There is no issue more fraught with political danger in repealing Obamacare than the question of what to do about the expansion of Medicaid.

The majority of people who got insured under Obamacare got it by a massive expansion of the Medicaid entitlement program.  Americans who live in households that show income 138% above the poverty line are currently eligible to receive Medicaid benefits.

Fully 15 million people have been added to the Medicaid rolls since Obamacare was implemented.  Surprisingly, almost half of those people were already eligible for Medicaid but hadn't signed up for it previously.  The rest of the enrollees took advantage of the expanded criteria for eligibility.

So it's not simply a question of rolling back Medicaid expansion and throwing 15 million people off their insurance.  And Rand Paul recognizes the problem in repeal-replace.

Politico:

The Kentucky Republican, who along with President-elect Donald Trump has come out strongly in favor of a simultaneously repeal-and-replace approach to the health care overhaul, was asked on CNN whether people covered under the law's expansion of Medicaid would continue to receive benefits after a potential repeal.

"That's the big question," he said on "State of the Union." "And I don't think that's going to be in the replacement aspect. I think that's going to be in the repeal aspect."

"The vast majority of people that got insurance under President Obama's Obamacare, the Affordable Care Act, got it through Medicaid," the Paul said. "What we have to decide is what can be kept and what can't be kept. And that's going to be part of repeal."

Paulagain stressed the need for a same day repeal-and-replace approach.

"We have had six years to complain. And we have complained. I have been one of those complaining about Obamacare," Paul said. "Replacement should be the same day."

In any replacement bill, the problem of subsidies is going to have to be addressed.  Allowing taxpayers to subsidize someone who makes 148% above the poverty level will have to go.  But at the same time, Obamacare-mandated coverages will have to be repealed so that insurance companies have the flexibility to offer cheaper plans.  In effect, employing market-friendly reforms will reduce the need for subsidies and allow more people to gain access to cheaper insurance plans.

Perhaps some kind of deal can be struck that will include a minimal expansion of Medicaid for all states in exchange for more flexibility for insurance companies like a higher deductible and the ability to sell policies across state lines.

Simply repealing Obamacare will not be enough.  Making health insurance more market-friendly will do more to reduce costs than anything Obama ever proposed.