With Donald Trump sworn in as the 45th President of the United States, the pressure is on for Congress to act on the Affordable Care Act (ACA). And the questions are swirling:
Can the entire law be repealed? If not, what portions will be repealed? Do Republicans have a plan to replace it?
Here's what we know right now.
ACA “Reconciliation” Repeal Bill
Over the past two months, we've gotten a better idea of how the ACA “repeal-and-replace” exercise may play out. For example, we know that the entire ACA cannot be repealed without Democratic support, which Republicans won’t get. So, the next best way to repeal the ACA is through the Senate’s “reconciliation” process. But that process can only repeal the spending and tax provisions of the ACA, leaving all of the ACA’s insurance market reforms in place.
We also know that while the ACA’s Medicaid expansion and premium subsidies are likely to be repealed, there will be a two- or three-year transition period associated with repeal, meaning status quo will be maintained at least as it relates to the ACA’s coverage expansion provisions, so people won’t lose their coverage immediately.
Timing on “Reconciliation” and Other ACA Improvements?
At this point, Republicans hope to enact an ACA “reconciliation” repeal bill some time in February or March. Then, by the spring, Republicans will undertake efforts to improve the current regulatory environment in the individual health insurance markets (where the ACA Exchanges operate). The idea here is to modify the ACA so insurance carriers participating in the Exchanges can stem their losses and remain in the market for 2018 and 2019.
Assuming Republicans can accomplish the above stated goals over the next few months, Republicans will move to work on various plans to replace the ACA beginning in the spring, if not sooner. It's important to understand that Republicans are not keen on passing one big comprehensive piece of legislation. So, when you think about an ACA “replace” plan, you shouldn’t think about it about as one gargantuan plan, similar to the ACA when it was enacted. Instead, you are going to see smaller, targeted pieces of legislation that Republicans will consider through “regular order” (i.e., holding hearings and mark-ups in Committee, and debate and final votes on the House and Senate floors).
“Simultaneous” Repeal and Replace?
Republicans do not yet have “replace” plans that a majority of their members support. But Republicans likely will have such “replace” plans soon. And, once those “replace” plans are officially introduced, Republicans can say they are seeking to enact “simultaneous” repeal and replace of the ACA (because Republicans will be repealing the ACA’s insurance market reforms while replacing those reforms in their “replace” plans – hence, “simultaneous”).
The bottom line is this: Republicans cannot achieve “simultaneous” repeal and replace of the ACA in early February. What they can do is achieve “simultaneous” repeal and replace as early as the spring, when Republicans officially introduce their “replace” plans. Keep in mind that the promise of “simultaneous” repeal and replace is not grounded on actual enactment of these “replace” plans, but instead the consideration of these plans.
President Trump’s Executive Order
On Inauguration Day, one of President Trump’s first orders of business was to sign an Executive Order relating to the ACA. While there has been a lot of “noise” around the impact the Order may have on things like the “individual mandate” penalty or enrollment in the ACA Exchanges, it is important to understand that the Executive Order was more about “messaging” than about real action.
Even if there’s going to be any real action, it is important to emphasize that nothing can happen until the new HHS and Treasury Secretaries are confirmed, which won’t happen until at least February. Also, depending on the process through which any changes to the ACA may be made, meaningful modifications could take months. But one thing we do know: changes are indeed coming.
So stay tuned!
To learn more about the direction of American health care reform and its potential impact to your business, join me and Benefitfocus for the upcoming webinar, ACA in 2017: Forecasting "Repeal & Replace." Save your spot here.