The Budget Reconciliation Process is Underway

2017 has arrived, and so too has the New Congress. Members were sworn in yesterday, and have immediately gotten to work on one of their highest priority agenda items: dismantling Obamacare through the budget reconciliation process.

On the first day of the new Congress, Chairman of the Senate Budget Committee, Senator Mike Enzi (R-WY), introduced a resolution that initiates the process for repealing many components of the Affordable Care Act (ACA). The budget reconciliation process requires only a simple majority to pass in the Senate, which means that the current Republican majority of 52 Senators is enough to bring the final legislation to President Trump’s desk.

The resolution is just the first step. As explained in the budget committee press release, this resolution provides guidance to authorizing committees to report repeal legislation to their budget committee by January 27th of this year, and sets aside reserve funds to support replacement health reform legislation at a later date. Basically, this amounts to initiating the process of repeal, without specifying the details of replacement, or “repeal and delay.” In other words, immediately repeal as much of Obamacare as possible, but delay the effective date of those repeals through at least 2019, buying Republicans time to come up with a replacement plan.

The Risk of Repeal and Delay

This repeal and delay strategy is a risky proposition. Last night, Senate Minority Leader Chuck Schumer (D-NY) called Republicans out, “Bull – they have nothing to replace it with…we will tell America that they’re replacing affordable care with chaos. And once the chaos starts hitting the fan, I don’t know what they’re gonna to do.” Provider groups are worried about chaos as well. Yesterday, the American Medical Association (AMA) called on Republicans in Congress to lay out their plans for replacement before moving forward with repeal. In this letter, James Madara, CEO of the AMA stated,

We believe that before any action is taken through reconciliation or other means that would potentially alter coverage, policymakers should lay out for the American people, in reasonable detail, what will replace current policies. Patients and other stakeholders should be able to clearly compare current policy to new proposals so they can make informed decisions about whether it represents a step forward in the ongoing process of health reform.

Hospital executives have expressed similar concerns. There is also uncertainty about what will happen to insurance markets while waiting for Obamacare provisions to sunset, without knowing what is on the horizon.

Sizing Up the Claims Against Obamacare

While Republicans are busy pointing out all of the problems with Obamacare, they are also rightly concerned about potential backlash from taking health care coverage away from millions of Americans. For instance, Senator Enzi’s press release about the resolution claimed that because of Obamacare, many families across the United States have “fewer choices and less access to care than they had before” (emphasis added).

On Choice: Obamacare is certainly not perfect, and there are ways to improve the system. For example, choice has decreased, as some private health insurance companies have decided not to offer plans in the health insurance exchanges anymore. Furthermore, rising premiums are real, in part because despite the individual mandate, healthier people have enrolled at lower rates than expected—resulting in higher costs for everyone else. (This phenomenon is perhaps best explained as a football team at a buffet). Still, these problems point to the need for thoughtful improvements to the ACA, or even the revival of a discussion about the public option, not a full repeal.

On Access: Access to coverage has increased significantly as a result of the ACA, primarily through provisions such as the Medicaid expansion and premium tax credits toward the purchase of health insurance for people with incomes between 100 and 400% of the federal poverty level (FPL). Estimates suggest that at least 20 million people have gained insurance coverage as a result of the ACA, reducing the rate of uninsured among non-elderly adults to 12.7 percent in 2016 (down from nearly 20 percent in 2013). And while health insurance coverage is not synonymous with access to care, findings from the Commonwealth Fund’s Affordable Care Act Tracking Survey in early 2016 suggest that people are receiving needed care with this coverage. Specifically:

  • 7 out of 10 adults with a marketplace plan or new Medicaid coverage said that have used that coverage to visit a provider or fill a prescription.
  • 6 out of 10 adults in this group reported that they could not have accessed or afforded this care prior to enrolling in this new coverage.
  • More than 8 out of 10 adults with a marketplace plan or new Medicaid coverage said their ability to get care that they need has improved or stayed the same since obtaining coverage.

As a result of the ACA, access is better. Period.

Uncertainty Ahead

So, will Republicans be willing to take health care coverage away from millions of Americans? It sounds like they don’t quite know yet. During a visit to Capitol Hill this morning, Vice President Elect Mike Pence cautioned that the transition to a new plan needs to ensure that it “doesn’t work a hardship on American families who have gained insurance through this program.” Meanwhile, in another closed door meeting on Capitol Hill President Obama urged Democrats not to “rescue” Republicans by supporting replacement proposals. At the same time, President Elect Trump was tweeting about Obamacare, warning, “Republicans must be careful in that the Dems own the failed Obamacare disaster, with its poor coverage and massive premium increases…” This likely refers to the tightrope that Republicans are walking, with a promise for repeal, a lack of a ready-to-go replacement plan, and health care coverage for millions of Americans hanging in the balance.

This is Just the Beginning

ACA repeal watch has officially started—hopefully you will come along for the ride. In addition to tracking the fate of the ACA, keep a look out for more explanatory blog posts that take a deeper dive into elements of the health care system related to the ACA and replacement proposals. Welcome to 2017.