Trump, GOP Have Mandate to Dismantle Obamacare, but What's Next Is Hard to Tell

Repealing Obamacare will be the Trump administration's first priority, Vice President-elect Mike Pence told CBS's John Dickerson on Sunday. It's likely that the process of rolling back the legislation and, if desired, replacing won't be something that can be done right away.

Republicans have for years campaigned on the promise of tossing out the Affordable Care Act, and when Donald Trump is inaugurated on January 20, they will have their chance. There is little doubt GOP lawmakers will move to dismantle President Obama's signature 2010 healthcare law, but the "repeal and replace" mantra that party has embraced will require complex orchestration.

"If Republicans have a mandate to do anything, it is a mandate to repeal Obamacare," said Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank based in Washington, D.C. 

The GOP has railed against ACA since its passage, angered by the Democrats' decision to push the legislation without any bipartisan support. Many in the party also see it as a step towards government-run healthcare in the United States, which they reject.

A complete repeal is unlikely, given the GOP's Senate numbers. Republicans will hold only a narrow majority (either 51-49 or 52-48, depending on how Louisiana's Senate race shakes out). A repeal would require 60 votes, something Democrats are likely unwilling to give.

"We're not going to repeal or help him repeal Obamacare," incoming Senate Minority Leader Chuck Schumer told NBC's Chuck Todd over the weekend.

Barring a maneuver by Senate Republicans to eliminate the filibuster to get around the 60-vote cap, the GOP's next-best option will be reconciliation, a fast-track procedure created under the 1974 Budget Act that requires only a simple majority to pass. While it wouldn't allow them to eliminate the legislation entirely, it would give them leeway to dismantle major portions of it, including subsidies, Medicaid expansion, penalties and preventative care funding, among other items.

Congressional Republicans passed such a reconciliation measure, H.R.3762, in 2015, but President Obama vetoed it. It will provide a blueprint for Congress in 2017 to push forward something similar that Trump will likely be amenable to signing.

"It's already been proofed. It's already been tested and ready to go," said Roger Feldman, professor of health policy and management at the University of Minnesota. The Congressional Budget Committee scored the 2015 reconciliation, determining it would decrease federal deficits by about $474 billion over a decade.

While Republicans could conceivably act very quickly with regard to the ACA, experts say it will likely take weeks or months to craft a reconciliation bill.

"It's not a slam dunk at all," said Bill Hoagland, senior vice president at the Bipartisan Policy Center and former vice president of public policy for CIGNA (CI) . "It's not going to be as quick as people think."

What Trump can do immediately and without Congress' help is roll back the healthcare regulations that came out of the Obama administration. The "secretary shall" language in the ACA, which leaves much up to the discretion of the Secretary of Health and Human Services, gives the upcoming Trump administration room to maneuver. 

"The first thing he can do without Congressional action is to eliminate, pull back and rescind those regulations that came out of the current administration," said Hoagland, who spent 25 years as a Senate budget staffer. For example, he could roll back exemptions for unions on paying into reinsurance programs or remove extensions given on non-compliant health plans. 

There is another and perhaps more prevalent reason Trump and Congressional Republicans might take their time in dismantling the ACA: they don't have an agreed-upon plan to replace it.

"My sense is it's not so much the repealing aspect that they're concerned about in terms of time but what to replace it with," said Merrill Matthews, resident scholar at public policy think tank the Institute for Policy Innovation.

There are currently 20 million Americans using Obamacare, and taking healthcare from all of them without offering an alternative that would suit at least some of them may be politically risky. Parts of the law's provisions, like guaranteed coverage for pre-existing conditions and the ability for young adults to remain on their parents' insurance plans until age 26, are highly popular. Moreover, some say repealing without a replacement could spur an individual insurance market collapse.

"They're not going to walk off that particular political cliff without any kind of safety net," said Richard Arenberg, adjunct lecturer in international and public affairs at Brown University.

To be sure, Trump has, time and time again, proven his willingness to take chances other politicians have not. He has gone against the traditional Republican grain on issues like trade and entitlements and has made declarations that would in many circumstances kill careers -- proposing a ban on Muslim immigration, maligning Mexican immigrants, attacking a Gold Star family, etc. 

In other words, he and Congressional Republicans could conceivably move to dismantle Obamacare and offer no replacement. But the GOP hasn't indicated that's what it is planning, nor has Trump. In his first televised interview after being elected president with "60 Minutes," he said he would repeal and replace Obamacare "simultaneously," and while campaigning, he promised to "take care of everybody."

I am going to repeal and replace ObamaCare. We will have MUCH less expensive and MUCH better healthcare. With Hillary, costs will triple!

— Donald J. Trump (@realDonaldTrump) November 2, 2016

"There's no question in my mind there will be some form of a replacement," said Hoagland, though he cautioned it might not go as far as Obamacare or cover as many people.

"Everyone who says they want to repeal Obamacare wants to replace it with something," said Cannon. 

The most completely-designed replacement proposal thus far has been the Patient Choice, Affordability, Responsibility and Empowerment Act (the Patient CARE Act). House Speaker Paul Ryan's "A Better Way" plan sketches out a number of potential ideas, including refundable tax credits, Medicaid block grants and new pooling mechanisms for small businesses and individuals. Virginia Representative Dave Brat and Arizona Senator Jeff Flake this year introduced the Health Savings Account Expansion Act, which could provide guidance.

Elements of those plans can be found on Trump's transition website, as well as enabling Americans to be able to purchase insurance across state lines. (As the president-elect often said while campaigning, "get rid of the lines.") Proponents of such a measure say it would increase competition, while detractors say the way insurance companies rely on local networks of physicians and pharmacies render it relatively ineffective.

"I don't think it can hurt," said Feldman, noting it may serve as a way around some negative aspects of state regulation. "I'm in favor of it, but I think it is probably...not as good an idea as I once thought it was."

Trump's transition team said on a call with press on Tuesday that the president-elect would meet with Seema Verma, founder and CEO of Indiana-based health consultancy group SVC Inc.. Verma helped craft the Healthy Indiana Plan (HIP) and HIP 2.0 under Indiana Governors Mitch Daniels and Pence. The program expands Medicaid for low-income Indiana residents while at the same time requiring them to share some of the costs through small health savings accounts and co-pays.

"The goal of this plan was to come up with something like a health savings account for the uninsured, a consumer-driven health plan," said Srikant Devaraj, research economist and research assistant professor at the Center for Business and Economic Research at Ball State University.

The transition team declined to go into detail about what would be discussed at the meeting, but one could perhaps infer one item that could be on the menu is dealing with Medicaid at the state level, where Verma boasts expertise. In testimony before Congress in 2013, she urged lawmakers to "reform Medicaid to assure long-term fiscal sustainability" and called for "a fundamental paradigm shift in management...to aligning incentives for states, providers and recipients to improve outcomes."

Depending on how the final replacement is shaped, if and when it takes place, young, healthy individuals may see their healthcare costs fall, while older individuals not yet eligible for Medicare may see the cost of plans offered to them rise.

"It will leave it to you as an individual to decide what kind of plan you want, what you want in your plan and how much you want to pay for the plan," said Hoagland. 

Americans will no longer be required to buy insurance or face a penalty for deciding not to, as they do under Obamacare.

Trump has indicated there are some portions of the ACA he hopes to retain, including the aforementioned pre-existing conditions requirement and coverage on parents' plans until age 26. 

Feldman warned that leaving those intact while otherwise dismantling the rest of the law without a replacement could potentially have disastrous effects. "If you kept those in place without a mandate to buy coverage and without subsidies, the individual market would collapse, and by that I mean the whole individual market, not just Obamacare," he said.

In such an event, Americans would only be able to get coverage through their employers. 

The 2015 reconciliation bill came with a two-year delay in the actual dismantling, and Congressional Republicans could go with such a mechanism again, thus giving themselves time to come up with a replacement. If they fail to come to a consensus within that period, they could simply continue to put it off, essentially performing a "repeal and delay" and kicking the can down the road indefinitely.

But they will also face the responsibility of what to next.

"It's really a great example of a 'you broke it, you own it' story," said Feldman. "If they break it, they own the mess that's going to happen after that."

If you liked this article you might like

Healthcare Management Stocks Look Too Pricey for Activists

The Stock That Crashed 25% Overnight Has a Lesson to Teach Us: Market Recon