Repeal legislation. As reported last week, the House and Senate both adopted a concurrent budget resolution (which does not need to be signed by the president), which is the first step in the ACA repeal process. The resolution instructs the House and Senate committees with jurisdiction over health care policy to develop legislation that will “reconcile” current law with the resolution – in this case, legislation to repeal parts to the ACA. This is supposed to happen by January 27, but that date could slip. The committee legislation will be compiled into a “reconciliation” bill.
A reconciliation bill can include only certain types of provisions to pass the Senate – those that are primarily budgetary in nature. In the case of the ACA, this includes the individual and employer mandates, the premium tax credit, cost-sharing subsidies, the Medicaid expansion, and the Prevention and Public Health Fund, which helps to fund many public health programs. Provisions that probably could not be included are some of the ACA’s consumer protections, such as the ban on pre-existing condition exclusions (that is, “guaranteed issue” of insurance), the ban on coverage caps, and the provision allowing children to stay on parents’ health plans until they are 26. But, there are no black and white rules about what can be included in a reconciliation bill; it will be up to the Senate parliamentarian to decide.
For example, it is not clear whether the ACA’s “Essential Health Benefits” can be repealed in a reconciliation bill. Notably, “habilitation services” (therapies to help children gain or retain skills, including behavioral therapies for children with autism) are among the benefits guaranteed by the ACA that were not customarily included in many insurance plans before the law’s enactment. The ACA benefit “Pediatric services, including oral and vision care” is also at risk.
Another important feature of a reconciliation bill is that it can be approved by the Senate with a simple majority (51 votes) rather than the 60 votes usually needed to advance legislation on which there is not unanimous consent. Since there are 52 Republican Senators, the reconciliation bill will pass if all of them vote for it. But, if all the Democrats and Independents vote against repeal, as expected, then the bill will fail if at least three Republicans oppose it. (Three must oppose it because the President of the Senate -Vice-President Pence – can vote to break a tie.)
Outlook. At this point it is unclear when the Republican leadership will take up the reconciliation bill to repeal the ACA, in part due to predictions about detrimental consequences of doing so, and in part due to political pressure. Various experts, including the American Academy of Acturies, the Urban Institute, and (just last week) the Congressional Budget Office (CBO), have predicted significant increases in the number of uninsured and the cost of insurance if the ACA’s mandate to have insurance is repealed while consumer protections (especially the ban on pre-existing condition exclusions) are kept in place. CBO estimates that 18 million people would lose insurance in the first year after repeal, and premiums in the non-group market would spike by 20 percent to 25 percent. Their estimate is based on repeal legislation that Congress passed in 2015 but President Obama vetoed.
Members of Congress have also been influenced by constituents, many of whom have been mobilized by various national and state health care, consumer and labor organizations, such as the Service Employees International Union (SEIU), Families USA, and Community Catalyst. Through these organizations and other sources, constituents have access to information about how ACA repeal would affect them directly (How the Republican plans to replace Obamacare could affect you, Washington Post, 1/17/17) or affect their states’ residents in general (Families USA fact sheets on the impact of ACA repeal on each state).
Recently, House Speaker Paul Ryan indicated that repeal and replacement would happen together within the first hundred days of the new administration, but was vague on exactly when (and how) that would be done. The president has indicated that a replacement should be put in place when or shortly after the ACA is repealed. Some House Members, have voiced concerns about repealing the ACA without simultaneously replacing it, and at least 10 Republican Senators are now on the record expressing concern, including: Sen. Alexander, Sen. Collins, Sen. Corker, Sen. Cotton, Sen. Flake, Sen. Isakson, Sen. Johnson, Sen. McCain, Sen. Murkowski, Sen. Paul, and Sen. Sullivan. At least 8 of the Republican Governors are warning Congress about the consequences of repeal, including: Utah Gov Herbert, Massachusetts Gov. Baker, Arizona Gov. Ducey, Michigan Gov. Snyder, Ohio Gov. Kasich, Arkansas Gov. Hutchinson, Nevada Gov. Sandoval,and Kentucky Gov. Bevin. (See positions of specific Republican governors.)
Replacement. Republicans have not yet coalesced around any replacement plan. The president told the Washington Post over a week ago that his team is almost finished drafting replacement legislation, but he doesn’t expect to unveil it until the Secretary of Health and Human Services (HHS) is confirmed. This may not come until mid- to late February. The president did not reveal any specifics about his proposed plan. It is possible that it will be based on a plan put forward by HHS Secretary-nominee Rep. Price in 2014 or a similar plan put forward by House Speaker Paul Ryan (R-WI) in his “Better Way” health care proposal. Among other things, both plans would provide tax credits to purchase insurance, encourage the creation of Health Savings Accounts (from which pre-tax dollars could be used to purchase health care), and allow the sale of health insurance plans across state lines.
Cassidy-Collins bill. On January 23, Senators Bill Cassidy, MD (R-LA), Susan Collins (R-ME), Shelley Moore Capito (R-WV) and Johnny Isakson (R-GA) released legislative text for the Patient Freedom Act of 2017, a comprehensive replacement plan for Obamacare. The bill would repeal the ACA’s individual and mandates, the actuarial value requirements related to the four “metal” categories of health plans, age-band limitations, and the benefit mandates. It would keep the ACA’s essential consumer protections, including the prohibitions on annual and lifetime limits, pre-existing condition exclusions, and discrimination, and would retain coverage for mental health and substance use disorders. It would also preserve guaranteed issue and guaranteed renewability and allow young adults to stay on their parents’ plan until age 26. States could choose to: (1) Essentially retain the ACA, and receive federal premium tax credits, cost-sharing subsidies, and Medicaid dollars, to the extent that such subsidies do not exceed the contributions that would have been made under Option 2. (2)Choose a new state alternative, a new market-based system, and receive funding equal to 95% of federal premium tax credits, cost-sharing subsidies and the federal match for Medicaid expansion in the form of per beneficiary grants or advanced refundable tax credits, which in both cases would be deposited in a Roth Health Savings Account (HSA) directed by the consumer; or (3) Design an alternative solution without federal assistance. For more details, see Senator Collins’ website.
Senate Democratic Leader Chuck Schumer (D-NY) indicated that Senate Democrats would be willing to work with Republicans to develop an ACA replacement plan, but would do so only before repeal of the ACA.
A recent op-ed in the New York Times poses seven questions that policymakers should address about a replacement plan before repealing the ACA. A blog post from Health Affairs provides an overview of ACA, how it’s working, how it can be repealed (or not) by Congress and/or effectively repealed by the administration, and what replacement plans might look like.
Medicaid Block Grants
As explained in this article from CNN, Senior Donald Trump adviser Kellyanne Conway confirmed on Sunday that part of the administration’s plans for repealing and replacing Obamacare would include converting federal funds for Medicaid into block grants to states. The administration and many Republican Members of Congress have asserted that, in giving states greater flexibility, block grants would allow states to innovate in ways that would serve beneficiaries more efficiently. A recent paper from the Center for Budget and Policy Priorities, however, posits that block grants or per capita caps on Medicaid payments to states would allow states to cut Medicaid benefits and would actually stymie innovation. While governors historically have supported the concept of block grants, because they would like greater flexibility in administering the Medicaid program, some state officials are beginning to have second thoughts, according to this article from Modern Healthcare.
The Senate is responsible for confirming Cabinet nominees, and its various committees are now holding confirmation hearings. Despite controversies surrounding many of the nominees, they are all expected to be confirmed.
Secretary of HHS. Rep. Tom Price, MD (R-GA), a former orthopedic surgeon and long-time opponent of the Affordable Care Act, has been nominated to be the Secretary of Health and Human Services. He had a courtesy hearing (watch the hearing) before the Senate Health, Education, Labor and Pensions (HELP) Committee last week (see The Hill’s Five takeaways from Price’s confirmation hearing) and a formal nomination hearing before the Senate Finance Committee on January 24. (That committee has primary jurisdiction over the nomination since it oversees Medicare, Medicaid, Social Security, and welfare programs.) Although Rep. Price has been endorsed by the American Medical Association, he is not universally supported by the medical community.
Secretary of Education. Last week, the Senate Health, Labor, Education and Pensions (HELP) Committee held a confirmation hearing for the nominee to be the Secretary of Education, Betsy DeVos, a long-time proponent of charter schools and vouchers that can be used for private schools. The nearly four-hour hearing included a series of questions related to the Individuals with Disabilities Education Act (IDEA), to which Ms. DeVos hesitated to provide concrete answers. (Watch the archived hearing; the IDEA discussion begins at the 3 hour and 31 minute mark.) To give Ms. DeVos more time to answer written questions, and committee members time to review them, HELP Committee Chairman Lamar Alexander (R-TN) has postponed the committee vote on her nomination to January 31. On Monday, however, he refused Democrats’ request for a second hearing on DeVos. After the hearing, some of the members of the Consortium of Citizens with Disabilities (CCD), including Family Voices, sent a letter to Chairman Alexander and Ranking Member Patty Murray (D-WA) to request that a vote on the nomination be postponed until Ms. DeVos answers additional questions (specified in the letter) regarding her views on policies affecting students with disabilities.
Attorney General. Senator Jeff Sessions (R-AL), has been nominated to be the U.S. Attorney General. His nomination has been controversial and is opposed by many advocates. Based on the Senator’s record of opposing protections for people with disabilities as the Alabama Attorney General and as a Senator, several disability groups have sent a letter to the Judiciary committee opposing the nomination. Nonetheless, at this point it is expected that the Senate will approve his nomination.
Budget and Appropriations
The Hill has reported that the Trump administration is preparing a budget that would drastically reduce federal spending– by $10.5 trillion over ten years – following proposals developed by the Heritage Foundation and the Republican Study Committee. The President’s budget outline is expected to be transmitted to Congress in mid-February, with a more detailed version to follow a month or two later. The House and Senate appropriations subcommittees will then develop appropriations bills that may or may not follow the president’s recommendations.