Stanford Health Policy faculty members Michelle Mello, David Studdert and Laurence Baker discuss repealing the Affordable Care Act (ACA) and how it could affect health coverage in the United States.
Now that the United States has elected a Republican president and Congress, what is likely to happen to the Affordable Care Act (ACA)?
Michelle Mello and David Studdert: Exactly what will happen is unclear at this point, particularly since President-elect Trump’s own position on the ACA seems to be evolving by the day. In an interview on Nov. 11, he said he is interested in keeping some of the key provisions of the law, such as a ban on insurers discriminating on the basis of pre-existing conditions and provisions allowing young people to stay on their parents’ plans until age 26. But his opposition to other provisions, including the cornerstone provision requiring individuals to purchase insurance coverage, likely will remain. At this point, about the only thing one can say with certainty is that substantial change is coming.
Is the ACA likely to be repealed fully, or will some components be spared?
Mello/Studdert: On the campaign trail, President-elect Trump said repeatedly that repealing Obamacare is a priority. House Republicans have said the same. A complete repeal seems unlikely in the short term, though. There’s more opposition to some provisions of the act than to others, and millions of Americans now depend on health insurance coverage made available through the ACA. More likely, Republicans will target certain key elements – the individual mandate, minimum essential coverage rules, the subsidies available to low-income purchasers of health insurance and federal financing arrangements for the Medicaid program. Eliminating all of these features would spell the end of Obamacare as we know it. Eliminating any one of them would seriously threaten its viability, because the ACA’s strategy depends on having all major legs of the stool in place.
What is the legal process for repeal, and what issues would likely arise?
Mello/Studdert: Although Republicans will have a majority in the House and Senate, they fall just short of a filibuster-proof majority (60 votes) in the Senate. This is why a repeal is not likely to occur – at least not straight away – unless several Senate Democrats break ranks in the vote. A more likely scenario is that Republicans will use the budget reconciliation process to make the kind of changes mentioned above. Bills of this kind require only a simple 51-vote majority in the Senate, which they have.
Laurence Baker: Republicans have substantial ability to remove parts of the law under budget reconciliation. They can make changes to aspects of the ACA that involve financial in- and outflows to the federal government, but not other things. Reconciliation thus allows them to make changes to the major things like the mandate – because it involves a tax penalty – the subsidies and Medicaid. But they would not be easily able to repeal things like the exchange structures, guaranteed offers of insurance regardless of health status and other provisions. Guaranteed issue would be a real problem for insurance companies without the mandate, so repealing one but not the other threatens significant disruptions in insurance markets.
Most of the discussions thus far have focused on efforts to repeal the ACA’s expanding coverage aspects, but there are other aspects of the ACA that could be addressed. The ACA set up and funds the Capability Maturity Model Integration (CMMI) and Patient-Centered Outcomes Research Institute (PCORI), two organizations that have not been discussed much in the repeal debates and which are seen by some Republicans in a more positive light. The ACA also makes changes to Medicare payments. It seems likely that repeal debates will focus more on coverage and less on these things, but it’s hard to tell at this point.
How will this affect Americans who current receive subsidies for health insurance?
Mello/Studdert: Elimination of the subsidies would have a major effect on the ACA’s core objective to cover the uninsured. By 2017, about 25 million people will have purchased their health insurance on the exchanges set up under the ACA, and about three-quarters of them will receive subsidies to help make premiums affordable. If the subsidies disappear, we should expect that health insurance will become unaffordable for many of these people or no longer look like a good deal. The tax credits and health savings accounts currently being discussed won’t make up for what is lost, and many people who currently have insurance can be expected to drop it. Elimination of the individual mandate will further open the way for this to happen.
Baker: The reality of the health care system is that there are not easily available alternatives to the ACA that would protect coverage and be palatable to broad groups of Republicans. Single-payer, or national health insurance, is a non-starter, so they’d be left with market-oriented reforms, and there are not obvious ways to pursue those without at least some core features of the ACA. Most of the proposals recently put forward for a replacement, including those highlighted by the Trump campaign, like cross-state competition, tax credits for insurance purchase and block granting Medicaid, would not really offer coverage to a large number of the people who would lose it under repeal. So a key question is what alternatives the Republicans come up with. In a similar way, the ACA and its provisions have become increasingly woven into our insurance system. Insurers and employers, among others, have made decisions and investments incorporating the ACA. Undoing those threatens disruptions and political challenges.
Michelle Mello is a professor of law and of health research and policy.
David Studdert is a professor of law and of medicine.
Laurence Baker is a professor of health research and policy, chair of the Department of Health Research and Policy in the School of Medicine and a senior fellow at the Stanford Institute for Economic Policy Research.
Stanford Health Policy comprises research groups within the Freeman Spogli Institute for International Studies (FSI) and the Stanford University School of Medicine (SOM). The affiliation with both FSI and SOM provides access to a wide range of researchers who span the social sciences, engineering and medicine – from pediatrics to geriatrics, law, economics and decision science.
