Repealing and replacing the Affordable Care Act (ACA) has been a central plank in the Republican platform since the law was passed in 2010. With Republicans now in control of the House, Senate and White House, the wheels are in motion to repeal the law and replace it with patient-centered, cost-reducing reforms.
Congress has started working toward repealing the ACA under a process known as "reconciliation" where only 51 votes are needed in the Senate to pass legislation deemed to reduce the budget deficit. The House only needs a simple majority, and there are plenty of Republican votes to pass a repeal bill. With this procedure, Republicans can pass a bill that repeals core components of the ACA without the support of Democrats just as Democrats used the reconciliation process to originally pass the ACA when they held the majority.
Four congressional committees have been instructed by the budget committees to craft legislation to repeal the ACA and target the financing mechanisms that fund it. Only provisions that affect the budget are eligible to be included in reconciliation.
A number of ACA taxes are expected to be included in the reconciliation repeal bill, including the Health Insurance Tax (HIT), which NRCA has long advocated for repeal. The HIT was authorized by the ACA as a funding source and has been estimated to increase premiums on small-business and individual health insurance plans anywhere from $250 to $500 per year. NRCA and allied groups were able to secure a one-year suspension of the tax for 2017, but inclusion of the HIT in the reconciliation bill would permanently repeal the tax.
White House action
To help lead his agenda, President Trump nominated Tom Price as his secretary of Health and Human Services (HHS). The Senate confirmed Price, a congressman from Georgia, to the post in February.
In addition, President Trump issued an Executive Order that gave HHS and other agencies the authority and discretion to roll back certain aspects of the ACA. The Executive Order states agencies can "waive, defer, grant exemptions from or delay implementation of any provision or requirement of the ACA" that imposes a burden to the "maximum extent permitted by law." This could include easing penalties assessed for failing to purchase health insurance by individuals or employers that do not offer coverage.
What will replace it?
Republicans are aware of the ramifications of passing a repeal bill that doesn't include an alternative coverage options component. More than 20 million people have gained health insurance through the ACA, and a major political backlash could result if people lose coverage without a viable alternative available.
Republicans have voiced support for two popular ACA provisions they intend to keep: allowing children under 26 to remain on their parents' insurance and prohibiting health insurance companies from denying coverage to individuals with pre-existing conditions. However, Republicans firmly believe mandating employers to offer coverage and forcing individuals to buy insurance are nonstarters for a replacement bill.
House Republicans unveiled their blueprint to replace the ACA in the summer of 2016. They described it as a "step-by-step approach to give every American access to quality, affordable health care." Republicans plan to pass targeted individual pieces of legislation to expand consumer choice and lower health care costs. The main focus will be on monthly, targeted tax credits for individuals to purchase insurance. Other components include expanding health savings accounts, creating association health plans and high-risk pools for the chronically sick, capping the tax exclusion for employer-sponsored health plans and major Medicaid reforms.
Although ACA repeal was a key campaign promise of Republicans, there is no guarantee they will succeed. Crafting a replacement bill cannot be totally done through reconciliation and most likely will need 60 votes in the Senate. Democrats are reluctant to help Republicans put the health insurance market back together, and budget hawks on the Republican side of the aisle are raising concerns repeal could explode the federal deficit.
As Congress works through the complicated process of trying to repeal and replace the ACA, NRCA will continue to monitor the developments and support health care reform that contains effective solutions that address the problem of rising costs through greater competition, choice and transparency in private markets.
Andrew Felz is NRCA's manager of federal affairs.