What Needs to Happen for an ACA Repeal to Take Place?

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The Affordable Care Act (ACA) can’t be eliminated quickly while millions of Americans are insured under its vast array of provisions. Open enrollment is nearly completed for 2017, and the exchange is estimated to insure 11.4 million this coming year. Trump wants a repeal but has since indicated he would retain parts of the legislation, such as continuing to cover those with pre-existing conditions. Let’s look at what could really take place.

On day one, Trump could limit funding for promotion of the 2017 open enrollment period in its final days up to January 31. This could slow down enrollment since a lot of people wait until the last minute to sign up for coverage. Halting all outreach efforts and eliminating enrollment assistance funds for the Obamacare marketplaces could reduce the number of enrollees right away.

Those currently enrolled in the health care market will need time to find alternative insurance plans. Many will be looking for something to replace the cost assistance they came to depend on while hoping for affordable solutions that enable them to continue coverage in a new replacement plan. Marketplaces won’t close immediately, and some Republicans are already pushing a “repeal and delay” tactic that could create a health insurance limbo for millions. The insurance industry will need to adjust slowly as well to avoid unnecessary economic turmoil.

Legislation

Congressional Republicans have tried to repeal Obamacare many times in the past. A reconciliation bill could be the answer they’ve been looking for. Primary objectives include dismantling the mandate for insurance coverage for individuals and employees of small businesses, ending federal subsidies, reversing Medicaid expansion funding, and canceling all related tax provisions. When the last bill was presented for repeal by Republicans, it allowed for a two-year time frame that would now take until 2019 to accomplish and allow plenty of time for installing an acceptable replacement.

A reconciliation bill is subject to a majority vote in the House and a 60-vote threshold in the Senate. However, with 51 Republican seats, the chairman of the Senate Budget Committee will have sole authority to keep score of the votes in either direction as long as it affects the budget substantially and improves the deficit directly. The GOP Congress doesn’t see a problem with this based on numbers already published regarding the cost of Obamacare by the Congressional Budget Office (CBO).

Removing Support

Withdrawing federal support for certain aspects of Obamacare is another tactic that could help Republicans dismantle the ACA. Trump’s administration could easy stop enforcement of key provisions, like the one that requires all new health plans to cover minimum essential health benefits. Medicaid expansion may also be cut altogether since Trump and many Republicans want to scale back federal funding for Medicaid in the form of block grants. Limiting Medicaid funding would encourage state governments to begin looking for other ways to deliver low-income assistance for health plans. Furthermore, Trump may axe the individual mandate provision or make it a low priority, which might discourage young, healthy people from signing up for health insurance. Signups for this demographic have already been lower than needed, even with the mandate in place.

Drop Legal Action

By simply refusing to continue to appeal the current federal lawsuits against the ACA – like the 2016 House v. Burwell ruling that Obama administration’s reimbursement provisions to bail out insurance companies for benefits paid to low-income beneficiaries were unconstitutional – Trump could recover billions of dollars already given to insurance companies while crippling the marketplace since enrollees receiving subsidies would no longer be able to enroll.

Recently, the Obama administration has worked to settle lawsuits from insurance companies with unpaid claims on Obamacare’s risk corridor program. Trump can stop those as well, and insurance companies would have to reassess the plans they offer and how to pool the risk. The current administration also issued more than 1,000 exemptions and waivers to insurance companies without statutory authority, and President Trump could review or replace many of them.

Examining Insurance Companies

Health insurance companies have earned record profits since 2015. Trump has already spoken out against fraud in the government and in the health care industry, a stance he shares with the current administration and lawmakers behind the Affordable Care Act. Trump’s administration should focus on corruption and special interests tied to the industry if they want to continue to cut down on fraud and wasteful spending.

Some of the larger health insurance companies managed to increase profits by 80 percent while American incomes were stagnant. They did this not through the sale of additional health plans, but through contracting with states to provide Medicaid-managed care through Medicaid expansion and providing consulting services and administrative help to employers who needed to set up self-insurance for employees.

President Trump can end Obamacare steadily over time, and the exchanges won’t close immediately. The last thing Americans need in a new health care program is chaos. By addressing the primary question of how to offer affordable coverage while fixing problems within the health care system itself, Trump should be able to accomplish a successful transition to a replacement law over the next two years.

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