Category: Repeal and Replace

Donald Trump’s White House and congressional GOP leaders are coalescing around an agenda focused on slashing taxes and repealing Obamacare early next year, a blueprint that could potentially avoid an intraparty clash over infrastructure investment early in Trump’s presidency.

On Wednesday morning, incoming White House Chief of Staff Reince Priebus said that the GOP will concentrate on budgetary issues and health care reform in the first nine months of the year. That largely overlaps with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell’s focus on tax reform and Obamacare repeal and suggests the party will spend much of its energy and momentum on those two issues.

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Republicans are searching for a way to capture savings from repealing Obamacare in a piggybank they could later use to fund a replacement.

It’s not clear how or if such a maneuver would work, but if Republicans are successful, it could overcome the tricky political problem of paying for whatever health reform they try to put in the Affordable Care Act’s place.

The idea is to bankroll an Obamacare replacement that would start several years down the road with funds derived from repealing the law itself. A repeal bill Congress passed early this year, and President Obama vetoed, would have saved $516 billion over a decade, according to the Congressional Budget Office.

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It didn’t take long for Republican leadership in both houses of Congress to get over the shock of winning the election last month and start gaming out a repeal plan. The details remain under discussion, but House speaker Paul Ryan, Senate majority leader Mitch McConnell, and Vice President-elect Mike Pence (who is working closely with Ryan and McConnell on repeal) are already coalescing around a rough legislative framework. The plan might be summed up as: repeal, delay, replace. More precisely, Republicans plan to repeal most of the law, delay the implementation of most of that repeal for at least two years—and figure out what to replace it with in the interim.

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In new research for the Mercatus Center, I argue that one of the central aims for the ACA replacement should be to reduce government bias toward comprehensive insurance. Policymakers should instead focus on realigning incentives, removing government mandates and regulations, and directing government financial support to consumers instead of to insurers and providers. Doing so would lead consumers and providers to make decisions that lead to greater value from the massive amounts of money we spend each year on health care.

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In a new study by the Mercatus Center at George Mason University, Senior Research Fellow Brian Blase notes that successful, sustainable reform must simultaneously improve healthcare quality and put downward pressure on prices. The only surefire way to achieve this is by replacing the ACA’s government-centric approach with a consumer-centric approach that realigns incentives, unleashes market forces, and increases competition.

As Congress and the incoming Trump administration consider how to replace the ACA, they should aim to (1) reduce the government bias in favor of comprehensive insurance, (2) fundamentally reform Medicaid by better aligning incentives of states to be concerned about the value of spending, and (3) expand market-oriented reforms such as HSAs [Health Savings Accounts]. States should support these efforts by reducing insurance mandates and eliminating state rules that restrict competition and innovation.

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Senate Majority Leader Mitch McConnell on Monday indicated that Republicans won’t be putting forth their alternative to the Affordable Care Act before repealing parts of the health care law.

“We’re going to move forward first, first with the Obamacare replacement resolution,” the Kentucky Republican said at a Capitol Hill press conference. “What comes next is what comes next.”

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The current situation presents an opportunity to replace the Affordable Care Act with a more sustainable bipartisan law. But repeal must wait until a consensus is built around a replacement plan. Not doing so – starting with repeal and delay – threatens to destabilize the individual market and harm not only those who receive subsidies from the ACA, but also everyone who now purchases insurance in the individual market.

Estimates show that premiums would jump at least 20 percent and cause 4.3 million to lose health insurance as soon as next year, and that’s nothing compared to the damage that would be inflicted if a replacement plan subsequently failed to emerge. The current version of repeal through reconciliation, leaving in place the ACA’s insurance market reforms, would nearly destroy the individual market if its provisions took effect, causing 30 million people in total to lose health insurance, leaving more uninsured than before the ACA.

Fixing the ACA is important, but replacing it with a durable plan to make health coverage broadly affordable will take time and constructive bipartisan collaboration.

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Republican leaders in Congress have announced their intention to repeal key parts of Obamacare in early 2017, but delay the implementation of that repeal until 2019 or 2020. Some conservatives are complaining about this delay, arguing that the GOP should replace Obamacare immediately. But GOP leadership is right—and here’s why.

The fundamental problem is that in order to fully replace Obamacare, Republicans need to come up with a bipartisan plan that can attract the 60 votes necessary to overcome a Democratic filibuster.

Staff for House Republicans will be briefed Thursday afternoon on how to repeal Obamacare using special budget reconciliation rules that could allow them ditch big parts of the healthcare law next year.

House Budget Committee staffers will explain at a 1:30 p.m. meeting how the budget reconciliation process works, lay out how it can be used on the Affordable Care Act and answer questions, according to an invitation sent to Republicans on Monday.

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