Senate Majority Leader Mitch McConnell (R-KY) has announced that a resolution to allow for the replacement of the healthcare law would be the first item of business for the Senate in the next Congress, starting Jan. 3. It is expected that to dismantle the law, Congress will use a budget process, known as reconciliation, that only requires a majority vote and no filibusters. It is important to note, however, that even with majorities in Congress and a Republican president, repeal and replacement of Obamacare will be difficult. Replacing the health law — and making sure voters don’t lose their coverage — is harder than it sounded on the campaign trail.
Obamacare dramatically overhauled the entire healthcare industry. It transformed not only the insurance industry, but also the way hospitals, physicians, and pharmaceutical companies are paid by the government. It affected the Medicare program and expanded Medicaid, allowing states to cover millions more Americans.
A complete repeal of the law would send the industry into chaos. It would end coverage for more than 22 million people, according to a Congressional Budget Office estimate — leaving many without access to healthcare benefits at all. Further, a complete repeal of the law would upend the insurance markets that rely on the law to encourage people to enroll in plans and it would cripple the hospitals, doctors, and even drug companies who rely on the income from those newly insured patients.
Repeal is still a winning political rallying cry. Despite the advances the health law has made, including reducing the uninsured rate to the lowest point in recorded history, the law remains deeply unpopular. An average 45% of Americans viewed the law unfavorably over the course of 2016, compared to 41% who favored it, a Kaiser Family Foundation tracking poll shows.
Obamacare — and especially the public marketplaces it set up to sell insurance to Americans who otherwise had few options to buy it — has struggled, particularly over the last six months. It was plagued by bad headlines about insurance companies, including giants like UnitedHealth Group and Aetna abandoning most of the markets they were participating in, citing financial losses. As much as one-third of the country could only choose insurance plans from a single company during this fall’s sign-up period.
Premiums for people buying insurance on the marketplaces also skyrocketed this autumn, thanks in part to Republican efforts to hamstring the Obama administration’s efforts to implement and fund the legislation. In states like Tennessee and Arizona, monthly costs increased by more than 60% or even doubled. In Oklahoma, for example, 27-year-olds who paid $250 per month for a mid-range insurance plan would now pay more than $400 each month when coverage renews in January. A family of four in North Carolina might pay $1,500 per month, up from $900 per month.
Republicans jumped on those headlines, decrying the law for its impact on everyday Americans and the astronomical prices they are paying for their health insurance and their medical care. Now, however, if Republicans can repeal and replace the law as they intend to do, they may inherit the blame for rising premiums, sky-high deductibles, dwindling marketplace competition, and steadily climbing medical costs.
The reconciliation process appears to be the path forward for repeal. Reconciliation bills cannot be filibustered, so they need just 51 votes to pass the Senate, and a 50-50 tie could be broken by the new Republican vice president, Mike Pence.
But the process does not let Republicans repeal the entire text of the law. Only provisions that affect spending and taxes are allowed to be included in a reconciliation bill. Consequently, the law’s controversial mandate that most Americans buy health insurance, as well as its unpopular penalty for foregoing it, could go. Its requirement that insurance companies sell policies to anyone, regardless of their health history or pre-existing conditions, could not. The expansion of the Medicaid program could be killed through reconciliation. Many other requirements for insurers, such as preventing them from rescinding sick patients’ benefits or banning them from imposing annual or lifetime caps on coverage, could not.
In addition, there are parts of the law that Trump could begin to unravel on his first day in office. He could almost immediately direct the Internal Revenue Service to stop fining individuals who don’t have health insurance coverage as the law’s individual mandate requires. He could also stop paying some of the subsidies insurers get for covering especially low-income Americans, those with income up to 250% of the poverty line. The requirement that all insurance companies cover birth control for women could also be struck down administratively.
Currently, Republicans are working on various legislative “replacements” for Obamacare, but the new president and Republican leaders in Congress have also made it clear that they want whatever replaces Obamacare to minimize disruption to consumers as well as the health industry. It is likely, therefore, that the repeal package will provide a two- to three-year transition period. Still, that might not be enough time to find agreement on and implement changes. It took years of hearings to develop and pass the healthcare law the first time around, and another three years to get the exchanges up and running in each state.
The Endocrine Society has long advocated on behalf of the millions of Americans living with chronic, serious, and life-threatening endocrine diseases who need access to affordable health insurance and quality health care. We have supported policies that expand access to coverage, such as those that prevent preexisting condition exclusions and allow young people to remain on their parents’ plans until age 26. We will continue to keep our members apprised of developments regarding the repeal and replacement of Obamacare.