Why the GOP Still Lacks an ACA Replacement Plan
Republican lawmakers hope to fulfill their campaign promise this week to begin to repeal Obamacare, although they remain unsure when, whether or how they’ll devise a market-based replacement system under the leadership of Donald Trump.
Replacing the Patient Protection and Affordable Care Act will require bipartisan support in a closely divided Congress. But that’s only one of many hurdles that explain why the GOP, which has contested the merits and costs of President Obama’s signature legislative achievement since 2010, has yet to reach consensus about what the party will enact in the law’s place.
Democrats, health care experts, and even the president-elect have warned Republicans on Capitol Hill that the days of politically easy repeal votes without consequence are over. Whatever the next chapter may be for private health insurance, as well as for Medicare and Medicaid, the incoming administration wants to have the last word.
The high stakes have given some Republicans on Capitol Hill pause because replacing Obamacare after its total or partial repeal is likely to take years.
Obama and Democratic lawmakers say consumers prefer to keep the law and make changes rather than repeal it and come up with something new. Recent polling tends to support their assessment.
“The question right now for [House Speaker] Paul Ryan and [Senate Majority Leader] Mitch McConnell is, why is it that you feel obliged to repeal it before you show what it is that is going to replace [the law]?” Obama said last week during an interview with Vox.
“The Republicans will own the problems with the health care system if they choose to repeal something that is providing health insurance to a lot of people,” the president continued. “Even members of their own party, even those who are opposed to me, have said that that is an irresponsible thing to do.”
Opponents of repeal warn that if Congress simply repeals the Affordable Care Act without having something to replace it, chaos could ensue. The fallout of this approach could include rising private insurance rates, a collapse of the ACA-created insurance marketplaces, rising medical costs in the Medicaid and Medicare programs, a surge of uninsured and sick people, and rising federal deficits and debt resulting from the removal of mandates and subsidies credited by Democrats with curbing the rise of health care costs overall.
Republicans, in the wake of November’s election victories, felt emboldened to put ACA repeal at the top of their legislative action list, even before Trump takes the oath of office. But a GOP-backed blueprint to replace Obamacare with a different approach may prove elusive through a good portion of Trump’s term. Here’s why:
Complexity: The ACA is a complicated, interconnected statute with tentacles reaching into nearly every aspect of a giant industry that touches one-fifth of U.S. economic output. Originally envisioned as a program that would facilitate medical care for those who lacked insurance, it also impacted many Americans covered under private health plans. It took years to construct, was imperfect on the day of its enactment, and has not undergone the necessary legislative refinements because of political impasses.
While the law expanded access to private insurance and subsidized the costs for Americans who needed help to buy private coverage, its provisions also impact Medicare, the popular federal entitlement program for seniors, and the federal-state Medicaid program, which covers the poor, children and the disabled. Medicare and Medicaid together benefit 34 percent of Americans of all ages who have health care coverage, according to recent data compiled by the Kaiser Family Foundation.
If Republicans turn to budget reconciliation as the initial process to unravel provisions of the law, they could sidestep the need for Democratic votes, but if they erase the individual and employer coverage mandates, halt Medicaid expansion in the states, and eliminate federal tax subsidies that help consumers afford coverage purchased on the ACA exchanges, the expected result would not be cost-free. Economists and health care experts predict a cascade of calamitous effects if the guts of the law are yanked out, piece by piece.
“To replace the ACA after budget reconciliation with new policies designed to increase insurance coverage, the federal government would have to raise new taxes, substantially cut spending, or increase the deficit,” the Urban Institute explained last month.
Misinformation and Scant Expertise: It’s not just average Americans who are confused about the intricacies of the Affordable Care Act. Lawmakers are, too. In the new Congress, only a fraction of House members possess deep understanding of the law beyond political slogans and anecdotes from constituents. Over the years, institutional knowledge about the intricacies of the policy have given way to political talking points.
Of the 60 Senate Democrats who voted for Obamacare seven years ago, just 27 are still in Congress. Of the 39 Senate Republicans who voted against passage of the Affordable Care Act, 23 continue to serve.
New Mandate to Deliver: For years, Republicans repeatedly voted to repeal the Affordable Care Act without offering alternatives because they didn’t need to. There was no expectation that Obama would agree to sign the GOP measures into law. In other words, Democratic members of Congress weren’t the only ones assuming that the incoming administration would be headed by Hillary Clinton.
“Prior to this year there was not an expectation that we would get a full repeal,” said Rep. Mark Meadows, chairman of the conservative House Freedom Caucus. “It’s more a function of just the reality of knowing that we wanted it to go away, but knowing that we didn’t have to push a replacement until we had enough Democrats to overcome a veto that was certainly coming from the White House."
Expectations have changed. Republicans know that in the absence of Democratic backing, the GOP will be responsible, for better or worse.
It’s a message Obama delivers in the form of a dare. "If in fact they have a program that would genuinely work better, they can call it whatever they want. They can call it Trumpcare, they can call it McConnellcare, they can call it Ryancare. If it works, I will be the first to say ‘great,’" he said last week.
Republican senators, including Rand Paul, Tom Cotton and Bob Corker, have urged their colleagues not to proceed with repeal without having a replacement measure ready to move through the House and Senate.
Corker told reporters last week that while “much of the repeal piece is about making a political point,” a “prudent course of action” would be to vote on a replacement simultaneously. Repealing ACA taxes and discontinuing revenue streams without providing a solution to the costs concerns him, Corker said at a roundtable organized by the Christian Science Monitor.
Despite the law’s wobbly early implementation and its acknowledged flaws, it has extended health insurance to an estimated 20 million Americans.
During last year’s campaign, Trump said a replacement would cover those consumers who benefit from Obamacare, and Kellyanne Conway, Trump’s incoming White House counselor, said last week that no one who currently has health insurance would lose coverage because of repeal. Although Republicans often focus their frustration on the costs and mandates associated with the law, there will be political pressure to maintain coverage for those who gained it under Obamacare.
When asked whether the Republican alternative would cover the same number of people, Ryan said he didn’t want to “get ahead of our committee process.”
“We're just beginning to put this together,” he said, noting that GOP alternatives have not been analyzed by the Congressional Budget Office. “Can we in this country have a health care system that gives us access to affordable health care … without a cost of a government takeover and death spiral, which Obamacare is giving us?” Ryan replied. “The answer is yes.”
Lack of Consensus: But first, Republicans would have to agree, which they do not.
Ryan released the blueprint of a plan last year that included tax credits for purchasing health care through private markets, selling insurance across state lines, and providing states flexibility with Medicaid funding. Rep. Tom Price, a Ryan ally and Trump’s nominee to lead the Department of Health and Human Services, is one of the few lawmakers who put a detailed replacement plan – similar in many ways to Ryan’s – into an actual piece of legislation. About one-third of House Republicans agreed in previous years to co-sponsor Price’s legislation, which never got a vote.
Price is preparing to be questioned about his Affordable Care Act replacement plan during his Senate confirmation hearing, scheduled Jan. 18.
The conservative Republican Study Committee also crafted replacement plans, and individual senators developed and released legislative outlines.
Republicans argue they have plenty of time. Rep. Chris Collins, a key Trump supporter, sees a six-month timeline to craft the detailed replacement, and some lawmakers have said they will create fixes through piecemeal legislation rather than one overarching bill.
“It doesn’t surprise me that this is going to be difficult. It’s going to be complex, it’s going to take some time, which is why I’m more on the side of people, when we’re going to do repeal, who say we need to have that replacement,” Sen. Ron Johnson said Friday. “And what I would personally prefer is to start voting on some of the damage repair measures right up front."
But this agenda must account for the desires of Democrats. Republicans can repeal the law along partisan lines, but they acknowledge they will need some Democratic support in the Senate to enact a new policy, whether it’s done piecemeal or comprehensively. Some Democrats have indicated a willingness to negotiate with the GOP immediately, hoping to stave off the repeal effort. Others have reluctantly said they’ll negotiate to try to craft new legislation, but after repeal.
“It is their obligation to come up with replace,” Senate Minority Leader Chuck Schumer said last week. “Their obligation to the millions of Americans who have benefited from this is to come up with their replacement plan and then we'll see where it goes from there.”
Obama has pushed Democrats to adopt this strategy, and has nudged Trump during their discussions to demand to see the GOP replacement measure before any repeal votes are counted.
“I said, `Make your team, and make the Republican members of Congress, come up with things that they can show will actually make this work better for people,’” the president recalled. “`And if they’re convincing, I think you would find that there are a lot of Democrats out there -- including me -- that would be prepared to support it.’ But so far, at least, that's not what’s happened.”
President Trump: To replace the embattled Affordable Care Act will require White House leadership. During his campaign, Trump said he would enact new tax deductions for health care premiums, allow health insurance purchases across state lines, and create block grants for state Medicaid programs. He also vowed to take executive actions on his own to begin an ACA purge.
Vice President-elect Mike Pence last week described preparations by Trump’s transition team to lay the groundwork for congressional action with unspecified executive actions.
"We’re working now on a series of executive orders that will enable that orderly transition to take place even as Congress appropriately debates alternatives to and replacements for Obamacare,” Pence said.
Trump could trim the “essential health benefits” that insurers are required under the law to include in coverage plans they sell consumers, without help from Congress. Those ACA benefits are specified by federal regulation, which Trump could change administratively without new law. The option is under consideration within the transition team, the Washington Post reported.
Some experts have estimated that the combined proposals Trump described during his campaign would eliminate health coverage for millions of people, especially the poor, add to federal budget deficits and debt, and raise out-of-pocket spending for all Americans, not just those who bought insurance through the ACA-created exchanges.
But Trump is also on record boasting that he opposes spending cuts to Social Security, Medicare and Medicaid.
“I was the first & only potential GOP candidate to state there will be no cuts to Social Security, Medicare & Medicaid,” he tweeted in May 2015.
Trump last week began to send cautious, backpedaling advice to Capitol Hill via his Twitter feed as Republicans set deadlines for ACA repeal in February:
Republicans must be careful in that the Dems own the failed ObamaCare disaster, with its poor coverage and massive premium increases......— Donald J. Trump (@realDonaldTrump) January 4, 2017
like the 116% hike in Arizona. Also, deductibles are so high that it is practically useless. Don't let the Schumer clowns out of this web...— Donald J. Trump (@realDonaldTrump) January 4, 2017
massive increases of ObamaCare will take place this year and Dems are to blame for the mess. It will fall of its own weight - be careful!— Donald J. Trump (@realDonaldTrump) January 4, 2017
Trump’s involvement is key to how congressional Republicans will decide to proceed. His series of tweets revealed his anxiety that Obamacare following repeal might become hazardous to his political ambitions.
Ryan said the law “has failed,” although the administration reported record sign-ups for health coverage for the 2017 enrollment period. The speaker offered no details about how he and his colleagues plan to deliver a new “patient-centered system … and access to quality, affordable health coverage.”
“The answer here is not to ignore the problem to keep some failed legacy,” Ryan added. “The answer here is bold action. … We will help Americans crying out for relief from Obamacare, and we will keep our promise to the people.”