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President Trump’s January 20 executive order regarding the ACA

On Friday, January 20th, President Trump issued an executive order that (among other things) directs federal agencies to “delay implementation” and “minimize the burdens” of the Affordable Care Act. This order may have an impact on the ACA’s individual mandate and the health insurance market. But it is important to note that the executive order does not by itself repeal the ACA, nor does it affect people’s ability to get coverage and subsidies for health plans that will cover them in the coming year. The open period for marketplace coverage for 2017 continues until January 31 and people seeking such coverage still have until the end of the month to sign up.

Notes on ACA Repeal: Where we are today (January 11, 2017)

Heated debate continues to rage over the fate of the Affordable Care Act under an incoming Administration and Congress that have pledged to repeal it.

Recent developments

The 115th Congress was sworn in on January 3, 2017. That same day, Senate Budget Committee Chairman Mike Enzi (R.-WY) introduced a budget resolution providing for the repeal of the ACA. The Senate expects to vote on that resolution (Senate Concurrent Resolution 3) on January 12th, with the House following suit the next day. While the budget resolution wouldn’t itself affect the ACA, it would instruct various Congressional committees to draw up legislation dismantling key budget-related portions of the ACA – and to do so by January 27th. The resulting repeal legislation would then be considered under special procedures allowing passage by a simple majority of the Senate rather than by the 60 votes required to break a filibuster.

It is uncertain whether Congress will meet these ambitious deadlines. Members of the Republican leadership have been arguing that Congress should adopt a “repeal and delay” plan: repealing the ACA now, but pushing off the effective date of repeal for 2, 3, or even 4 years (e.g., Sen. Mitch McConnell, House Speaker Paul Ryan, Rep. Kevin Brady). But Republican lawmakers still haven’t agreed upon a single replacement bill, an outline for such a bill, or even a timeframe for committing a replacement plan to paper.

Meanwhile, a growing number of Republican lawmakers are voicing concern about repealing the ACA without having a replacement law in place (e.g., Sens. Collins, Cassidy, Portman, Murkowski, and Corker). These senators have proposed an amendment to the budget resolution extending the time for developing “repeal” legislation until March 3, 2017. Other Senators have pushed to delay any repeal of the tax hikes embedded in the ACA to preserve revenue to pay for an ACA replacement. In yet another development on the “no repeal without replace” front, Senate Health Chairman Lamar Alexander on January 10th unveiled a proposal for a phased-in repeal of the ACA that would institute a “rescue plan” to stabilize the insurance markets while slowly building a replacement system.

These differing approaches reflect division within the Republican caucus over not just the means and timing of ACA repeal, but also the ultimate policy goals: provide expanded insurance coverage, or merely “access to coverage;” maintain patient protections, or try to drive down costs by allowing the sale of skimpy insurance policies and bringing back practices like medical underwriting; keep some version of expanded Medicaid, or eliminate all federal funding for that program; etc.

On the House side, in response to the growing discomfort with “repeal and delay,” Republican leaders are reportedly considering including some replacement provisions in the initial repeal bill: e.g., expanding the use of health savings accounts and re-establishing state high risk pools.

While disagreements arise among the various Republican factions, Congressional Democrats so far remain united in their opposition to repeal efforts. And key healthcare stakeholders and policy groups[1] have stepped up their warnings about the dangers inherent in “repeal and delay.” To cite just a few examples:

  • Health insurers participating in the Exchanges, facing an uncertain future, are likely to raise premiums or drop out entirely even before “repeal’s” projected effective date.
  • States and hospitals, anticipating big budget hits from the rise in the number of patients without coverage (private insurance and/or expanded Medicaid), will start making painful cuts ahead of the effective date.
  • Congress, having repealed the taxes that funded ACA, would have to pass new taxes to support any ACA replacement – seriously endangering chances that Congress would ever enact a comprehensive replacement.

Adding to uncertainties about the timing and scope of ACA repeal legislation, the goals of the incoming Trump administration remain unclear. Transition spokesmen suggest that the new administration is planning (unspecified) ACA executive orders on day one. These could range from: ending outreach efforts for the rest of the 2017 open period, to weakening the individual mandate, to dropping the government’s appeal in a lawsuit challenging funding for cost-sharing subsidies for Exchange plans. VP-elect Pence has said only that the executive orders will seek to minimize disruption to the insurance marketplace. With respect to the new administration’s preferences on legislation, Trump team statements have ranged from “no repeal without replace” to “no one will lose coverage” to “it would be ideal to do it all at once but” we might have to tackle replacement in phases to “the replace will be very quickly or simultaneously, very shortly thereafter.” Latest reports are that President-elect Trump is asking Congress to vote on repeal as early as next week, though observers question whether that timetable Is feasible.

Recap: Private insurance plans 

Under current rules, the Republican-led Congress only commands enough votes to repeal those provisions of the ACA that affect the federal budget (repeal of the other provisions would be subject to an almost-certain Democratic filibuster in the Senate). So Congress could act quickly to repeal the penalties that enforce the ACA’s individual mandate, and to eliminate funding for the premium and cost-sharing subsidies which ensure the affordability of Marketplace insurance plans. But commenters generally agree that Congress could not, by budget reconciliation, eliminate the patient protection/insurance reform provisions of the ACA: guaranteed issue (insurers can’t turn down a customer because of health status), community rating (insurers can’t charge sick people more than healthy people), essential health benefits (insurance plans must cover a range of meaningful benefits), and elimination of annual and lifetime caps. Certain existing Republican ACA replacement proposals do seek to eliminate some of these protections; however, as noted above, none of these proposals has yet emerged as the likely vehicle for Congress’ ultimate repeal and replace efforts.

Medicaid proposals

Congress tried to eliminate the ACA’s Medicaid expansion in a budget bill ultimately vetoed by President Obama earlier this year, but there is some question as to whether that sweeping Medicaid rollback will be part of the 2017 budget bill. Numerous governors and federal legislators – including, e.g., Ohio Governor John Kasich and Michigan Governor Rick Snyder – are starting to point out that their states would face drastic budget impacts if Medicaid expansion is abruptly repealed. VP-elect Pence has suggested that, in lieu of repeal, the Trump Administration might instead grant states additional leeway to modify their expanded Medicaid programs. This could include, for example, allowing states to require Medicaid beneficiaries to work and/or pay premiums – a tack that was taken by Indiana under then-Governor Pence. (Notably, the architect of that Indiana program, Seema Verma, has been nominated to head CMS in the new administration.)

In addition, President-elect Trump and various other Republican leaders have proposed to block grant Medicaid to the states, and this proposal seems likely to be included in the upcoming year’s budget bill. Block granting Medicaid would cap the federal contribution to Medicaid programs and raises concerns that federal funding will not keep pace with states’ rising Medicaid costs. Analysts anticipate that block granting Medicaid would result in substantial funding cuts and corresponding reductions in the number of people covered under state Medicaid programs and/or reductions in their benefits.

As one final note, the federally-funded Children’s Health Insurance Program (CHIP) comes up for Congressional reauthorization in 2017. Failure to reauthorize CHIP could leave over 8 million US children without health coverage.

Medicare proposals

Speaker of the House Paul Ryan and House Budget Committee Chairman Tom Price (the nominee for HHS Secretary) have floated plans to fast-track, via budget legislation, a far-reaching overhaul of the Medicare program. This would, among other things, raise the age of eligibility for future Medicare beneficiaries from 65 to 67, and replace the current Medicare program with a premium support or “voucher” plan under which seniors would get a fixed sum to buy health care coverage on the private insurance market.

Critics argue that the Ryan and Price Medicare privatization plans would not provide seniors with enough resources to purchase adequate coverage; question whether funding for the program would increase to keep pace with rising healthcare costs; and argue that the plan would undermine traditional Medicare by drawing away younger and healthier seniors, leaving an older, sicker, and more expensive cohort in the non-privatized program.

Reince Priebus, incoming White House chief of staff, has said that the president-elect intends to stand by his campaign promises not to cut Medicare. Senate Health Chairman Lamar Alexander has stated that he plans to address Medicare separately from ACA repeal.

[1] These include, to note just a few, the American Medical Association, the American College of Physicians, the American Academy of Actuaries, health policy experts at the conservative-leaning American Enterprise Institute, Republican governors from Medicaid expansion states, as well as numerous patient advocates and liberal policy groups.

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