“Repair” the Affordable Care Act: Are Republicans Changing Their Tune?

When Congress got to work a month ago today, the strategy of Republican leadership was to repeal the Affordable Care Act (ACA) now, and replace it down the line. As we have discussed, this repeal and delay strategy has received a lot of push back, due to concerns around the uncertainty that would ensue for patients, providers, and health insurance markets. However, the tone of the debate may be changing. As a result of the leaked recordings from the Republican retreat in Philadelphia last week, we have some new insights into Republican concerns about their publicly stated health reform strategy. Needless to say, repeal and replace appears to be on more precarious footing. In these recordings, Senator Lamar Alexander (R-TN), Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee says, “The word ‘repair’ is a lot better than the word ‘repeal.’ . . . Saying we’re going to repair the damage is more accurate.” Perhaps this is why we are starting to hear the framing of “repair” be embedded into Republican talking points, albeit with different spins. It remains to be seen whether repair is: (1) the Republican spin to save face and make some changes to Obamacare because they may not be able to follow through with a full repeal, or (2) whether it is simply a rebranding of the same old repeal strategy, but with softer and perhaps more appealing tones.

How Did We Get to Repair?

Over the past month, a set of rules have emerged making it nearly impossible for Republicans to fulfill the promise of repealing Obamacare as originally planned.

The fate of the 20 million Americans newly insured as a result of the ACA is ever present in health reform debates. President Trump has stated that the replacement plan will provide “insurance for everybody.” However, Kellyanne Conway soon walked that back, “Well, for the 20 million who rely upon the Affordable Care Act in some form, they will not be without coverage during this transition time” [emphasis added]. Add to this, according to a recent poll, public support for the ACA is higher than it has ever been. We have seen demonstrations from coast to coast, and in between (e.g., Indiana, Arizona) and large gatherings outside the offices of elected officials across the country (e.g., Pennsylvania, Missouri, California) urging them not to take away their health care. Republicans are under major pressure to comply with Rule Number 1: Nobody will lose coverage under a replacement proposal.

At AcademyHealth’s National Health Policy Conference earlier this week, Senator Tim Kaine (D-VA) vividly described how the Republican plan for repeal and delay is like “jumping off a cliff and figuring out how to land later.” In opposition to repeal and delay, providers, insurance companies, and many other stakeholders have all cautioned against repealing without a simultaneous replacement proposal. Rule Number 2: Any replacement plan must come at the same time as repeal.

Given all of this potential uncertainty, Democrats have invoked the Pottery Barn Rule—you break it you own it. In other words, whatever the Republicans do to the ACA, they will own the consequences. Now, thanks to the leaked recordings from the retreat last week, we know that Republicans are well aware of this predicament. As Representative Tom McClintock (R-CA) explained, “We’d better be sure that we’re prepared to live with the market we’ve created…That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away.” What do elected officials care about more than anything? Getting re-elected. Rule Number 3: Whatever happens next, Republicans own it.

We have talked about the limitations of using the budget reconciliation process to repeal certain parts of the ACA. To pass a replacement bill, 60 votes (or 8 Democrats) are needed. Democrats are reporting they are not going to rescue Republicans if they move forward with repeal. Senator Tim Kaine echoed this again at AcademyHealth, suggesting the Democrats are happy to have a real conversation about how to improve, repair, and reform identified issues with the current health care system, but “we are not going to bail you out” (see Rule Number 3). Rule Number 4: Republicans actually need Democrats.  

So, What Happens Next?

The leaked conversations from the Republican retreat last week solidified what we all had suspected, namely that there is no agreement on replacement. Still, we are starting to see different proposals emerge. Let’s take a quick look at two of them.

1. The American Health Care Reform Act of 2017 was put forth by the Republican Study Committee, a conservative group of Representatives in the House.
   1. Fully repeals the ACA, effective January 1, 2018.
   2. Replaces the tax preference for employer-sponsored insurance with a standard tax deduction for anyone who chooses to purchase health insurance.
   3. Expands access to health savings accounts (HSAs).
   4. Provides federal support for state high risk pools ($25 billion for 10 years) to cover people with pre-existing conditions with premiums capped at 200% of the state average.
2. The Patient Freedom Act of 2017, also known as the Cassidy-Collins Plan, introduced by Senator Bill Cassidy (R-LA) and Senator Susan Collins (R-ME), includes three choices for states. These choices are characterized in Senator Cassidy’s own words, as described to attendees of the National Health Policy Conference.
   1. “The Better Choice” – States create their own health insurance expansion using about 95 percent of the money given to them through the ACA with newly specified criteria.
   2. “The heck with you Washington” – States opt out of federal assistance entirely and create their own system as they please.
   3. “Stick it to your citizens” – States keep Obamacare as is, but the mandates would be implemented at the state level.

The first proposal will fail rule number 1, and land the consequences squarely at the feet of Republicans seeking re-election (rule number 3). However, the second proposal is a bit more interesting. On the surface, it seems that the Cassidy-Collins Plan may be an attempt to find a middle ground and potentially appease some red and blue state governors concerned about the implications of repeal. Given the choices involved, it is not exactly clear how coverage would fare (rule number 1). Regardless, it effectively pushes any consequences of coverage decisions to the states, since they would be on the hook for choosing their coverage options. Still, the Cassidy-Collins Plan has a political problem. It actually enables states to keep a lot of the ACA in place (i.e., not repeal). At the same time, it may not be as optimistic as repair because it does not enable states to improve upon Obamacare provisions within that third option. Early indications suggest Democrats are not on board (so much for rule number 4).

Again, Senator Kaine perfectly captured the prevailing paradoxical sentiment present in the debate over the fate of the ACA. As the American people realize how much there is to lose with the ACA, they are making their voices known. He characterized this perspective, “We may hate Obamacare, but we’re not going backwards.” Republicans, it’s your turn. You break it, you own it.

Author’s Note: Quotes from Senator Kaine and Senator Cassidy are drawn from the author’s attendance at the AcademyHealth National Health Policy Conference in Washington, D.C., January 30-31, 2017.