Leaders | Obamacare

And a pony for everyone

The president-elect has made a promise he cannot keep

WHEN trying to answer a big question without much information, it is tempting to assign great significance to the few facts that can be found. So it is with Donald Trump and the Republican Congress that will be sworn in next year. Mr Trump’s proposed cabinet is being scrutinised for signs of how he will govern, but no one yet knows whether the president-elect will let his team run their fiefs or take all the decisions himself. No one knows what will be the balance of power between the White House, the vice-president, the Senate and the House. Nor does anyone know if Mr Trump will stick to the promises he made while campaigning or whether he will abandon them. It is probable that he himself does not know.

One available fact is that Mr Trump has announced he would like to keep the parts of the Affordable Care Act, better known as Obamacare, that are popular and ditch the bits that are not (see article). This has been taken as evidence of a newfound moderation. It is not. Instead it is a sign that, faced with difficult trade-offs, the president-elect likes to ignore them and promise that, yes, everyone can indeed have a pony.

Obamacare has become shorthand for how health care works for the minority of Americans who do not receive insurance through their employers. Parts of it are popular, such as the ban on insurers denying people coverage just because they are already ill. Other parts are not, such as the compulsion to buy insurance or face a fine. The popular and unpopular parts work together: forcing healthy people to buy insurance makes the business of insuring sick people profitable. The only way to get around this trade-off is with a bigger government subsidy.

If what Mr Trump has promised is unfeasible, what is likely to happen to the outgoing president’s main domestic achievement? Beginning early next year, Republicans will chip away at the things that make Obamacare just about work now, by putting someone in charge of the relevant government department who will issue directives to undo it. One move would be to change the rules that say insurance must cover paediatrics, mental illness, prescription drugs and other things besides. Insurers are locked in until the end of 2017, but at that point, facing uncertainty, they would probably withdraw.

By then there may already be a new health-care law passed by Congress. It will probably be based on a plan devised by the Speaker of the House, Paul Ryan, which eases rules on what health-insurers are allowed to charge and which conditions they must cover. This will make many insurance plans cheaper. But the sickest people will see their premiums soar and the cheapest plans will have such high out-of-pocket costs that they may not be of much practical value to their holders. Mr Ryan wants to replace Obamacare’s tax credits, which vary with income, with a universal tax credit linked to age. Such a system would redistribute less to poorer Americans.

Kick the tough stuff to the states

The most important change, though, may be to another part of the law. The expansion of Medicaid—the programme for those deemed too poor to afford insurance—is the biggest reason why the share of Americans without any health coverage dropped from 15% in 2008 to 9% in 2015. Republicans in Congress would like to let states devise their own schemes for these people and cut overall federal funding. Mr Trump has yet to say anything on the matter.

Obamacare is far from perfect: premiums shot up last year because insurers lost money in the previous one. But it contains a sensible aspiration. In America, as in other rich countries, health care ought to cover the greatest number of people possible. That idea is once again now up for discussion.

This article appeared in the Leaders section of the print edition under the headline "And a pony for everyone"

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