Why Obamacare could be the messiest battle of 2017
It’s the scenario Obamacare-hating Republicans have dreamed about: Complete control of Washington.
But it’s already clear that killing President Barack Obama’s signature healthcare law won’t be easy even with Congress in Republican hands and Donald Trump moving into the White House next month.
Unwinding a healthcare law that serves 20 million people — and at the same time ensuring that patients don’t lose coverage and that the insurance market isn’t destabilized — will be a near impossible task.
And while GOP lawmakers are eager to act swiftly on a repeal — Senate Majority Leader Mitch McConnell said it’s the “first item” on his agenda next year — there is hardly consensus on how to replace it. Passing replacement measures through Congress, meanwhile, will require help from Democrats, many of whom will refuse to lift a finger after their colleagues across the aisle have unraveled Obama’s chief legislative accomplishment.
Here’s why repealing and replacing Obamacare could be one of the messiest and ugliest political battles of 2017.
Obamacare is massive. Repealing it will be messy.
Here’s the simple reality about Obamacare: Politics aside, it is a sweeping law — now almost seven years old — that covers some 20 million people across the country. That’s a whole lot of patients whose insurance is suddenly on the line, and who will have to navigate changes to their coverage.
House Speaker Paul Ryan emphasized Monday that Republicans want to ensure nobody is “worse off” after the repeal, and that the transition period will take time.
But healthcare experts warn that even the smoothest transition will inevitably result in disruptions and unhappy patients.
“It took Democrats decades to get a health reform plan passed and Republicans are now on the clock with much less time to figure this all out,” said Larry Levitt, senior vice president at the Kaiser Family Foundation. “Reforming health care inevitably involves winners and losers and disruption, and that’s why it’s controversial. If it were easy, it would have already happened.”
The ‘repeal’ part should be simple enough…
Come January, GOP lawmakers plan to use a budget reconciliation bill — a fast-track process that can pass with just a simple majority in the Senate — to repeal parts of Obamacare.
It won’t be the “full” repeal that Trump touted during the campaign because the budget reconciliation only allows lawmakers to address budget and revenue provisions such as tax cuts or deficit reduction measures.
The good news for Republicans is that they’ve already done dry runs under Obama’s watch. Congressional aides expect last year’s budget reconciliation bill to be used as a blueprint next month. That means we can expect core parts of Obamacare to be repealed, like subsidies for the marketplaces, Medicaid expansion and the individual mandate penalties.
The ‘replace’ part? Not so much.
“Repeal is easy. They know what to do. They’ve done it before,” former Health and Human Services Secretary Mike Leavitt told CNN. “Replace will be more complex — there are different views on how it should be done… And I don’t think there’s any clarity on that yet.”
For starters, there’s a debate over when to tackle the “replace” piece.
Immediately after winning the election, Trump stressed that the repeal and replace would happen “simultaneously.”
“I know how to do this stuff,” Trump told CBS’s Leslie Stahl. “We’re not going to have a two-year period where there’s nothing.”
But the emerging consensus among congressional Republicans is that tackling both at the same time is unrealistic. Instead, party leaders are weighing a “repeal and delay” option, which would put off the repeal from going into effect for up to three years and give lawmakers time to come up with a replacement model.
Then there’s the more substantive question of how to replace Obamacare.
Republicans will look to several existing proposals for guidance: The “Better Way” paper from Ryan; legislation from GOP Rep. Tom Price, Trump’s nominee to lead HHS; as well as a proposal from GOP Sens. Richard Burr, Tom Coburn and Orrin Hatch.
They’ll need to reach agreements on controversial issues like federal subsidies offered under the ACA to help patients pay for their premiums — some Republicans advocate for tax credits to be determined only by age; other say they should vary based on income levels as well.
Medicaid is also expected to get a major facelift and likely result in less federal funding and higher costs for those covered by the program. Republicans will have to decide how to accomplish this massive overhaul, addressing complicated issues like how much federal funding states would receive.
Democrats have consistently accused Republicans of rallying around the goal of repealing the law without proposing a detailed alternative — a partial reflection of just how difficult and complex it is to overhaul healthcare. This week, Senate Democrats warned that whatever Republicans do to undo Obamacare will ultimately be the GOP’s problem to fix.
“We’re certainly not gonna be part of this idea of repeal and put nothing in place,” incoming Senate Democratic Leader Chuck Schumer said Tuesday.
Outgoing Senate Minority Leader Harry Read chimed in: “Any problems with Obamacare are the direct result of their refusal to make it better.”
Delay — but for how long?
One fault line is already emerging within the GOP over how long to delay the repeal.
Some conservative Republicans are balking at a three-year delay, arguing that the party should act much faster — ideally, during the next session of Congress.
Rep. Mark Meadows, the new chairman of the House Freedom Caucus, said this week he will push for a replacement to be enacted within two years.
“For Congress to take Obamacare and kick the can down the road to the next Congress would send a return signal that we have not gotten the message,” Meadows told CNN in a statement. “As the 115th Congress, we have to take it upon ourselves to act quickly and decisively within the next two years to repeal Obamacare and implement a responsible solution — not rely on the next Congress, as we’ve done so often in our history.”
But an aide to Meadows emphasized that while the congressman intends to fight for quicker action, there is no scenario in which Meadows would refuse to support repeal efforts.
Meanwhile, one prominent Senate Republican says delaying is a mistake. Sen. Lamar Alexander, the chairman of the Senate Health committee, is advocating for coming up with a replacement plan before the law is repealed.
The Donald Trump wildcard
Repealing Obamacare was one of Trump’s most frequently declared promises on the campaign trail. “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare,” Trump’s campaign website says.
But just days after becoming President-elect, Trump appeared to soften his tune. After a meeting with Obama at the White House, Trump — rather than doubling down on a quick repeal and replace — signaled that he was instead wiling to consider keeping portions of the ACA.
Trump’s remarks were a reminder of how unpredictable he cab be on policy and foreshadowed potential clashes with fellow Republicans as the party begins to tackle its top agenda items.
Chaos in the industry
Even as Republican leaders are urging calm about the potential chaos of repealing Obamacare before a replacement plan is ready, the reality is that the insurance market is already jittery.
Even if lawmakers delay the repeal from going into effect, insurers are under the gun to submit their initial rate filing for 2018. With that deadline fast approaching, not knowing what Republicans will eventually propose is creating heartburn.
Insurers defecting from the market would directly hit individuals covered under Obamacare, likely resulting in premium hikes.
“Carriers will go on the defensive,” Robert Laszewski, who runs Health Policy and Strategy Associates, told CNNMoney. “They will either pull out or dramatically raise rates again.”