by Steve Rixen
Government Relations Director, Public Policy and Government Relations

Repealing and replacing the Affordable Care Act (ACA) has been a unifying, and politically potent talking point for Republicans on the campaign trail, since the law was passed nearly seven years ago. Beyond the campaign, opposition to the law in Congress by the GOP has been ubiquitous. But with President Obama wielding the power of veto, there had been very few real legislative threats to the law’s underpinnings. That all changed in November. 

The 2016 elections and the inauguration of President Donald Trump mean Republicans now control all of the levers necessary to repeal or meaningfully change the ACA. The policy reality is more complex, however, and orchestrating those levers at their disposal will not be easy. Where it gets even more complicated is navigating the political reality that they will face in their efforts to replace the law. Any effort at health reform – and make no mistake, this is “health reform” – will have loud, resounding political implications. The polarization around the ACA might continue to reflect what the surprising results of this year’s elections showed – that Americans remain deeply divided on this and many other issues. And while the unifying goal of repealing the ACA has dominated the GOP policy agenda, accomplishing that task will still be a gargantuan undertaking, and there is no guarantee of success.

The first complicating issue is the legislative process. As we saw with the ACA, even in the best-case scenario, when everything is very much in your favor, passing health reform is still an incredible challenge. For instance, in 2009 President Obama was in the White House, Democrats held 60 votes in the U.S. Senate, and they held strong majority control of the House. Even then, significant compromises like scuttling a public insurance option and making a number of small side deals were necessary for the law to be passed.

Republicans do not have the same advantages Democrats did when the ACA was passed. While they have a strong majority in the House, the chamber’s politics have been divisive between establishment leadership and more conservative members. In the Senate, a chamber that usually requires 60 votes to get most anything accomplished, Republicans hold a very narrow 52-48 majority. Procedural maneuvering, such as budget reconciliation (which can avoid the filibuster) is being attempted to target certain changes, but that process is limited to changes impacting government revenue and spending – meaning the ACA cannot be fully repealed. Even in that situation, the GOP Senate caucus cannot afford to lose more than two votes. It is highly unlikely a repeal effort will secure any Democratic votes, so moderate GOP members who are hesitant to substantially disrupt the system are crucial in advancing any bills targeting the ACA.

To maintain the needed support in Congress, there are a number of outstanding questions that must be answered before they go forward. 

  • How will they craft a plan that doesn’t dramatically increase the number of uninsured Americans?
  • Will they be willing to roll back protections gained under the law, such as eliminating annual and lifetime benefit caps and preventing coverage underwriting for those with pre-existing conditions?
  • How will they handle Medicaid expansion issues without disrupting the safety-net care for the most vulnerable and avoid damaging budgets in the expansion states?
  • Can they actually repeal the law without increasing the deficit or speeding up the insolvency date of the Medicare Trust Fund?
  • What does a replacement plan that offers lower health insurance costs and provide meaningful coverage protections actually look like?
  • Will health insurance subsidies be available to purchase insurance, and in what form? (Tax credits? Health savings accounts? Both?)

Republicans have faced criticism in the past for failing to offer an alternative approach to the ACA. That is probably unfair, because they actually have developed multiple options to choose from, including individual pieces of legislation from a number of members of Congress, proposals from conservative-leaning think tanks and, most notably, the Better Way Agenda offered by House Speaker Paul Ryan (R-Wis.) last year. 

From ongoing conversations in Washington, it now appears that the preferred GOP approach will utilize health savings accounts. It is also expected to employ state-based high-risk pools to provide coverage for the chronically ill and other heavy utilizers of health care services. There is also a real appetite to reform Medicaid – most likely through a block grant approach or a per-capita funding cap mechanism (more likely the latter). It seems likely that there will also be some form of subsidies available for the purchase of health insurance (now referred to as tax credits). There are a number of options on the table being seriously discussed – though the specifics for all of the above are not yet clear.

Once legislation is developed, the real lobbying battles will begin. Right now, there are no Congressional Budget Office cost estimates, no estimates of the coverage levels that will be provided, and no real answers about who will be impacted by any of the many tradeoffs necessary for a legislative effort of this magnitude.

With all of this in mind, we’ve scarcely mentioned the President of the United States. Once the questions above are answered, President Trump will still need to approve the bill. His campaign positions and public statements have largely mirrored the approaches that Congress is expected to take. At the same time, President Trump has reportedly not been heavily engaged in policy development efforts and has demonstrated a willingness to embrace solutions outside of the normal conservative policy orthodoxy. While it seems likely the President will support what Congress develops, it is far from guaranteed, and any opposition (potentially in 140 characters or less) could upend the entire process.   

But to be clear, there is still a strong appetite from Republicans in Congress and President Trump to repeal or significantly overhaul the ACA. Hospitals should continue to follow the law’s requirements and pay close attention to what is happening. And when the repeal and replace legislation starts to materialize, it is crucial to make sure that your members of Congress and Senators know precisely what they are proposing will mean on the ground, and how it will impact hospitals’ ability to continue to serve their communities. 

About the author. As government relations director for the Vizient office of public policy and government relations, Steve Rixen closely tracks legislative and regulatory challenges for hospitals, and helps shape advocacy strategies to effectively communicate with policymakers on behalf of Vizient and our members. He previously served as a strategic policy and communications consultant and also worked as a professional staffer for U.S. Senator Byron Dorgan.

Published: February 10, 2017