The Affordable Care Act
Repeal/Replace/Delay Cheat Sheet
Republicans in Congress have attempted to repeal the Affordable Care Act (ACA) over 60 times since 2010, but always with the safety net
of knowing President Obama would veto the repeal. Now, with a GOP-controlled House of Representatives and Senate and a Republican
President-elect who campaigned on repealing “Obamacare,” the potential for undoing the ACA just got real. And so did the follow-up
question—what comes next?
First Things First
When people say “repeal,” they usually aren’t referring to eliminating all 900 or so pages of the legislation, but rather the more controversial parts
of the ACA, like the individual and employer mandates, the health insurance marketplaces, and Medicaid expansion. Parliamentary rules, which
will be discussed below, are a big reason the entire law cannot be repealed at once, but remember that the ACA contains lots of provisions and
many that are popular:
Examples of ACA Provisions
Part D Coverage Gap Discounts
Medical Device Annual Fee
Biosimilars Approval Pathway
Increase in Medicaid rebates
Drug Manufacturer Annual Fee
Essential Health Benefits
Health Insurance Marketplaces (Exchanges)
Subsidies for premiums and coverage
Center for Medicare and Medicaid Innovation
“Cadillac” tax
Independent Payment Advisory Board
Prohibiting annual or lifetime caps
Prohibiting pre-existing condition exclusions
Expansion of
340B entities
Medicaid
expansion
Coverage on
parents’ plan
until age 26
And, no matter how much he’d like to, President-elect Donald Trump cannot repeal the ACA with the “stroke of a pen”—he will need legislation
from Congress.
Budget Reconciliation/How This Repeal Thing Could Work
While it is unlikely that Congress could introduce, pass, and get a repeal measure on the President’s desk
on Inauguration Day (January 20), it does appear that Republicans will move quickly.
Although Republicans hold majorities in both chambers of Congress, the 52-48 majority they have in
the Senate is not enough to pass most bills without bipartisan support; Democrats can filibuster any
bill and doom it to purgatory. (Filibuster = Senate rules currently require 60 votes to cut off debate
before the Senate votes.) Without a super majority of 60 votes or more in the Senate, Republicans have
another path forward—budget reconciliation.
Budget reconciliation is a congressional procedure allowing for expedited consideration of changes in
law directly related to federal spending. Reconciliation bills only require a simple majority (51) to pass,
and the scope of amendments is limited.
“We will move right
after the first of
the year on an
Obamacare repeal
resolution.”
Senate Majority Leader
Mitch McConnell (R-KY)1
1
President Trump
52R
48D
241R 194D
SENATE
HOUSE
REPUBLICAN-CONTROLLED CONGRESS
REPEALING ALL OF THE ACA
• Would need 8 Democrats to vote for repeal to
avoid filibuster. Democrats will not sign on
• Repeal of the entire ACA could happen
VERDICT: NOT LIKELY
REPEALING PIECES THROUGH
BUDGET RECONCILIATION,
REPLACE NOW
REPEALING PIECES THROUGH
BUDGET RECONCILIATION,
DELAY REPLACEMENT
• Will include Medicaid expansion, premium tax
• Will include Medicaid expansion, premium tax
credits, cost-sharing assistance, and taxes (medical
credits, cost-sharing assistance, and taxes (medical
device, biopharmaceuticals, etc)
device, biopharmaceuticals, etc)
• Highly likely budget reconciliation would pass, but • Need 51 votes—and with Republican majority, it is
any replacement would require at least 60 votes,
highly likely to pass
and without a replacement plan that Democrats
• Highly likely to pass can agree with, this is not likely
• Highly likely that budget reconciliation would get
VERDICT: PROBABLE
passed. No agreement yet on replacement bill and
the priority seems to be passing the repeal ASAP VERDICT: NOT LIKELY
Last year’s reconciliation bill, H.R. 3762,2 was ultimately (and predictably) vetoed by President Obama, but it was seen as a trial run for
how Republicans could repeal the ACA. Initial repeal efforts will likely be focused on provisions that Republicans have opposed most for
the last 6 years:
• Eliminating premium tax credits and cost-sharing reductions in the
exchanges
• Removing Medicaid expansion
• Removing the “Cadillac” tax
• Eliminating taxes (medical devices, biopharmaceutical, health
insurers, etc)
• Eliminating penalties for not complying with individual and
employer mandates and, potentially, the mandates themselves
Repeal Parts of It (And Then What?)
Repeal through budget reconciliation could be the easy part; the open question is what comes next? After all, Republicans have
acknowledged they don’t want tens of millions of Americans to suddenly be without health insurance—they would rather those individuals
be insured under mechanisms that are not prohibitively expensive and inflexibly restrictive. Additionally, withdrawing health insurance
would be incredibly unpopular and would challenge their re-election chances during the mid-term elections in 2018.
President-elect Trump has indicated that he sees a glide-path approach with one type of coverage ending and the new replacement option
starting. There is no question that something will have to eventually come in to replace the elements that would be removed through repeal;
otherwise, the government would have to raise new taxes, dramatically cut spending, or increase the deficit. As we know, there is no such thing
as a free lunch, and any replacement will need to be balanced by “offsets” or paid for by other changes to taxes or mandatory spending that
reduce deficits by an equivalent amount (thanks to the 2010 Statutory Pay-As-You-Go [PAYGO] Act).
The current marketplace is already precarious; adding to that uncertainty could tip the system into a death spiral of risk avoidance and
premium increases. While potentially inflated, the Urban Institute has some dire warnings about what could happen to insurance coverage if
reconciliation goes through.
2
Options on the Table for Replacement
Over the past 6 years, Republicans have proposed numerous ACA replacement concepts. House Speaker Paul Ryan (R-WI) spent several years
crafting “A Better Way,”3 a policy framework encompassing healthcare, tax and entitlement reform, and other issues. Rep. Tom Price (R-GA),
nominated to be Secretary of Health and Human Services, sponsored Empowering Patients First Act (H.R. 23004), a bill that repeals the ACA
and replaces it with “patient-centered solutions.”
Getting either of these approaches into law would mean garnering enough Democrat support in the Senate to avoid a filibuster, but they
could also get caught in Republican ideological crossfire in the House. The balance of courting a sufficient number of Democrats to reach
a supermajority the old-fashioned way—by compromising and including Democratic-friendly elements while not losing Republicans—will
be difficult. Not to mention that the Congressional Budget Office and Joint Committee on Taxation have already warned that coverage
will have to protect adequately against catastrophic medical events to count as coverage. All of this leads to the idea that “Repeal and
Replace” is really “Repeal and Delay.”5
Realistically, changing a social program as large as the ACA will take
time. First, the political process is going to require bipartisanship–
not an easy path during a time of such vast political division. And
Washington is most efficient against a deadline, and there is none
right now. The motto seems to be, “Why do something today if you
can do it 6 months from now?”
But even once the ACA passed in 2010, and some provisions were
effective immediately, the exchanges didn’t start until 2014. It takes time
to promulgate rules and guidance and set up systems. The exchanges
appear likely to remain for 2017 and 2018 but after that, we face a bit
of the unknown. It is doubtful insurers would be able to craft health
packages without studying the new regulations for several months.
Therefore, it may not be until 2019 before the next healthcare reform
is available, when a new Congress is elected, potentially complicating
matters more.
It looks like the next 6 to 12 months are likely to be as unpredictable
as the last 12 months. But consider yourself caught up and ready to
face the questions that come your way; and have no worries–we’ll
be watching Congress and the incoming Administration take on the
role of contortionists.
1. http://www.npr.org/sections/health-shots/2016/12/14/505439759/
how-fast-could-gop-congress-get-obamacare-repeal-to-trump-s-desk
2. https://www.congress.gov/bill/114th-congress/house-bill/3762.
3. http://abetterway.speaker.gov/.
4. https://www.congress.gov/bill/114th-congress/house-bill/2300.
5. https://www.cbo.gov/publication/52351.
What would a bipartisan ACA replacement look
like? To be sure, it will likely feature provisions
popular with Republicans, such as:
• Greater availability of health savings accounts
(HSAs) and replace subsidies with contributions
to HSAs
• More Medicaid authority granted to the states
(block grants)
• Medical malpractice reform
• Portable healthcare
• Removal and/or reduction of the essential
health benefits
• Larger cost differential between age bands
• Allow lower actuarial value plans
• Limit medical loss ratio restrictions
To start a conversation
or learn more,
visit www.xcenda.com.