The Republican Plan to Repeal and Replace the ACA: Can It Work?

Repeal of the Affordable Care Act (ACA) is on the front burner for the start of the January congressional session. Mitch McConnell, Senate majority leader, says that it is “the first item up in the new year.” There are major, unresolved questions, however, as to what repeal really means, with many provisions of the ACA supported by Republicans, insurers, hospitals, patient advocacy groups and the public. Despite their goal, the GOP still has no replacement plan after almost seven years of the ACA’s passage. It has called for a replacement plan to be based on four principles: (1) states, not the federal government, should have primary responsibility for health policy; (2) patients and doctors should be in control; (3) there should be more competition among health plans to give patients more choices; and (4) small business should have more discretion and flexibility to configure health benefits for their employees. How will these principles be implemented?

Lacking a replacement plan, Republicans are planning to delay by two to four years as they work it out. The goal of the GOP’s replacement plan is meaningless and deceptive: “to guarantee ‘universal access’ to health care and coverage, not necessarily to ensure that everyone actually has insurance.” Two proposed “plans” don’t help much to clarify replacement. House majority leader Paul Ryan’s 37-page white paper, A Better Way, relies on such already failed policies as consumer-directed health care (with “skin in the game” cost-sharing), health savings accounts, high-risk pools, selling insurance across state lines, and block grants to states. It would also encourage further privatization of Medicare and Medicaid, promote “premium support” vouchers for Medicare, and encourage businesses to band together to gain more marketing power in “Association Health Plan.” Rep. Tom Price (R-GA), as leader of the House Budget Committee, proposed in 2015 the repeal of the ACA in its entirety, privatization of Medicare, sharp cuts in Medicaid funding and defunding of Planned Parenthood. Today, as incoming appointee to head the Department of Health and Human Services (DHHS) in the Trump administration, he will have wide latitude and power to reverse whatever consumer protections may survive early repeal of the ACA with delayed replacement.

What will happen in Congress in January remains unclear. Democrats can ward off a filibuster in the Senate while the Republicans are deeply divided over the ACA’s repeal and replacement options. While GOP leaders in both the House and Senate seem to be coalescing around a two or three replacement strategy, the forty Freedom Caucus members in the House favor a more aggressive, shorter replacement schedule with adherence to free-market, small-government policies. Rep. Tim Murphy, (R-PA) backs repeal of the ACA, but wants to preserve its benefits and protections for what HHS estimates to be 60 million people with mental illness and substance abuse disorders at this time of epidemic opioid abuse, record-high suicide rates, and a critical shortage of psychiatric beds. Republican governors in a number of states that expanded Medicaid under the ACA will face a strong backlash from loss of coverage and funding if it is repealed.

Meanwhile, as tensions rise even among Republicans about their ACA strategy, corporate stakeholders are lobbying against its repeal. Private insurers, who stand to lose some 22 million enrollees in their expanded subsidized markets under the ACA, are arguing for continued coverage of their losses by the government, and if the individual mandate is repealed, that it be replaced with “strong, effective incentives, such as late enrollment penalties and waiting periods” and continued adequate payments to private Medicaid plans. As Marilyn Tavenner, former head of CMS and now chief executive of America’s Health Insurance Plans, warns: “If insurance companies believe cost-sharing subsidies will not continue, they are going to pull out of the market during the next logical opportunity.” Hospital organizations say that a repeal of the ACA without immediate replacement could cost them $165 billion by the middle of the next decade and trigger “an unprecedented public health crisis.”

Replacing a repealed ACA is a more daunting and complicated challenge than most legislators and policy makers can imagine. How can you preserve, for example, such very popular provisions as banning insurers from denying coverage based on pre-existing conditions and keeping children on parents’ plans until age 26? How can you protect Medicare from higher spending, which will lead to higher premiums, deductibles and cost sharing for beneficiaries? Without the ACA’s guarantees, how can you preserve the ability for about 52 million adults to gain coverage on individual plans? Moreover, how can you assure an adequate safety net for the 20 million more uninsured and lower-income Americans as Medicaid cuts allow states to restrict eligibility and benefits with less accountability?

Timothy Jost, JD, professor of law at the Washington and Lee University School of Law, makes a good case to not repeal the ACA until a replacement plan is ready:

First, any repeal proposal would be subject to a filibuster in the Senate and the Democrats retain more than enough votes to stop a repeal bill. Second, the Affordable Care Act contains hundreds of provisions affecting Medicare, program integrity, the health care workforce, biosimilars, prevention, and other issues unrelated to what most Americans think of as “Obamacare.” Immediate repeal of the ACA and presumably restoring the law that preceded it would likely bring the Medicare program, for example, to a halt until new rules could be written. The ACA is inextricably interwoven into our health care system and is not going away immediately.