Mark is a Partner in the Public Policy & Regulation practice and Health Care practice at Dentons, a multinational law firm. Having worked on and around Capitol Hill for over 30 years, he is an expert in the politics around healthcare and knows the environment from every angle.
Note #2: Obamacare is a common reference to the Affordable Care Act (ACA). They are the same thing.
Last week Republicans on the House Energy and Commerce Health Subcommittee held a hearing on four Obamacare replacement bills. The move is consistent with recent Republican leadership comments that they plan to replace the Affordable Care Act with a series of small measures instead of one major replacement bill.
But at the same time, President Donald Trump in a Fox interview said that an Obamacare replacement may take until 2018. And now House Speaker Paul Ryan and leading committee chairs are saying they want to “repair” the ACA, not “repeal and replace” the law.
Legislating is hard
What’s going on here? The President is acknowledging what many policymakers already knew. Despite the campaign rhetoric that Obamacare would immediately be repealed and replaced, the process could have serious political repercussions if not done right.
There appears to be general agreement about moving away from the ACA’s insurance benefit mandates. Also, the aforementioned House subcommittee explored popular issues like how to deal with people with pre-existing health conditions, how to spur people to keep continuous coverage throughout their lives, and loosening age-rating bands. Alongside Democratic taunts that Republicans don’t know what to do after the “dog has caught the car,” or in some versions is actually trying to drive the car, the simple fact is finding a consensus on how to replace the ACA will take longer than expected.
Individual mandate is instructive
The repeal of the individual insurance mandate provides a perfect example of the dilemma Republicans face. The mandate that individuals purchase health insurance or face a penalty is a core feature of Obamacare. Republicans hate mandates and see the provision as symbolic of Obamacare's overreach in attempting to correct deficiencies in the individual insurance market.
There is broad agreement that the law should bar insurers from discriminating against people with medical problems as long as they remained enrolled in an insurance plan. But if you eliminate the mandate that that people buy insurance, you’re left with a worsening and dysfunctional market that attracts high-risk enrollees and leaves insurers with a pool of customers who are older and less well.
To cover those with existing health conditions, Republicans have floated the idea of continuous coverage–requiring everyone to maintain health coverage throughout their lives–although that sounds like a mandate to many and the GOP is still figuring out how to do it. Other ideas, like levying a surcharge on those who fail to sign up for insurance or to automatically enroll individuals eligible for subsidized coverage who don’t sign up, don’t sit well with the more conservative wing of the GOP.
Crowded Congressional Calendar
The Congressional calendar looms large in the analysis of how to repair or replace Obamacare. During the Republican retreat in Philadelphia, Speaker Ryan said he planned to bring a budget reconciliation package–that requires only 50 votes to pass rather than the usual 60–to the House floor by the end of March. This measure is expected to contain repeal and some replacement elements. But a leaked recording from the same GOP retreat last month shows a party that remains divided and uncertain about how to move forward.
The delay on ACA “repair” pushes back legislative activity on almost every other priority. In addition to action on Obamacare, Republicans want to address an overhaul of the tax code and a massive infrastructure bill. On top of that, Republicans hope to pass all 12 fiscal year 2018 appropriation bills before Oct. 1, including funding for a wall on the Mexican border. Congress hasn’t passed its appropriations bills in two decades. In addition, there are several must-pass deadlines. Congress needs to fund the government before money runs out on April 28 and raise the debt ceiling by this summer. There is widespread concern that Trump and GOP leadership have simply identified too many big-ticket, politically thorny items to tackle in year one.
On Obamacare, expect a drawn out fight, not just between Republicans and Democrats, but within the GOP. The Obamacare alternatives being considered may not prove any more popular.
Updates by Claire Sachs: March 13, 2017
House Speaker Paul Ryan introduced the American Health Care Act (AHCA) on March 6, 2017. It was referred to the Ways and Means Committee and the Energy and Commerce Committee on March 8, 2017, both of which approved it on March 9, 2017. The main differences between this law and the Affordable Care Act (Obamacare) are that:
- The Medicaid expansion would be phased out by 2020
- The individual mandate (tax penalties for not being insured) would be replaced by age-based refundable tax credits.
- Insurance companies could charge older patients up to 5x more than they charge younger patients instead of 3x.
- Insurance companies could charge a 30% penalty to people who let their coverage lapse.
- Taxes on health insurers, pharmaceutical and medical device manufacturers, and high-cost employer health plans (aka Cadillac plans) would be repealed.
- Medicaid would be barred from reimbursing Planed Parenthood.
Also on March 13, 2017, the Congressional Budget Office released its report on the AHCA. It would cut $337 billion from the deficit over 10 years, but it would also cut coverage to 14 million people by 2018, increasing to 24 million by 2026. Under the AHCA, insurance premiums would be 15-20% higher in the first year compared Obamacare, and 10 percent lower on average after 2026.
March 23, 2017
The House of Representatives was due to vote on the AHCA this evening. Earlier today, members of the House Freedom Caucus, the conservative wing of the Republican party, met with leadership and the President to negotiate last minute amendments to sway caucus members. They discussed rolling back maternity coverage and other possibilities, but negotiations were unsuccessful. Ultimately, the vote was postponed because there were not enough votes to pass the bill.
March 24, 2017
Late yesterday, President Trump issued an ultimatum to Congress: vote on the AHCA or he moves on to the next item on his agenda.
Congressional Republicans agreed and scrambled to negotiate with the Freedom Caucus. In order to make the bill more appealing, they removed the 10 essential health benefits Obamacare required in every plan. These benefits cover: outpatient services, emergency room care, hospitalization, maternity costs, mental health/substance abuse services, prescription drugs, rehabilitative and habilitative services, lab tests, preventive care such as vaccines and annual physicals, and pediatric vision and dental care.
In the end, it wasn't enough. Speaker Ryan pulled the bill off the floor after over three hours of debate because he could only afford to lose 22 Republican votes, and 36 Representatives had declared their opposition, with an additional 15 leaning toward a "no" vote.
Republicans can modify the bill and reintroduce it, but without significant changes, it is unlikely to win enough support to pass this congress.