ACA: Is it the Beginning of the End?

By Mark Lam
Posted: February 22, 2017

ACA Repeal and Replace Update

Since the time of publishing, an updated blog on the American Health Care Act has been released. 

When Donald Trump won the presidential election, many people presumed the Affordable Care Act (ACA) would be repealed and replaced almost overnight. At least that’s what was promised during the campaign. When he took office, it looked initially like that might actually happen.

Congress started the process with the first step for repeal being the introduction of a reconciliation bill (the tool they’re going to use to actually do the repeal piece), and the President signed his executive order requiring federal agencies to ease the fiscal burden on taxpayers with respect to the ACA. And then…nothing. For a few weeks, it looked like the whole effort had stalled out.

That changed Mid-February with the publication of a new regulation, a repeal “blueprint” and three new pieces of legislation ready to begin the mark-up process. Suddenly ACA repeal and replace is back on track…right? Maybe? Let’s look at what we have. 

  1. The “Market Stabilization” rule aims to give insurance carriers more confidence that they can successfully participate in the healthcare Marketplace in 2018. Carrier reaction so far has been mixed.
  2. The House’s repeal blueprint, which really is a restatement of Speaker Paul Ryan’s “A Better Way” proposal first issued last year, certainly encapsulates the plan the House is preparing for repeal of the ACA and includes details such as zeroing out the Individual and Employer Mandate penalties, and providing tax credits to Americans who do not have access to qualified coverage through an employer. But while it’s heavy on repeal, it’s light on replacement.
  3. The three pieces of legislation – dealing with pre-existing condition exclusions, expansion of health savings accounts and the creation of association health plans – are a step ahead of the blueprint. They’re actually written in legislative form, ready to start getting marked up by Congress and turned into actual laws while falling on the replace side of the ledger.

So, we’re back on track with repeal and replace, right? Again…maybe. The market stabilization rule may help keep the Marketplace afloat one more year depending on whether carriers buy into the changes it makes, and we won’t know that for another month or so. The repeal blueprint should be turned into actual legislation within the next couple of weeks, and that will likely be what the Republicans try to get through the budget reconciliation process. It will include as much of the repeal as they can get, but not all of it (the ACA reporting rules, for instance, appear to be left alone so far). 

The legislative rules though are the real issue, since they’re very much part of the replacement plan: if they cannot be incorporated into the reconciliation bill (only items directly affecting the federal budget can be included in reconciliation) then they would have to be approved through “regular order” – meaning the Republican majority in the Senate is too narrow to guarantee passage. You’d have to get Democrats on board with those bills, and they aren’t going to be inclined to vote for bills that replace the ACA.

Lastly, and most importantly, so far there’s been no plan put forward to pay for any of the proposed changes. Altogether, there’s a ton of work still to be done. We may be at the beginning of the end of the ACA, but the pace is still slow. 

So the message for now is to continue on course. The details of these new proposals will continue to unfold as Congress works through the process. You’ll hear a lot in the next few weeks from the media and special interest groups on various details of these bills. As always, take everything you hear with a grain of salt, and focus on what the bills actually say, not what people are saying about them.

We expect the next step in the process will be the publication of the House repeal bill, and once that comes out, we’ll have a much more complete picture of where the Republicans are intending to go.  We’ll provide a more detailed review at that time of the legislation that came out in Mid-February, as some of the missing pieces will then be in place to form a more coherent picture. Stay tuned! 

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