To Protect the Uninsured, Congress Must Carefully Craft Its ACA Repeal

The Republican “repeal and delay” plan—to quickly repeal the Affordable Care Act’s funding streams, but delaying the effective date of that repeal for two or three years while they work out their “replacement”—has come under much criticism from the left for creating policy uncertainty over the next two years. But what’s more important to think about is how a poorly crafted repeal bill could undermine efforts to expand coverage to the uninsured in a durable, bipartisan, patient-centered way.

The point here is that with health care, getting the politics right is as important as getting the policy right.

The GOP wants to pass the repeal bill now to fulfill a political promise to its supporters. But Republicans don’t control the 60 Senate votes necessary to pass a true Obamacare replacement, so that will have to be worked out with Democrats over time. And the wrong repeal bill could make it politically harder for Republicans to pass a credible reform package.

Working backwards from 60 Senate votes

First, start with the premise that the GOP needs to pass a true replacement bill that replaces the ACA with a coverage expansion that works. To do that, they’ll need 60 votes in the Senate. To get 60 votes in the Senate, they’ll need to work with Democrats. To gain Democratic support, they’ll need to build replace legislation that covers approximately as many people as the ACA—ideally more.

That’s what FREOPP’s Obamacare replacement, Transcending Obamacare, is designed to do: to cover as many as 12 million more people than the ACA through a detailed set of reforms that makes health insurance less costly and more affordable.

But the point of this article is not to explore the details of the replacement—but rather to explore how to craft a repeal bill that lays the groundwork for that replacement.

Changes from the last major repeal bill, H.R. 3762

To achieve a sustainable replacement, there are two key features that the repeal bill must have. First, it must retain sufficient funding streams to cover the uninsured. Second, it must create room for the regulatory framework needed to achieve a robust market for individually-purchased health insurance.

I discuss both of these concepts in detail in a new article for Forbes. I’ll summarize the issues here.

The template for Republicans’ 2017 partial repeal bill will be H.R. 3762, the Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015. That bill repealed all of the ACA’s funding for coverage expansion and also its tax hikes. It did not repeal the ACA’s Medicare cuts nor, importantly, its plethora of new federal regulations governing the issuance of health insurance especially for people buying it on their own.

If Republicans are to come up with a replacement for the ACA that is competitive on coverage, it must replace the ACA’s regulatory structure. Politically, it will be much easier to achieve this if Republicans are able to use the reconciliation process to repeal three or four of the ACA’s costliest regulations. This will create broader policy room for a robust replacement, and will allow the Congressional Budget Office to score the replacement plan the right way in terms of its coverage expansion.

Secondly, a bill that repeals all of the ACA’s tax hikes will not leave Republicans with enough funds to put forth a replacement that is competitive with the ACA on coverage. Republicans could probably repeal 40 percent of the ACA’s tax hikes and still produce a competitive replacement.

For more details, read the full article. The bottom line is that we will know a lot about what Republicans will be able to accomplish with their replace plan by how carefully they craft their repeal bill. The picture should become much clearer by Inauguration Day.