Republicans’ Obamacare Repeal Plan Will Move Slowly, Analysts Say

BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...

By Alex Ruoff

Nov. 9 — Republicans won’t be hasty in repealing the Affordable Care Act once they assume control of the House, Senate and White House in 2017, policy analysts told Bloomberg BNA Nov. 9.

House and Senate leaders will likely work with President-elect Donald Trump in the coming months to carefully dismantle the law over the next year and replace it with their own ideas for how to regulate the health insurance industry.

The strategy, analysts said, will require executive action by the Trump administration to break apart the health reform efforts created by President Barack Obama, use of the budget reconciliation process to lift central parts of the ACA and legislative action to reduce the number of Americans losing health insurance coverage due to any changes being made.

Republicans will have to be careful about their repeal-and-replace effort because they’re unlikely to get any support from Democrats, Eugenia Pierson, a senior policy adviser for Arnold and Porter in Washington, told Bloomberg BNA. The party will have to stand by its replacement, as Democrats owned the ACA.

“It could hurt them,” Pierson said. “A lot of people are going to lose their subsidies and insurance coverage, and they’ll vote in the next election. They’ll need a replacement that works.”

Republicans have long been united against Obama’s signature health law, but it’s unclear how lawmakers will dismantle the far-reaching law and how they’ll replace its most popular provisions, namely the protections for Americans with pre-existing conditions and allowing people under 26 years of age to stay on their parents’ health plan.

Trump vowed on the campaign trail to immediately take action to repeal the ACA. In a statement provided to Bloomberg BNA, the head of the conservative Freedom Caucus said the election was a mandate from Americans to immediately repeal the law.

Rep. Jim Jordan (R-Ohio), chairman of the Freedom Caucus, said Congress and Trump in 2017 “must get to work immediately to repeal Obamacare and replace it with policies that empower doctors and their patients to make the right healthcare choices for each individual.”

House Speaker Paul Ryan (R-Wis.), however, was more muted during a Nov. 9 press conference. Ryan said having a majority in the House and Senate and control of the White House means Republicans are free to enact many of their free-market reforms, including a repeal and replacement of the ACA.

Changes Under Reconciliation

Republicans won’t control the 60 seats in the Senate required to stop a filibuster of any bill, meaning Democrats could stop Republican efforts to pass repeal-and-replace legislation through traditional means, Benjamin Conley, an attorney with Seyfarth Shaw in Washington and a representative of the Health Care Reform Center and Policy Institute, a nonprofit public policy organization, said Nov. 9.

However, Republicans could use the budget reconciliation process to pass changes to the ACA with only 51 votes, as long as they can argue those changes affect the federal budget, Pierson, who previously was a clerk for the House Energy and Commerce Committee, said. Democrats used this same process to pass the ACA along party lines six years ago.

In the House, lawmakers could pass a one-provision reconciliation bill that undercuts some of the central tenets of the ACA and expedite the law’s demise, congressional aides told Bloomberg BNA on background. Under the chamber’s rules, the Senate could pass a House-passed reconciliation measure with 51 votes. The entire process could be completed within a week under House and Senate parliamentarian rules.

Republicans in Congress opened the opportunity to use reconciliation to pass their repeal-and-replace plan early in 2016, when they passed a repeal measure (H.R.3762) they knew would be vetoed by Obama.

That bill would have ended subsidies for Americans obtaining insurance in an ACA marketplace and federal funding for states expanding their Medicaid programs starting in 2018. It also would have eliminated the penalties for failing to have health insurance and the Cadillac tax, levied on high-price health plans.

However, there’s widespread support among the public for the insurance subsidies and other ACA provisions to help Americans gain coverage, Tom Miller, a resident fellow at the American Enterprise Institute, a conservative think tank, told Bloomberg BNA. Congress is unlikely to eliminate these provisions without a similar replacement.

“I think you’ll see them move quickly on the easy stuff that’ll make life less burdensome for [Trump] voters,” Miller said.

Legislation Action

Republicans could again pass their repeal bill in 2017, giving them a year to negotiate replacement measures for the roughly 20 million American who gained insurance under the ACA, Pierson said. The ticking clock of expiring subsidies could force Senate Democrats to the table on deals for easing the pain for those who might lose coverage.

“Having a transition period would allow you to fill the gaps,” she said.

However, the repeal bill also contained a controversial provision denying federal funds to the nonprofit Planned Parenthood, which Republicans have targeted for cuts for offering abortion services. Bloomberg Philanthropies provides financial support for Planned Parenthood.

Republicans will also want to make changes to the previously passed repeal legislation, knowing it’s likely to be enacted into law, Brian Rye, a health-care analyst with Bloomberg Intelligence, told Bloomberg BNA. The bill was passed knowing it would be vetoed and could be expanded to include some replacement measures.

“It’s one thing to pass that bill when you know the president’s going to veto it,” he said. “But if you know the president might sign it, then I think there’s maybe more time taken to make sure that we have the off-ramp for individuals affected by disruption in their plan and what have you there.”

The changes could involve creating state insurance marketplaces with more insurer-friendly regulations, Rye said. Many insurers left the individual marketplaces because they couldn’t turn a profit there due to limits on premium charges, he said.

Executive Action

Trump could undermine the individual mandate by asking his health and human services secretary to loosen the hardship exemption of the mandate, effectively allowing anyone without insurance to be excused from the penalty, an adviser to the Trump campaign told Bloomberg BNA Nov. 3. The head of the agency has the authority to define these hardships, including making them applicable to nearly everyone ( 214 HCDR, 11/4/16 ).

A Trump administration could also use an ACA provision set to begin in 2017 to undermine the effectiveness of the law, analysts said. Under Section 1332 of the ACA, states can make broad changes to the law as long as the coverage is at least as comprehensive and affordable as would be provided absent the waiver; provides coverage to a comparable number of residents of the state; and doesn’t increase the federal deficit.

Trump could grant these waivers to a host of states and allow them to skirt the ACA’s rules for insurers.

Trump could also score a major blow against the ACA by refusing to support the federal government’s defense in a lawsuit by House Republicans against the Department of Health and Human Services and the Treasury Department, Miller said ( U.S. House of Representatives v. Burwell, D.C. Cir., No. 16-cv-5202, briefs filed 10/31/16).

The Obama administration is trying to reverse a decision by the U.S. District Court for the District of Columbia that held the HHS and the Treasury unlawfully paid insurers under an ACA program designed to make individual health-care insurance policies affordable for low-income people. Dropping the appeal would effectively dismantle the ACA program aimed to make policies affordable.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Kendra Casey Plank at kcasey@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.