On November 8, 2016, the fate of the Affordable Care Act (ACA) was all but sealed.
In a sweep of the legislative branch, Republicans maintained majorities in the House and Senate, and Donald Trump became the 45th president, running on the popular Republican refrain to “repeal and replace Obamacare.”
“Now, the real onus is going to be on them if they do move to repeal it in its entirety,” says Joshua Lenchus, DO, RPh, FACP, SFHM, a hospitalist at the University of Miami/Jackson Memorial Hospital in Florida and a member of SHM’s Public Policy Committee. “It’s going to be a real burden to replace it with something meaningful and not something that’s recycled from six or eight years ago when the conversation first started.”
In the days following the election, President-elect Trump appeared to be backing off his campaign promises to repeal President Barack Obama’s landmark health reform law, acknowledging that at least some of its provisions should remain intact, including maintaining the ban on insurance companies denying coverage based on preexisting conditions and allowing dependent children to remain on their parents’ health insurance until age 26.
These ideas are also part of House Majority Leader Paul Ryan’s healthcare plan, called A Better Way. However, at least on the campaign trail, Trump and GOP leaders like Rep. Ryan did not see eye-to-eye on all aspects of health reform, including how to deal with Medicare and on issues of pharmaceutical regulation, leaving uncertainty over which platforms will be adopted.
What Comes Next?
“There is a lot of rhetoric out there and a lot of promises to replace the Affordable Care Act, which clearly is an important objective for Republicans, but as sort of a consolation, as [health economist] Stuart Altman used to say before the Affordable Care Act was passed, ‘Everybody’s number-one choice is universal health reform the way they want it, and the second is the status quo,’” says Sherry Glied, MA, PhD, health policy expert and dean of New York University’s Robert F. Wagner Graduate School of Public Service.
But the status quo is no longer an option. Passage of the ACA was driven by high healthcare costs in the U.S. and, in part, around access to coverage. Healthcare spending slowed after passage of the ACA, and while it cannot be fully attributed to the law, cost remains an issue.
The Congressional Budget Office (CBO) estimates that repeal of the ACA would increase the federal deficit by $137 billion to $353 billion between 2016 and 2025, growing even more after 2025.1 And without a mechanism to cover the 20 million people who have gained coverage through Medicaid expansion and private insurance coverage on state exchanges, scores of people could rejoin the ranks of the uninsured.
A Series of Small Cuts
“Whatever system replaces it, don’t expect in Trump’s first week in office Congress will hand him a bill to repeal and replace Obamacare. They’ve tried to do that a number of times in the past, and what they’ve come up with has been a little lackluster. And that’s being generous,” says Dr. Lenchus, who overall supports President-elect Trump’s economic plans and is optimistic about what they could mean for health reform.
Most likely, the ACA will not be repealed in “one fell swoop,” says Glied, who also served under President Obama in the Department of Health and Human Services from 2010 to 2012 and was a senior economist for health care and labor market policy under Presidents George H.W. Bush and Bill Clinton. Rather, lawmakers are likely faced with having to “demolish it through a series of small cuts.”
What that will look like remains unknown. To fully repeal the ACA, Republicans would need 60 filibuster-proof votes in the Senate. However, Republicans have just 51 seats to the Democrats’ 45 after the GOP lost two seats in the November election.
House Republicans can push through a bill using a legislative maneuver called reconciliation, but it requires a majority vote in both chambers and would be restricted to changes that have an impact on the federal budget. At a minimum, Republicans would need a budget before they could attempt this strategy.
They achieved this in late 2015, drafting a bill (H.R. 3762) that would have eliminated Medicaid expansion and the subsidies that currently help 83% of enrollees on the ACA exchange afford their premiums. President Obama vetoed the bill; President-elect Trump is unlikely to do the same.
However, he and Republican party leaders must first come to agreement over what their version of health reform should look like. In general, Republicans have called for a healthcare system rooted in the free market, with more individual responsibility, less regulation, and more flexibility.
For instance, Rep. Ryan’s planwould restrict insurers from denying patients with preexisting conditions but only if individuals maintain continuous coverage, with a one-time open-enrollment opportunity.
Campaign Promises Versus President-Elect Promises
While campaigning, President-elect Trump proposed a seven-point plan that included lifting restrictions on tax-free health savings accounts, providing tax deductions for health insurance premiums, allowing the sale of health insurance across state lines, requiring physicians and hospitals to be transparent about pricing, and eliminating the individual mandate to purchase health insurance. He also proposed converting Medicaid into block grants to states and vowed not to change Medicare.
As president-elect, he has pledged, with few details, to challenge abortion access, further research and development, provide “flexibility” to Medicaid, “modernize” Medicare, and reestablish high-risk pools for sick patients with traditionally high premiums. 1 The ACA does not currently allow insurers to charge sick patients higher rates than healthy ones.
While block grants are one option for attempting to control costs in Medicaid by providing states a fixed sum to administer the entitlement program, Rep. Ryan’s plan calls for another option: per-capita limits on enrollees on Medicaid. He has not detailed what those limits would be. What will happen in states that expanded Medicaid through the ACA relative to those that did not is also unknown.
“Frankly, I think that what this election showed is a complete disdain for the general establishment,” says Dr. Lenchus. “If they do give money to state legislatures, I don’t know if I trust them any more to manage that money than the feds, where they could be robbing that block grant for general revenue.”
While President-elect Trump has not yet provided more information about his plans for Medicare, Republicans in the past, including Rep. Ryan, have proposed offering premium support to beneficiaries (sometimes called a voucher or defined contribution), a fixed sum given to Medicare participants to use toward premiums under traditional Medicare or Medicare Advantage plans.
While this could reduce beneficiaries’ out-of-pocket costs, according to the CBO, spending could also increase and beneficiaries may pay variable out-of-pocket costs. Direct spending, meanwhile, would increase by $879 billion over the next decade if all the ACA and its changes to Medicare are eliminated, hastening depletion of the Medicare trust fund.2
“Frankly, I would not be opposed to seeing a sort of sliding scale for Medicare,” says Dr. Lenchus. “If you’re Warren Buffet taking $150 a month for Medicare, do you need to do that? That $150 spread to three other people who are barely making ends meet could make the difference for them taking a lifesaving medication that month.”
What should and will likely be maintained, both Glied and Dr. Lenchus say, are changes to the delivery of and payment models for healthcare. Medicine has been moving toward higher-quality care and away from fee-for-service for years, and “everybody would agree that’s probably not the correct incentive in medicine,” Dr. Lenchus adds.
With a shift toward more state-level responsibility, Glied says the GOP may also encourage states to innovate around healthcare so long as costs are well-managed. Incidentally, under the ACA, 2017 marks the start of Section 1332 waivers, which provide structure for states to develop their own approaches to healthcare.
However, “changes in the practice of medicine are not going to come out of government,” Glied says. “They’re going to come out of improvements in health IT technology, through changes in the use of midlevel professionals who eventually slide into practice as new residents come out of training.”
Though the election all but guaranteed continued uncertainty moving forward, Dr. Lenchus does not believe it will mean much change in his day-to-day practice of medicine. His safety-net hospital, however, may see an uptick in uncompensated care once more while also trying to survive with cuts to reimbursement made through the ACA.
““I don’t think anyone’s getting the hospitals back that money,” Glied says.
The experts say Congress has its work cut out, particularly as it shapes the future of healthcare in the U.S. based on conservative principles while also taking into account the potential number of newly uninsured patients upon repeal of the ACA.
“The problem is people don’t have coverage because they don’t have money. … Healthcare is expensive, and people are poor,” says Glied. “There is a lots of space to move left in healthcare. It’s hard to see where it can move right.”
Kelly April Tyrrell is a freelance writer in Madison, Wis.
- President Elect Donald J. Trump. https://www.greatagain.gov/policy/healthcare.html
Accessed November 22, 2016
- Budgetary and economic effects of repealing the Affordable Care Act. Congressional Budget Office website. Accessed November 15, 2016.