide to expand Medicaid,” he says. He notes that Kansas, a traditionally “red” state, is about to vote on the matter.  (As of March 28, Kansas and North Carolina are in the process of adopting Medicaid expansion, and several other states could re-consider it now that the ACA repeal effort has failed.)

“I’m very much a supporter of Medicaid expansion…. [Many] of the successes of the ACA can be attributed to that part of the law,” Polsky says. “And if it went across all 50 states, it not only would help with coverage for some of the most vulnerable that would qualify for Medicaid, it would also help stabilize the Obamacare individual market.” He explains that when many high-risk individuals buy insurance on the regular exchanges because they can’t get Medicaid under their state’s rules, it drives up everyone’s premiums. Shifting this group into Medicaid means premiums would go down for exchange customers.

Another positive trend, in Hempstead’s view, is that of giving the states more leeway with the ACA through an instrument called a Section 1332 waiver. She says these waivers “allow states to apply to make certain kinds of changes in their state market that might help to offset instability that’s unique to their own state…. Alaska did a 1332 waiver that allowed them to create some extra re-insurance in their market that was very helpful for them.” (There are some restrictions: Obamacare requires the states to provide coverage at least as comprehensive as that mandated by the ACA.) Hempstead notes the administration appears to have a “definite willingness” to encourage states to go this route.

“The only ones, in many states, that are hanging in there are the Blue plans…. If they start bailing out, I guess that’s the real canary in the coal mine.” –Mark Pauly

A Bipartisan Effort

Will Republicans and Democrats choose to work together to improve the ACA? “I think the chances of that happening in the current political climate are zero,” says Pauly. “The shared vision isn’t there.” He notes that only some “evidence of disaster” in the operation of the ACA might push some Democrats over to try to make common cause with moderate Republicans. He adds, “Maybe you could have a coalition of moderate Republicans and moderate Democrats … but that doesn’t exactly fit with the President’s agenda, either.”

The most obvious “disaster,” he says, would be “if insurers en masse or at least in large enough numbers pull out of exchanges because it isn’t worth it.” Particularly troubling would be a defection of Blue Cross/Blue Shield insurers. “The only ones, in many states, that are hanging in there are the Blue plans, and that’s because they operate in many states under special enabling acts that give them certain privileges.” They were created in a sort of collaboration with the state, says Pauly, and they have more of a “quasi-public orientation than do some of the Cignas of the world…. If they start bailing out, I guess that’s the real canary in the coal mine.”

Pauly’s overall prediction for Obamacare is “shrinkage but not total wipeout.” He suggests that participating in the individual insurance exchanges will become less and less attractive to many insurance firms and to consumers significantly above the poverty level, which may leave the ACA more like “a heavily subsidized plan for low-income and sick people — kind of like Medicaid expanded a little.”

Hempstead believes bipartisan collaboration is a possibility. “I certainly think there are many Democrats and moderate Republicans who understand that there are some things that would be helpful to … stabilize the market.”

Field agrees, “There may well be enough moderate Republicans who will join with Democrats to put in some of the fixes that are long overdue.” Once the ACA is out of the public spotlight, he says, there may be a return to the behind-the-scenes “old-fashioned horse trading that goes on with any major program, to try to iron out the wrinkles.”