After Obamacare Repeal, a Replacement Could Take Years

On the campaign trail, Donald Trump regularly promised he would repeal Obamacare, aka the Affordable Care Act. Since the ACA was passed, Republicans have tried repealing it, but could not overcome either a Democratic Senate or a presidential veto.

Now, with both houses of Congress and the presidency in Republican hands, a repeal is expected to come soon after the new Congress convenes, but it will be a partial repeal that will not take effect for two to three years.

The Republicans are limited in what they can do. They only have the votes needed to repeal the appropriations that fund the ACA, and they have not agreed among themselves how to replace the program.

At a Dec. 12 press conference, Senate Majority Leader Mitch McConnell said Congress would repeal Obamacare at the start of the new session, but he would not give a timeline for replacement.

The repeal McConnell has in mind will cut appropriations made in the Health Care and Education Reconciliation Act of 2010, a companion to the ACA that provides its funding.

The repeal of these budgetary measures can be done under a rule called reconciliation, which allows the Senate to pass budgetary matters with a simple majority. In these cases, filibuster isn’t allowed. For non-budgetary matters, the minority can block a vote with a filibuster, which requires 60 votes to end.

The budgetary cuts would be scheduled to take effect in two to three years, giving the Republicans time to work out what they want to put forward in place of Obamacare. Since the Republicans only hold 52 seats in the Senate, meaning the Democrats can filibuster any non-budgetary bill they oppose, this will involve negotiations with the Democrats.

Complicated Politics

The politics of repealing and replacing Obamacare are complicated and dynamic.

The Republicans need to move ahead briskly with a repeal in order to reassure their base, who may otherwise feel betrayed.

But stakeholders in the health care system have expressed concerns that the Republican strategy of repealing now and replacing later may disrupt or destabilize that system.

The American Academy of Actuaries wrote in a Dec. 7 letter to congressional leaders: “Delaying the effective date of repeal while a replacement is worked out likely won’t be enough to assure the stability and sustainability of the individual market.”

The letter notes that repeal of provisions of the ACA could cause a decline in enrollment, which would lead to higher premiums.

However, in an appearance on CNBC on Dec. 7, Speaker of the House Paul Ryan argued that Obamacare was already failing: “You have to remember this law is getting much worse. It is what actuaries say, ‘Entering a death spiral.’ High, high premiums increase, high deductibles, no choices.”

By July 2016, 16 of the original 23 Obamacare state-run health exchanges had closed. With Aetna, UnitedHealth, and Humana reducing or withdrawing their offerings of health insurance, some regions of the country only have a single or no company left offering insurance. In October 2016, according to U.S. government data, Obamacare insurance premiums were expected to rise 25 percent on average in 2017.

With this string of bad news, one might expect the popularity of Obamacare to be falling, but recent polling tells a different story.

According to a Pew Research Poll published on Dec. 8, 48 percent of Americans approve of Obamacare and 47 percent disapprove. This shows positive movement in favor of the law. In mid-2016, around 54 percent disapproved, with around 44 percent approving.

The two- to three-year window Republicans are considering for replacing Obamacare means the vote for replacement may occur after the midterm elections in 2019, and the popularity of the ACA will be looked at carefully by senators facing election.

One can expect the Republican leadership to schedule votes that will require Democrats either to sign onto a Republican plan or risk being perceived as having voted against reform. At the same time, Democrats will describe their voting against Republican plans as defending Obamacare.

The Democrats are heavily exposed, with 25 senators up for election, versus eight Republicans. Ten of the Democrats are running in Republican-leaning states. It is possible that the Republicans could pick up the eight seats they need to have 60 seats and a filibuster-proof majority.

Replacement

Trump has said he wants to retain two provisions of the ACA: ensuring that those with pre-existing conditions are not denied insurance, and allowing parents to keep children up to the age of 26 on their insurance plans.

The coverage of those with pre-existing conditions is less difficult than is often assumed. Prior to the ACA, the law already required Medicaid and companies offering insurance to cover those with pre-existing conditions.

Trump has also said that he does not want, in replacing Obamacare, to deprive anyone of insurance, a goal that complicates Republican efforts. In a recent report, the Congressional Budget Office estimated that ending the individual mandate requiring everyone to purchase insurance would result in 15 million people losing insurance. The White House has claimed that 20 million people have gained insurance through Obamacare.

In planning to replace Obamacare, the Republicans have plans in hand and a broad agreement on general principles. Tom Price, the nominee for secretary of health and human services, has submitted a bill calling for the repeal and replacement of Obamacare each year since the act passed.

House Speaker Ryan drew on Price’s plans, and those offered by other Republican lawmakers, to produce “A Better Way to Fix Healthcare.” The general approach is to move toward a free market and away from mandates and governmental administration of health insurance.

The Republicans describe their approach as “patient centered.” Among other measures, it involves giving individuals tax credits and health savings accounts to make their purchase of health insurance portable. Insurers can offer simpler and lower cost plans than are available under the ACA, which requires everyone to purchase plans with a full range of services.

Also, insurance can be offered across state lines, introducing the competition of a national market for health care. There is also an emphasis on tort reform, reducing the cost of malpractice insurance.

Perhaps the most controversial provisions in the Republican plans involve conscience protections. Businesses would not be required to offer, and consumers not required to purchase, insurance that goes against their conscience. This means insurers will not be required to pay for contraception.

In addition, the Republican plans call for no federal dollars going to pay for abortions.

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