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How Republicans plan to end Obamacare, and what they might replace it with

Even with control of the White House and both chambers of Congress, Republican promises of “repeal and replace” won’t be easy to deliver.

Congressional Republicans are expected to waste little time before rolling back key aspects of the Affordable Care Act. Their next moves will prove more difficult.
REUTERS/Jonathan Ernst

Republicans arrived in Washington for the new year dead-set on doing something they’ve been talking about for years: repealing the Affordable Care Act, and replacing it with something else.

On Tuesday, the very first day of the 115th Congress, Republicans wasted no time, introducing legislation in the Senate that begins the process of repealing Obamacare.

Now in control of both chambers of Congress, and soon the White House, Republicans should have an easy enough time with all this, right?

Wrong: The task of dismantling Barack Obama’s sweeping health care law will still be a daunting one.

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GOP lawmakers must craft a nuanced repeal plan that adheres to legislative procedure and gives them time to cook up a suitable replacement, all while keeping the U.S. health care market stable, and preserving the coverage of the estimated 22 million people who obtained coverage through Obamacare.

Partial repeal

First things first: before they replace Obamacare, Republicans have to repeal it. But that won’t be easy.

Though it would easily pass the House of Representatives, a repeal bill would stall in the Senate, where the GOP holds 52 seats — eight short of the number needed to overcome a Democratic filibuster.

But there’s a way around that filibuster: budget reconciliation. This legislative tactic allows bills related to spending, taxes, and the budget to pass the Senate with a simple majority vote, with debate limited to 20 hours, and no filibusters.

We got a preview of what that looked like in 2015, when Republicans did a practice run of a reconciliation-driven repeal — the only one of their many ACA measures to make it to Obama’s desk for a veto.

That bill would get signed into law by President Donald Trump starting January 20. But because of the rules of reconciliation, any GOP repeal efforts would be more limited in scope.

The 2015 legislation is a guidepost to what Republicans can take out of Obamacare using reconciliation, and what they cannot.

They would immediately be able to take aim at some of the law’s most critical aspects. The 2015 bill included language that eliminated the individual penalty for not having health insurance, effectively killing the ACA’s so-called health insurance “mandate.” It also curbed the federal government’s authority to operate exchanges where consumers could buy plans, such as Healthcare.gov.

It is expected that any GOP repeal plan going forward would also eliminate subsidies that the ACA provides for lower-income people to purchase health insurance, along with the taxes the law places on insurance companies and on medical devices.

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Some key elements of Obamacare, however, cannot be dislodged through the reconciliation process. For example, the ACA’s guarantee that those with pre-existing conditions cannot be denied insurance coverage could not get repealed, because it doesn’t pertain to the budget. Neither does the law’s language that individuals can stay on their parents’ health plan through age 26.

Third District Rep. Erik Paulsen, who serves on the House Ways and Means Committee that crafts health care law, advocated for getting rid of the most onerous aspects of the law as soon as possible.

“The death spiral that’s going on right now, if we don’t take action quickly, February, March, we will see double digit premium increases again,” Paulsen said. “The bottom line is it’s our intention making sure anyone who is covered remains covered, that we have a transition in place, but we’re taking immediate steps to repeal Obamacare.”

But those on the right and left see some serious problems with repealing some elements of the ACA while keeping others in place.

According to Jim Capretta, a fellow at the center-right American Enterprise Institute, getting rid of the individual mandate but keeping other things, like the protection for those with pre-existing conditions, could have hugely adverse effects on the market.

Without the mandate — the incentive to purchase care — healthy people won’t purchase plans, leading to “larger insurer losses and a real exodus of insurance plans from the marketplace in 2018,” Capretta said.

Kevin Drum of the left-leaning Mother Jones magazine points out a further problem: that the only people who purchase plans on the exchange will be those who are prompted to after getting a catastrophic diagnosis, like cancer. That would further drive up costs and destabilize the system.

But retaining pre-existing conditions protections is popular. Even if they could, there is little will among top GOP leaders to attack that provision.

Considering a replacement

Whatever the risks of their strategy, President-elect Donald Trump and the GOP Congress are under immense pressure to act on Obamacare now.

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Republican lawmakers expect the repeal package, whatever form it takes, to clear Congress in a matter of months. Then they would have a transition window — perhaps as long as four years — to pass a replacement as portions of the ACA are gradually phased out.

This is where things could get even harder. Republicans have broad ideas of what health care reforms they want to make: overall, they envision a system that reduces the federal government’s role significantly and returns to the private sector, and the states, key care decisions that they believe will lower costs for individuals.

But currently, there is no definitive plan that leaders have advanced. At the moment, GOP lawmakers are touting Speaker Paul Ryan’s so-called “Better Way” plan, which outlines certain reforms to the health care system. But it’s more like a blueprint than anything resembling a bill.

Republicans have taken stabs at an Obamacare replacement before, most recently the Patient CARE Act, written by Sens. Richard Burr, R-North Carolina, and Orrin Hatch, R-Utah.  

Hailed by some as a serious Obamacare alternative, Patient CARE centered on providing tax credits to help some individuals pay for health care, which could be used in a more flexible manner — like being deposited in a health savings account, a tax-protected savings account that people on high-deductible plans can use to pay for medical expenses. The tax credits would be adjusted based on need, taking into account an individual’s age and poverty level.

That legislation could influence any upcoming replacement. Other popular ideas within the GOP include expanding the use of health savings accounts, allowing the sale of health insurance across state lines, and expanding the ability of small businesses to pool coverage to increase their bargaining leverage with insurers.

Sixth District Rep. Tom Emmer said he wants any replacement plan to include increased authority to states.

“Minnesota was a leader in this before we force-fed the one-size-fits-all, top-down solution from Washington,” he said. “I think we should empower our state legislators, our leaders, to put together the plan that best fits our state.”

It’s unclear whether what form the replacement would take — either in pieces passed incrementally or in one large bill.

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Paulsen said it could take several forms, but emphasized it’s coming swiftly. “All of the provisions and ideas that have been talked about with the Better Way agenda, all of these components, whether we roll it out in stages or we kind of put it together in a health care package, it’s going to happen soon,” he said, adding that it could be this year.

But Paulsen invoked Obamacare in pushing back against a big-bill approach. “I do believe that it’d be a mistake to do a 2,600-page bill,” he said, “and push it through without an understanding of what the real ramifications are and what the implications are.”

It’s still early, but health care experts have suggested there’s little in current GOP plans to mitigate the adverse effects of the partial repeal of the ACA. Some things they could pursue to keep the market stable until replacement — like maintaining the individual mandate — could be too hard for some Republicans to swallow.

Democrats may provide key votes

Democrats, in the minority in both chambers and out of the White House, acknowledge there’s little they can do to stop the GOP designs on Obamacare.

If they use the budget reconciliation tactic, Senate Republicans won’t need to court Democratic support to pass their repeal — their four-seat majority will be enough. Any replacement law, though, will likely require 60 votes — meaning some Democratic votes — to pass. In the House, Democrats will be more marginalized, with virtually no way to block any repeal or replacement.

Democratic leadership is now focusing on winning over the public, and making any action against Obamacare as politically painful as possible.

Sen. Chuck Schumer, the Senate’s top Democrat, and Democratic House Leader Nancy Pelosi are organizing rallies and encouraging Democrats to hold events to whip up concern over what could happen to their constituents’ health insurance, including Medicare and Medicaid, if GOP repeal plans proceed.

On Wednesday, Obama traveled to the Capitol to meet with congressional Democrats, telling them to undertake a national organizing campaign to rally support for the law. He also called on the party to pressure moderate Republican senators who could potentially be persuaded to oppose the GOP plan.

At a press conference later, Democratic senators stood with Schumer, who proclaimed Trump and the GOP wanted to “make America sick again.” The Democratic leader vowed his caucus would not help Republicans replace the law.

Like their Republican counterparts, though, Democrats are not unified on an Obamacare strategy.

Sen. Al Franken, who sits on the Senate health panel, said in a statement to MinnPost that “dismantling the ACA is a dangerous and short-sighted move that will hurt millions of people,” and that the law should be built on and not ripped up.

Franken said the GOP has not offered up a viable replacement plan. “Republicans are playing political games with people’s lives, and the consequences could be disastrous,” he said.

First District Rep. Tim Walz agreed that the GOP pursuit a repeal without a replacement plan would be “catastrophic.” But unlike other Democrats, he’s willing to work with them on crafting that replacement.

The Mankato Democrat pushed back against the notion that Democrats should block the GOP’s efforts at every turn, and said he said the “make America sick again” messaging was the wrong way to go.

“If we say we’re going to obstruct, and say [Republicans] own this, then the public’s going to get mad at them, then we’re no better than they were,” he said.

Walz said he was going to try to look for places where like-minded Democrats and Republicans could work together to make meaningful reforms.

“If they can show some of these things are going to work, I’m willing to try on that,” he said. “Maybe they’re going to make some proposals in here that are going to fix some of these problems. I want to be there when they do.”

Explaining that his constituents are in “crisis mode” over high health care costs, Walz said any reform that works is worth Democratic support.

“If they want to call it Trumpcare and say it works and take credit for it, I’m fine with that,” Walz said. “If it actually works.”