Experts Predict ACA Repeal-and-Replace Prospects

Repeal is on the agenda, but then what?

By Stephen Miller, CEBS Jan 4, 2017
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updated Jan. 12, 2017

President-elect Donald Trump and Republican congressional leaders have announced repeatedly their intention to repeal the Affordable Care Act (ACA) once President Barack Obama leaves office. How that will play out has been the topic of speculation by experts in the field.

Washington watchers expect that shortly after Trump's inauguration on Jan. 20, GOP leaders will try to pass a measure to repeal the ACA outright. That effort, however, will assuredly face a Democratic filibuster in the Senate, which would require at least 60 votes to overcome—and Republicans have only 52 Senate votes in the new Congress.

Facing a filibuster, Republicans are likely to turn to the budget reconciliation process, in which a simple Senate majority is needed to pass measures related to federal revenues and spending, as long as those measures are budget-neutral, meaning they neither increase nor decrease overall spending or revenue. Much of the ACA was originally passed by Democrats in 2010 using reconciliation.

For the parts of the ACA that are not directly related to federal spending, such as the insurance market reforms, Republicans may start negotiating with Democrats on changing the law in ways that can attract enough senators from both parties to reach the 60-vote threshold.

Delving into these matters, health benefit specialists shared possible scenarios to repeal and replace ACA at a December policy forum hosted by the nonprofit Employee Benefit Research Institute (EBRI) in Washington, D.C.

Repeal Bill Is Happening

Opponents "cannot stand in the way of a repeal bill if the president goes out and says he wants it. They may be able to do some things to modify the transitional uncertainty, but it is happening," said Randy Hardock, a partner at law firm Davis & Harman in Washington, D.C.

The taxes that the ACA imposed on employers will "go away," he predicted. "But once they pass repeal, they won't work on replace for two or three years, because the Democrats need to be brought to the table, and they'll never cut a deal until the end" of the Congressional session.

[SHRM members-only toolkit: Communicating with Employees About Health Care Benefits Under the Affordable Care Act]

Repeal and Replace Will Be Piecemeal

"I do think they'll pass a repeal bill, but I would speculate that they'll try to do pieces of replace along with repeal," said Katy Spangler, senior vice president, health policy, for the American Benefits Council, a trade association based in Washington, D.C.

The repeal bill that Congress passed last January, which was vetoed by Obama, "saved a half-trillion dollars" based on the elimination of direct federal subsidies for ACA coverage, she noted. If a similar bill is passed in 2017, those funds would be available to fund an ACA alternative—perhaps along the lines of a bill previously supported by House Budget Committee Chairman Tom Price, R-Ga., Trump's nominee to be secretary of Health and Human Services. That measure would provide tax credits for people to buy insurance if they don't have access to coverage through an employer or government program.

However, Spangler called it "a big gamble" to hope that the Senate parliamentarian will rule that money saved by repealing the ACA could be treated as a kind of budgetary fund that could later be used to make a replacement measure budget-neutral, when passed through the budget reconciliation process. "That's a half-trillion-dollar gamble that [Republicans] might not be willing to take," she said. "So maybe they do their version of the tax credits … as part of that original repeal bill." 

Doing so, she suggested, "helps moderate Republicans know that you're not just going to have 20 million people kicked off their insurance. And that gives you time to come back and get Democrats to perfect some of the market reforms and to perfect some other things to make [ACA repeal and replacement] better."

ACA Resolution Introduced in New Congress

On Jan. 3, Republicans introduced a resolution in the U.S. Senate to set up a reserve fund for future health care legislation under an ACA replacement bill, based on savings to be derived from the repeal of the Affordable Care Act. 

While measures passed through the budget reconciliation process must be budget neutral, the resolution and related rules would give special protection to bills repealing or “reforming” the ACA, even if such bills cause a temporary increase in spending.

House Speaker Paul Ryan, R-Wis., said in a statement, "This resolution sets the stage for repeal followed by a stable transition to a better health care system. … Today we begin to deliver on our promise to the American people."

The Senate approved the repeal resolution as part of the budget for fiscal year 2017 (S.Con.Res.3), passed on Jan. 12 in a 51-48 vote along party lines; the House approved the budget measure the next day, 227-198.

The New York Times reported that starting the week of Jan. 30, the House Energy and Commerce Committee will act on legislation to carry out what is in the blueprint. That bill would be the vehicle for repealing major provisions of the health care law.


Carolyn Smith, a benefits attorney with Alston & Bird in Washington, D.C., agreed that the Republicans' vetoed repeal bill from last January could be "a model for what they're thinking about now. It's been blessed by the Senate parliamentarian, so you know that everything in there works in reconciliation. It basically got rid of pretty much all the [ACA] taxes. It got rid of the Medicaid expansion with a delayed effective date."

Left intact, Smith pointed out, were "all of the market reforms." But, she said, "I don't think that insurers are going to think it's sustainable to have none of the risk adjustment and premium subsidies," leaving them with a number of federal mandates, including required services that their health plans must cover.

A Road Map by April

"We're going to need a road map for individual and small group market coverage [for plan year 2018] by April at the latest, given the timelines for filing products and rates, and getting approval by states," said Kris Haltmeyer, vice president, health policy and analysis, for the Chicago-based Blue Cross Blue Shield Association.

The insurance industry will "need to see stability and that Congress will honor the [subsidy] commitments that have already been made for 2016 and 2017 for products that have been priced and are out in the market. And we need predictability going forward to see what the pathway is for the next two to three years."

"There are a lot of challenges if you go ahead and repeal, even with a transition, and don't provide signals to the health insurance market about what the industry is going to look like," said Jeanette Thornton, senior vice president at America's Health Insurance Plans, a Washington, D.C.-based trade association representing the health insurance community.

She agreed with Haltmeyer on the need for a transition period, noting that "making design changes to benefits and networks takes time" and that "plans are developing products and rates in the spring for the following year. We've been stressing the need to have some certainly, some rules of the road, to understand what the market is going to transition to so we can be prepared and make those changes."

With the market reforms and consumer protections that Republicans are signaling they want to keep, "what's it all going to look like?" Thornton wondered. "There's no shortage of work if you work in health policy right now."

Related SHRM Online Articles:

Republicans Introduced Range of Bills to Repeal ACA, SHRM Online Benefits, January 2017

Top 7 Workplace Legal Trends for 2017, SHRM Online Workplace Law, January 2017

How Tom Price Could Transform Employer Health Coverage, SHRM Online Benefits, December 2016

Farewell Mandates? ACA Likely to Change Substantially Under Trump Administration,SHRM OnlineBenefits, November 2016

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