Behind the Headlines: The Policy and Politics of ACA Repeal and Replace

Seven years after the passage of the Affordable Care Act (ACA), the political barriers to a substantive national dialogue to advance sound health care policy are once again front and center.

After the contentious debate and passage of the American Health Care Act (AHCA) in the House in June, there have been at least three variations on “repeal and replace” floated or introduced in the Senate, all sponsored by Republicans. With 20 percent of America’s economy hanging in the balance, why after seven years of ceremonial ACA repeal votes and seven months of Republican legislative and executive leadership in Washington, DC, have Republicans failed to deliver on health care legislation?

While the ACA has its critics, some parts of the bill are growing in popularity. Overall, the ACA currently enjoys a 55 percent approval rating, the highest in the legislation’s history, making repeal more difficult than conservatives might have expected.

The Individual Market and Coverage Mandates

Among the most popular, and stickiest, provisions is the requirement that consumers with pre-existing conditions be offered coverage. The individual insurance mandate remains unpopular, but removing or weakening coverage mandates while requiring insurers to cover pre-existing conditions would undermine the stability of insurance markets through anticipated disproportionate enrollment by older, sicker consumers.

The individual market, while covering a comparatively small number of people, remains a focus of concern. This week marks the initial deadline for insurers to apply to participate in next year’s Affordable Care Act (ACA) health care exchanges. While recent analysis of the first quarter of 2017 appears to demonstrate that insurers in the individual market are showing improved profitability, applications from insurers to participate in 2018 are down 38 percent, with only 141 carriers applying to sell plans. This decline in interest could potentially leave 1,200 counties with only one insurance carrier in the individual market and 47 counties with no private options.

When Senate Republicans released their outline of ACA repeal and replace last month, known as the Better Care Reconciliation Act (BCRA), 10 Republicans opposed the proposal. Some argued that BCRA is “Obamacare Lite” and therefore not conservative enough. Others have objected to projected coverage reductions and Medicaid funding cuts, spurred in part by advocacy from Republican as well as Democratic governors who would be left to manage the fallout of nearly $800 billion less federal revenue for Medicaid.

Polling indicates that Republicans risk losing seats in the 2018 mid-term elections if they fail to pass a bill, having campaigned on a promise of ACA repeal for the past seven years. As many as 8 in 10 Republicans said in late June that they were supportive of ACA repeal.

But election results could be even more drastic if Republicans pass a bad bill simply for the purpose of passing something. The public overall gave BCRA just a 12 percent approval rating in late June polling.

Senate Pondering Revised BCRA

Last week, Republican leadership introduced a revised BCRA intended to satisfy the concerns of some moderates and some conservatives. The biggest changes include the addition of an amendment drafted by Sen. Ted Cruz and Sen. Mike Lee to allow insurers who offer full coverage on the exchange to also offer plans that don’t meet the ACA’s Essential Health Benefits. To appeal to moderates, such as Sen. Rob. Portman and Sen. Lisa Murkowski, the revised plan offers more funding for opioid addiction and reinstates certain Obamacare taxes to support $182 billion dollars for a State Stability and Innovation Fund. Illustrating the challenges with appeasing all factions of Senate Republican membership, conservative Sen. Rand Paul and moderate Sen. Susan Collins immediately announced their opposition to the revised legislation.

If the revised BCRA is to pass, it cannot lose more than two Republican votes without picking up support from Senate Democrats. As steep a hill as this is for Republicans to climb, they enjoy this “flexibility” in vote counting only because they are pursuing legislation through Budget Reconciliation, which cannot be filibustered and therefore needs only 51 votes, (including Vice President Pence for a tie-breaker) when other legislation requires 60 votes to avoid filibuster. Initial reactions to the revised BCRA did not suggest that 50 votes will yet be easily identified, as at least seven Republican senators quickly voiced objections or concerns. The closeness of the margin in the Senate was further illustrated by Senate Majority Leader Mitch McConnell’s decision over the weekend to delay the vote further due to Sen. John McCain’s absence from Washington, D.C., due to his health.

A Congressional Budget Office report on the revised BCRA is expected early this week and a vote may be scheduled as early as late next week. Sen. McConnell announced a delay of the Senate’s scheduled August recess until a bill is passed, a move that has been endorsed by President Trump. Holding the August recess hostage, a time when members like to raise money, might be Leader McConnell’s biggest carrot to build and maintain 50 votes for BCRA or for some variation on the current bill.

Keep an Eye on Executive Orders

Until the Senate can coalesce around one approach to ACA overhaul, health care markets should be prepared to experience continuing changes to the ACA through executive order. President Trump has already affected health policy by using executive orders to instruct federal agencies to waive or delay any provisions to the fullest extent allowed by law.

The net effect of executive action could be continued weakening of Obamacare exchanges, as ongoing uncertainty may continue to chill insurer interest in participation. As more congressional districts lose options in the individual market, members of Congress from both parties should become highly motivated to find a solution.

When, if at all, Congress will direct its attention on health care reform to issues of concern to The Alliance and its members, including transparency of cost and quality data, payment reform, consumer incentives, and overall health care cost containment, remains to be seen.

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Karen E. Timberlake is senior advisor at Michael Best Strategies LLC, where she focuses on health system innovation, shared value consulting and sustainable community development. Before joining Michael Best Strategies, Karen was the Director of the University of Wisconsin Population Health Institute and an Associate Professor at the UW School of Medicine and Public Health. She previously served as Secretary of the Wisconsin Department of Health Services and as Director of the Office of State Employment Relations.

Beth M. Cubriel is a director at Michael Best Strategies LLC, where she helps clients identify, design and implement strategic opportunities for business growth. Before joining Michael Best Strategies, Beth served as the executive director and organization director for the Republican Party of Texas. Prior to that, she was the organization director and state field director for Texans for U.S. Sen. John Comyn, and the legislative liaison and scheduling director for the office of the Texas attorney general.

Michael Best Strategies LLC, is a government affairs, public affairs and business consulting company working with The Alliance to provide insights and advocacy on health policy issues.

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Read more on the ACA Repeal

• “Still the Law of the Land? What a Court Ruling Means for the Future of the ACA”
• “The US Senate Considers Bipartisan Reform to ACA – Will it Prevail over Existing Talks of Republican-Supported Repeal?“
• “ACA Changes: What the AHCA Could Mean To Employers“

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