November 10, 2016

Obamacare After Obama: A Nascent Trump Administration Considers Options

The election of Republican Donald Trump as President and a Republican-controlled House and Senate means that repeal of the Affordable Care Act (ACA) — long a top but unattainable Republican priority — is now a looming reality.

It goes without saying that the ACA, frequently called Obamacare, has been disliked by Republicans since its enactment in 2010. The law and its central program — the establishment of  health insurance exchanges and individual mandate to purchase insurance  — have already been rocked by many congressional challenges, a string of court proceedings including two that were resolved by the Supreme Court, brittle operations that have not always performed well, and, most recently, 25 percent rate increases and insurer defections.

In what may seem like an eternity ago, it is worth noting that last December the Senate used a procedure known as reconciliation to repeal much of the ACA. In January of this year, President Obama, as expected, vetoed the repeal, and Congress lacked the votes to overturn the veto. Congress could very well take a similar tack to repeal the law in early 2017, knowing that it would be signed by a President Trump. However, having a viable replacement plan likely will be key to attracting enough Republican votes: Three Republican Senators voted against this measure last year, and others could be hesitant to cast a ballot to scuttle the law absent a replacement plan.

But while repealing and replacing Obamacare is GOP orthodoxy, the party will now need to coalesce behind a viable replacement strategy, turning high-level ideals into concrete policies. House Speaker Paul Ryan has laid out a blueprint for GOP health care reform titled “A Better Way” that will be the likely foundation for the work ahead.

The President-elect had recently promised to call a special session of Congress, prior to his inauguration, to repeal and replace the Affordable Care Act. The coming lame duck session already provides such a venue, but with President Obama still in the White House until noon on January 20, 2017, it would seem such a session would need to happen after that date. Pushing deeper into the first quarter of 2017 would also enable the new administration and congressional leaders to flesh out the alternative. Speaker Ryan’s “A Better Way” tracks with candidate Trump’s health care statements on most large issues — unspooling the ACA, block-granting Medicaid, allowing health insurers to sell across state lines  and promoting consumer-directed insurance products, such as Health Savings Accounts.

However, there are issues that will challenge GOP consensus: As a candidate, President-elect Trump supported allowing consumers to import drugs from overseas as a way to increase Americans’ access to lower cost medicines. Importation bills have garnered modest support from members of both parties and were a hotter topic prior to enactment of the Medicare prescription drug benefit, but have been strongly opposed by industry, medication safety advocates and the Food and Drug Administration (FDA). The President-elect has also, at times, spoken about the need to preserve Medicare, while the House Speaker favors transitioning Medicare to a “premium support” model. Other disagreements between Republicans remain, including how to provide transitional assistance for the nearly 10 million Americans receiving subsidies through the exchanges.

Democrats will likely oppose any roll-back of ACA subsidies or Medicaid expansion. Both parties appear to support maintaining one important piece of the ACA — the market reforms such as pre-existing conditions protections that maintain the insurance coverage of vulnerable consumers. All of this suggests two likely outcomes:

  1. The ACA will be repealed; the GOP’s rhetorical investment is too high to believe otherwise. But it is less clear exactly what repeal will look like. Repeal could come in the form of a reconciliation bill that eliminates much of the ACA, but not the entire law.
  2. Beyond the ACA, the GOP has an expansive health care reform agenda and, with the White House and majorities in both houses, will likely seek to implement broader reforms during the Trump administration.
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