ACA Repeal/Replacement Update
Last week, the House and Senate both adopted a concurrent budget resolution (which does not need to be signed by the president), which is the first step in the ACA repeal process. The resolution was passed along party lines, except that Senator Rand Paul (R-TN) voted against it because ACA repeal would increase the deficit.
The next step is a "reconciliation" bill that, if enacted, would repeal parts of the ACA, most likely with a delayed effective date so that a replacement can be developed. This is known as the "repeal and replace" or "repeal-and-delay" strategy.
During the Senate debate on the budget resolution, a number of amendments were offered to protect different aspects of the ACA or different populations. Since it was not expected that any of these amendments would be adopted, they were offered for symbolic purposes. One such amendment, offered by Senator Sherrod Brown (D-OH), would have made it more difficult to amend the law in any way that would lower coverage rates, reduce benefits, or decrease affordability for children covered under Medicaid, CHIP or the private insurance markets established under the ACA. The Brown amendment was cosponsored by almost all Democratic and Independent Senators, along with two Republicans, Senator Susan Collins of Maine and Senator Dean Heller of Nevada. Ultimately the amendment was ruled to be out of order.
During the final vote on the budget resolution, Democratic and Independent Senators employed a unique concerted scheme to underscore their opposition to ACA repeal. Each participating Senator inquired about how their vote was recorded. As the clerk responded, they shouted out the reason they were opposing the budget resolution, such as, "I vote NO so my constituent [Jane Doe], does not lose the insurance she needs to pay for her cancer treatment." They were each admonished for speaking during the vote, but their point was made clearly and dramatically. Watch the video on C-SPAN. The dramatic vote took place around 1:00 or 1:30 AM on 1/12.
Background on the Reconciliation Process
The use of a reconciliation bill is significant for two main reasons - the relative ease with which it can pass the Senate, and the limitations on what can be included in it. A reconciliation bill can pass the Senate with a simple majority (51 votes) rather than the 60 votes usually needed to advance legislation to which any Senator objects. Since there are 52 Republican Senators, the bill will pass if all of them vote for it. But, if all the Democrats and Independents vote against repeal, as expected, then the bill will fail if at least three Republicans oppose it. (Three must oppose it because the President of the Senate - the Vice-President of the United States - can vote to break a tie.)
The second significant feature of a reconciliation bill is the fact that, under Senate rules, it can include only provisions that are primarily budgetary in nature. In the case of the ACA, this includes the individual and employer mandates, the premium tax credit, cost-sharing subsidies, and the Medicaid expansion. Provisions that probably could not be included are some of the ACA's consumer protections, such as the ban on pre-existing condition exclusions (that is, "guaranteed issue" of insurance), the ban on coverage caps, and the provision allowing children to stay on parents' health plans until they are 26. But, there are no black and white rules about what can be included in a reconciliation bill; it will be up to the Senate parliamentarian to decide.
Potential Impact of Repeal
Repealing all or parts of the ACA without immediately enacting a replacement would disrupt the insurance marketplace, as spelled out in an American Academy of Actuaries letter, possibly causing millions of Americans to lose access to affordable health insurance. The Urban Institute has estimated that 30 million people could lose their insurance by 2019 if the ACA's individual mandate and insurance subsidies are repealed even without also repealing the law's guaranteed-issue provision. Another reason insurers might drop out of the market is if their cost-sharing reduction payments are repealed. Under current law, insurers collect reduced cost-sharing amounts from eligible consumers and are subsidized for their losses by the federal government. ACA repeal would stop the payments to insurers but not their obligation to reduce cost sharing to eligible consumers. Thus, Republicans in Congress may end up providing the payments to insurers until a replacement plan is enacted.
*** Families USA has prepared fact sheets on the impact of ACA repeal on each state.***
At this point, it is unclear when the reconciliation bill to repeal the ACA will be taken up in Congress. Last week, House Speaker Paul Ryan indicated that repeal and replacement would happen together within the first hundred days of the new administration, but was vague on exactly when (and how) that would be done.
There are several potential obstacles to the rapid repeal of all or parts of the ACA: About ten Republican Senators (see below), and even some House Members, have voiced concerns about repealing the ACA without simultaneously replacing it; the president-elect has indicated that a replacement should be put in place when or shortly after the ACA is repealed; ACA advocates have been pressing their Members of Congress to oppose repeal unless an adequate replacement plan is simultaneously enacted; and several Republican governors in states that have adopted the ACA's Medicaid expansion have expressed concern about repealing it. (See below and positions of specific Republican governors.) Nevertheless, ACA repeal was a campaign promise of many Members of Congress as well as the president-elect, and remains a top priority for Republican congressional leaders.
- At least 10 Republican Senators are now on the record expressing concern, including: Sen. Alexander, Sen. Collins, Sen. Corker, Sen. Cotton, Sen. Flake, Sen. Isakson, Sen. McCain, Sen. Murkowski, Sen. Paul, and Sen. Sullivan.
- At least 8 of the Republican Governors are warning Congress about the consequences of repeal, including: Utah Gov Herbert, Massachusetts Gov. Baker, Arizona Gov. Ducey, Michigan Gov. Snyder, Ohio Gov. Kasich, Arkansas Gov. Hutchinson, Nevada Gov. Sandoval, and Kentucky Gov. Bevin.
Last weekend, the president-elect told the Washington Post that his team is almost finished drafting replacement legislation, which he expects to unveil after confirmation of his nominee for Secretary of Health and Human Services (HHS), Rep. Tom Price, MD (R-GA), which may not come until mid- to late February. As reported in the Washington Post:
"We're going to have insurance for everybody," Trump said. "There was a philosophy in some circles that if you can't pay for it, you don't get it. That's not going to happen with us." People covered under the law "can expect to have great health care. It will be in a much simplified form. Much less expensive and much better."
The president-elect did not reveal any specifics about his proposed plan. It is possible that it will be based on a plan put forward by Rep. Price in 2014, under which, among other things, would give people tax credits to purchase insurance and a tax cut to encourage the creation of Health Savings Accounts (from which pre-tax dollars could be used to purchase health care). Or, it could be based on a similar plan put forward by House Speaker Paul Ryan (R-WI) in his "Better Way" health care proposal, which, among other things, would also provide tax credits for people to purchase portable insurance plans across state lines, and promote Health Savings Accounts. Senator Rand Paul, MD (R-KY), recently announced that he is also developing legislation to replace the ACA.
Senate Democratic Leader Chuck Schumer (D-NY) indicated that Senate Democrats would be willing to work with Republicans to develop an ACA replacement plan, but would do so only before repeal of the ACA.
A recent op-ed in the New York Times poses seven questions that policymakers should address about a replacement plan before repealing the ACA. A blog post from Health Affairs provides an overview of ACA, how it's working, how it can be repealed (or not) by Congress and/or effectively repealed by the administration, and what replacement plans might look like.