President-elect Donald Trump repeatedly promised to repeal and replace President Obama’s signature legislation, the Affordable Care Act (ACA), and certainly the Republican Party’s continuing majorities in both chambers of Congress, coupled with an incoming Republican president, have now put the law’s future in serious question. We expect the Republican Congress to grapple with the three questions below that will affect the timing and content of a legislative alternative.
Will there be complete repeal of the ACA on day one? Not possible.
Simply put, the ACA cannot be repealed on Day One because it cannot be undone by unilateral action on the part of the Trump administration. Any repeal of the ACA would require an act of Congress, which means at least 60 votes would have to be secured in the Senate to overcome an expected Democratic filibuster of such a repeal bill.
How much of the ACA will be repealed? Can vs. will
How much of the ACA Congress can repeal might be vastly different from what Congress will repeal. There is a process congressional Republicans can use to take a giant bite out of the ACA early in 2017. Known as “budget reconciliation,” the process allows Congress to make changes that impact certain mandatory federal spending that is outside the annual appropriations process, but the question remains whether they will utilize it. Since Congress has not passed a budget for the current fiscal year (FY17), when the next Congress convenes in January, Republicans could introduce and pass a budget with reconciliation instructions to repeal parts of the ACA.
Parts of the ACA like providing insurance coverage for children to age 26 and prohibiting denials based on preexisting conditions are immensely popular. So the question now becomes whether there 50 senators able to support a process that, while repealing parts of the law, does so without putting an alternative in place.
Timing of the ACA repeal?
Since election night the health care community has debated how much of the ACA will be repealed and how quickly. There are two options. A consensus may build that the repeal and replace process should be slow and deliberate and therefore result in some of the ACA’s structure remaining in place for an unspecified period. Alternatively, President-elect Trump reach out to Democrats to work on ways to improve the ACA without a straight repeal.
If Republicans choose to use reconciliation to both repeal and replace the ACA, wholesale changes will take some time to be developed. If they instead wait to use the Fiscal Year 2018 budget process that would give Republicans time to build a consensus around a proposal to replace the ACA.
What will the Republican replacement look like?
Republican proposals that have been introduced since 2010 can serve as helpful guideposts to what provisions currently enjoy bicameral consensus. And this past summer, the House Republican Conference, led by Speaker Ryan, set out the “Better Way,” a series of proposals on key issues, including health care. When comparing the Better Way roadmap with some of the proposals introduced in the Senate in recent years some consistent themes emerge:
1. Tax credits and portable coverage: bicameral proposals all make available tax credits to individuals to purchase insurance. The Better Way proposal envisions a universal advanceable and refundable tax credit to all individual and families who do not have an offer of health coverage. The credit would not vary based on income level.
2. Insurance reforms: many from ACA remain, including continuous coverage, expanded purchasing options and state-based high risk pools.
3. Strengthened consumer-directed health: current rules governing consumer-directed health plans, like health savings accounts (HSAs) and flexible spending accounts (FSAs), would be modified.
4. Capping the employer exclusion: bicameral proposals cap the tax deductibility of employer-based health coverage in order to cover the cost of the tax credits they offer.
5. Medical malpractice reform: based on successful state laws in California and Texas, proposals include caps on non-economic damages, limitations on attorney’s fees, as well as incentives for states to adopt additional solutions to settle disputes.
6. Medicaid reform: including either capped allotments or state block grants.
