Reports of the Demise of Obamacare Repeal and Replace Are Greatly Exaggerated

Many recent press reports have centered around the notion that Republicans are stuck in the mud trying to get their repeal and replace promises moving.

That line appeared to be reinforced over the weekend when President Trump said, in a pre-Super Bowl interview, that the process could draw out into next year. My sense is that what Trump was talking about was the fact that the whole process, that includes implementing the replacement, could take well past 2017. Trump, never one for getting the details right, was taken literally by the press looking to write stories about how the whole process was foundering.

Speaker Paul Ryan quickly countered in his press briefing that Republicans will legislate a repeal and replace of Obamacare this year.

As I have reported to you a number of times, that process, especially the replace part, will be very difficult to achieve given the need to have at least eight Democrats onside with a complete replace bill.

But, I can also tell you that the repeal part is still on track to occur this spring, as I have been reporting for some time, likely in March.
That process is following “regular order”—the House and Senate committee process.

The Republicans are now looking to see how much of the replace elements they can include under the Senate budget reconciliation rules.

The latest information I have is that they are looking to include the expansion of health savings accounts (as Pence recently said, paying the subsidies to consumers rather than insurers via an HSA), a provision that would encourage states to create high risk pools and provide federal funds for them (although it still sounds like the amount of money they are talking about may be well short of what would be necessary to adequately fund the pools), reforming Medicaid by creating a form of state block grants via per capita limits, and including a new tax credit scheme to subsidize consumer purchases of individual health insurance.

This is all very preliminary and subject to the fleshing out of lots of details—not the least of which is the adequacy of the consumer tax credits compared to what we have in the exchanges now. You might recall that past Republican proposals would have provided more limited support—the Hatch, Burr, Upton bill would have provided subsidies only up to 300% of the poverty level compared to Obamacare’s 400%.

Each of these elements would have to comply with budget rules requiring them to be spending oriented. All of this would ultimately be subject to being approved by the Senate parliamentarian. Even then, non-budget items like dealing with the current pre-existing provisions of the ACA and plan actuarial value provisions and deductible caps would still likely have to be dealt with in a bill requiring 60 Senate votes.

But, the process to repeal—and include substantial elements of replace in that same budget bill in order to placate Republicans wanting as much of the replace elements to occur simultaneously—is proceeding.

Reports that Republicans are hopelessly floundering are wishful thinking on the part of many that would like to think that Obamacare is too good a law to repeal.

This does not mean that the full replacement of Obamacare isn’t going to be a very, very heavy lift given the imperative to have at least eight Senate Democrats onside.

Frankly, my sense is that some Republicans, and I would put Donald Trump right at the top of this list, wouldn’t be disappointed with a crisis over getting the replacement done as a means to compel Democrats to cooperate in a final replace compromise. Trump may not understand the details of health policy, but he does understand the dynamics of getting deals done!

I would also argue that elements of replace in the repeal bill could still be subject to revision in any final replacement bill. For example, we could see the Republican continuous coverage and high risk pool provisions in the first repeal bill exchanged for a pre-existing conditions provision more consumer friendly in the final bill needing Democratic support.

As I have said before, my sense is that the final bill will look more like a fix (the new word in town is "repair") of Obamacare than the complete replacement conservative Republicans have been talking about.

But, in the end, all of the press reports aside, the repeal of Obamacare is still on track.