Death Spiral, Debunked: Facts Undercut Major Argument for GOP Healthcare Plan

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Death Spiral, Debunked: Facts Undercut Major Argument for GOP Healthcare Plan

Republicans' major argument to repeal and replace the Affordable Care Act appears to be, well, bunk

GOP House Speaker pitching the American Healthcare Plan. (Photo: CNN)

Republicans have spun a lot of stories in their desperate attempt to sell the repeal of the Affordable Care Act (ACA), or Obamacare—and among their favorites is the narrative that the law is "imploding," in a "death spiral," or otherwise doomed to fail. 

There are two problems with that argument. First of all, Obamacare is not, in fact, "collapsing." And secondly, to the extent the ACA is experiencing problems, much of the blame can be placed directly at the feet of Republicans and the insurance companies to whom they are beholden.

The Congressional Budget Office (CBO) analysis released this week on the GOP's replacement plan, the American Healthcare Act (AHCA), further exposes the "death spiral" talking point as a myth: "According to the budget office," the New York Times wrote Wednesday, "the Obamacare markets will remain stable over the long run, if there are no significant changes."

"Growing evidence suggests that the markets, despite their problems, are far from collapse," continued Times reporters Reed Abelson and Margot Sanger-Katz. "Because of how the current subsidies work, people were generally shielded from this year's higher prices, and enrollment has remained steady. Several recent analyses argue that this year's increase was a market correction, and that a smoother market would follow in the years ahead."

Vox added, "the notion of 'implosion' has given the campaign for a massive rewrite a sense of urgency that, according to the CBO, is basically unwarranted."

Furthermore, the problems identified by GOP critics—insurers pulling out, a slight decline in enrollment for 2017—have actually been caused by Republicans themselves.

Under the Trump administration and the new GOP Congress, Republicans "withdrew TV and online advertising encouraging people to sign up for coverage during the crucial period before the deadline," opinion writer Dana Milbank noted Tuesday at the Washington Post. "The White House issued an executive order and took other actions that strongly implied it would no longer enforce the 'individual mandate' requiring people to sign up for coverage. And the constant promises of imminent repeal have spooked both insurers and individuals from participating."

"[President Donald] Trump and congressional allies have, in short, created a self-fulfilling expectation of collapse," Milbank continued.

And the evidence they've used to support this strategy was spurious at best. Take, for example, Trump's tweet in February that amplified Aetna CEO Mark Bertolini's claim that Obamacare was, to use the Republican jargon, in a "death spiral."

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Indeed, the massive insurance company had blamed Obamacare losses for its decision to pull out of all but four of the 15 states where it was providing ACA individual insurance—a decision that was later exposed as a bargaining chip in its failed effort to achieve a controversial merger with Humana. 

Regardless of the company's motivations, its threat and subsequent follow-through "certainly was effective in terms of its impact on the Affordable Care Act, since Aetna's withdrawal has become part of the Republican brief against the law," Los Angeles Times columnist Michael Hiltzik wrote in January. "That it says so much more about Aetna executives' honesty and integrity probably won't get cited much by GOP functionaries trying to repeal the law. Aetna is at least partially responsible for placing the health coverage of more than 20 million Americans in jeopardy; that it did so at least partially to promote a merger that would bring few benefits, if any, to its customers is an additional black mark."

Meanwhile, a report issued this month by the left-leaning Century Foundation shows that if anything will send the nation's healthcare system toward collapse, it may just be the AHCA itself.

The proposal, the foundation charged, "would not provide meaningful coverage for people with pre-existing conditions—and could result in millions of Americans with and without pre-existing conditions left with no affordable health plan options, even potentially at any cost due to insurance market instability, or even an insurance market death spiral."

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