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When Obamacare passed Congress, the Democrats who wrote it tried to balance competing interests and minimize winners and losers. Once it's repealed, Republicans will have to do the same thing with its replacement.

It's not clear that they can.

They'll try, but unless the new system covers as many newly insured people as Obamacare, everyone who benefits from more paying customers will be hurt — and hospitals and other health care providers are bracing for the biggest hit.

The tradeoffs: Every time there's a major reform of the health care system, there are bound to be winners and losers. Some of it can be minimized. With Obamacare, insurers had to cover more expensive patients, but they were also rewarded with new, paying customers.

Hospitals got cuts in their payments, but they also got more insured patients. And drug companies had to pay new fees, but in return, Democrats didn't go after them on drug prices.

But there are some tradeoffs that are impossible to avoid. If sick people gain coverage, as they do under Obamacare, healthy people pay more to cover the costs — because that's how health insurance works.

And if the new system is better for healthy people, it's probably going to be worse for sick people.

  • Example: Republicans want to cover pre-existing conditions only for people who have stayed insured for a long time. That's supposed to keep them from only signing up when they get sick, which drives up costs for healthy people.
  • But not everyone can afford to stay insured, so that approach leaves a "gaping hole," said John McDonough, a member of the Axios board of experts and a former Senate Democratic aide who helped write Obamacare.

That's why independent health care experts are skeptical of GOP promises of better health care at lower costs for more people. "I don't buy that. There's going to be a tradeoff if we do things differently," said Mark Pauly, a health economist at the University of Pennsylvania.

And Democrats who worked on Obamacare are skeptical that Republicans will be able to strike the same kind of deal with industry groups. That's because the groups' main incentive for accepting payment cuts in 2010 was to gain more insured customers -- which has now happened, and isn't likely to happen again.

Why it might work: Needs some official GOP response here -- Ryan? Hatch?

One way to minimize winners and losers: let current Obamacare customers keep their coverage and subsidies as long as they need it, and only switch to the new system when they're ready, according to James Capretta, a conservative health care expert who has worked on replacement plans.

And a lot of problems could be solved if insurers have more flexibility in the benefits they offer, according to Chris Condeluci, another member of the Axios board of experts.

If people can buy more basic, lower-cost plans than they can under Obamacare, more people might sign up and coverage might actually increase, said Condeluci, a consultant who was a Senate Republican aide during the passage of Obamacare.

Republicans do want to simplify the benefits, but it's not clear whether they'll "grandfather" the Obamacare coverage -- so the impact on the other health care sectors could be hard to control.

Why hospitals are worried: Take Chicago as an example. John Jay Shannon, chief executive officer of the Cook County Health & Hospitals System, says his hospitals needed $481 million in local taxpayer funds in fiscal year 2009. This year, it only needed $111 million.

Overall, most hospitals came out ahead under Obamacare, with big reductions in uncompensated care costs -- though hospitals in states that didn't expand Medicaid had less relief than hospitals in expansion states. Here's a chart that shows the difference.

"For the first time in the history of this safety net organization, we're taking care of a majority insured population," Shannon said. If newly insured people lose their coverage, he said, his hospitals will need more state and county funding again -- and they probably won't be able to get it.

What to watch for: Most industry officials and experts say it's too early to predict everything that will happen, since there's no official replacement plan yet. But based on the leading ones that have been proposed, here's how the balance of winners and losers could change.

Obamacare

Winners:

  • Sick people, because of pre-existing condition coverage.
  • Older customers, since they can only be charged three times as much as young adults.
  • Low-income people who gained coverage through expanded Medicaid, and who get the biggest subsidies for private Obamacare coverage.
  • Insurers that specialized in low-income markets and got a good mix of customers.
  • Hospitals, doctors, and other providers that gained insured customers.
  • Drug companies -- gained paying customers.
  • Medical device makers -- gained paying customers.

Losers:

  • Healthy people, who have to pay to subsidize sick people and had to buy more generous coverage.
  • Younger adults, who have to pay more to control older customers' premiums.
  • Middle-income people who have to buy coverage but get little to no subsidy.
  • Insurers that guessed wrong and had too many expensive customers.
  • Employers of low-wage workers -- like the retail, restaurant, and hotel industries -- that were most affected by the requirement to cover their workers.
  • Drug companies have been paying $3 billion a year in fees to help close Medicare Part D's gap in prescription drug coverage, while health insurers and medical device makers had to pay taxes to help finance the law. (The health insurance and medical device taxes are temporarily suspended.)

Repeal

Winners:

  • Republicans, who would be able to say they kept their promise.

Losers:

  • All Obamacare customers, facing the uncertainty of what comes next and possible loss of coverage.
  • Insurers, if the transition isn't handled well and they still have to cover sick people without an individual mandate to attract healthy people.
  • All of the health care sectors that benefit from more insured people.

Replacement

Winners:

  • Healthy people, who won't have to subsidize as many sick people and might be able to get skimpier plans again.
  • Young adults, who won't have to pay as much to subsidize older customers.
  • Middle-income people who might have more choices of health plans.
  • Community health centers, which got extra funding in the last repeal bill and might get it again.
  • Insurers, if they have better protections against people dropping in and out of coverage.
  • Governors and states, who would get more control over their health care systems.
  • States that expanded Medicaid, if they get more money from the federal government than non-expansion states under a block grant or per capita cap.

Losers:

  • Sick people, who either have to stay insured, pay higher premiums, or take their chances with high-risk pools.
  • Older customers, who might have to pay as much as five times more than young adults.
  • Low-income people who gained coverage through Medicaid expansion, and face the uncertainty of what happens in those states.
  • Low-income people in general -- switching from income-based tax credits to a flat credit could work against them.
  • Hospitals, doctors and other providers that would lose insured customers.
  • Governors and states, who would have more responsibility for the fate of the newly insured.
  • States that didn't expand Medicaid, if they get less money from the government than expansion states.
  • States that expanded Medicaid, if they end up having to kick people off of their new coverage or pay for the expansion population themselves.

TBD:

  • Drug companies, which might not have to pay the fees but could lose paying customers. (A GOP aide says pharma is "incidental" to the effort.)
  • Medical device makers -- will lose the tax, but might also lose insured customers.

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