Trump Presidency Promise: Repeal Obamacare in 2017
One of the main platforms President-elect Donald Trump ran on during the election was healthcare reform. Repeal Obamacare. “Great health care at lower costs.” That’s what we’ve heard over and over again. Since the election, Trump seems to be singing a different tune now, saying there are parts of Obamacare he plans to keep.
Which parts though? Senate Majority leader Mitch McConnell asserts, “The Obamacare repeal resolution will be the first item up in the new year.” With a lot of determination coming from the GOP, we haven’t really seen any indication of what a new plan might look like and how it will affect healthcare for millions of Americans.
How Do They Plan to Do It?
Repeal and delay through budget reconciliation. The GOP has been very public about their plans to repeal and delay the Affordable Care Act’s funding using this process. How does it work, though?
Budget reconciliation allows for expedited consideration of certain tax, spending, and debt limit legislation. The Senate could introduce new legislation regarding these tax, spending, and debt limits that relate to Obamacare without being subject to filibuster by the Democrats and, because the GOP controls the Senate, the new legislation would pass by a majority vote.
In other words, if it impacts federal spending, the GOP can pick and choose which parts of Obamacare they don’t like and thus block the spending. This is their way of repealing the parts they hate without throwing the whole thing out altogether.
It’s not necessarily that simple, though. Budget reconciliation requires forming a budget resolution, which is typically a lengthy back-and-forth process that can take months to come up with a final product. Nonetheless, if the budget reconciliation is accomplished, money would likely continue to flow through for Obamacare for at least a few years, giving the GOP time to fill in the holes and craft a new system.
Will It Work?
A promise to reduce healthcare costs sounds great, but how is this going to be accomplished? At the end of the day, it doesn’t really matter how Congress plans to repeal the Affordable Care Act. What matters is how it’s going to impact the nation. Cost is important, but so is quality.
According to a report from the Urban Institute, under this reconciliation process, the change could eliminate Medicaid expansion, eliminate the federal financial assistance for Marketplace coverage, and eliminate the individual and employer mandates. The Urban Institute predicts this process will cause 4 million people to lose insurance in the first year alone and, by 2019, the already high number of 28.9 million Americans without insurance will increase to 58.7 million. This is a 103% increase. This is just the tip of the iceberg and will only get worse if Congress doesn’t come up with a replacement quickly.
Since it doesn’t appear the GOP has any agreed upon alternative plans for how they’re going to better Obamacare, the major concern floating around with this repeal and delay plan is that it will create a frenzy within the insurance market during the transition period.
Although a direct link is widely debated, some believe those with insurance are healthier and less likely to die prematurely. Does this mean less healthcare creates an unhealthier America? Will this create a spike in insurance rates? It’s definitely a likely outcome that could mean Americans won’t be looking at lower health care costs anytime soon.
Obama Signs New Law That May Make It Harder to Repeal
President Obama recently signed the 21st Century Cures Act into law, which many are regarding as a last ditch effort to sway the opinions of some proponents in the hopes of keeping Obamacare in place.
Certainly not the primary target of the Act, as the majority of the bill is focused on medical research funding, improvements to mental health and substance abuse care, streamlined regulations for drugs and medical devices, and some changes to Medicare and Medicaid payments, but there’s a small portion of the bill that focuses on a positive change for small businesses.
The relevant portion of the Act essentially allows small businesses to use Health Reimbursement Arrangements (HRA) to compensate employees who buy their own insurance. Companies with fewer than 50 employees can reimburse those employees for purchasing individual health insurance as if the company were directly paying the premiums on a group health policy. Employees won’t have to pay taxes on the company’s premium contribution and the company won’t owe any payroll taxes on the reimbursements either.