GOP Sets the Clock for Obamacare Repeal as Health Care Groups Hit the Panic Button
Policy + Politics

GOP Sets the Clock for Obamacare Repeal as Health Care Groups Hit the Panic Button

REUTERS/Nate Chute

The Senate will take up the repeal of the Affordable Care Act on the first day of the new Congress, Jan. 3, setting up an historic clash between President-elect Donald Trump and his GOP allies and Democrats and an array of health care industry groups over the future of the government health care system.

Senate Majority Leader Mitch McConnell (R-KY) announced Tuesday that the Obamacare repeal would be “the first item up in the new year,” after conferring with Vice President-elect Mike Pence and other GOP leaders.

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McConnell added that he would hope to garner some Democratic cooperation during the difficult process of replacing the controversial Obamacare law. But incoming Democratic leader Chuck Schumer of New York dismissed McConnell’s statement as wishful thinking.

Schumer also warned that the Republicans’ apparent strategy of repealing Obamacare but delaying the effective date for another two or three years until lawmakers can agree on a substitute “will cause huge calamity from one end of America to the other.”

Already, Republicans have begun squabbling among themselves about the efficacy of waiting as long as three years to craft a replacement for Obamacare as some, including Senate Majority Whip John Cornyn (R-TX) and Sen. Lamar Alexander (R-TN), have suggested.

The new leader of the far-right, 40-member House Freedom Caucus said in an interview with Politico this week that Obamacare should be repealed and replaced within the upcoming 115th Congress and that any attempt to stretch it out longer will “be met with major resistance” from his members.

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The leader, Rep. Mark Meadows (R-NC), even suggested that Obamacare could somehow be replaced relatively early next year, in time for enrollment for the 2018 insurance system.

But veterans of previous political battles over health care – including major players in the insurance, prescription drug and hospital industries – remember the extraordinarily hard bargaining that went into enactment of Obamacare, and are alarmed by the prospects of extended inaction by Congress.

The American Hospital Association wrote to Trump this week urging him and Congress not to repeal the ACA without having a replacement plan in hand. However, congressional Republicans have little choice but to plunge ahead in early January to finally fulfill their seven and a half year long vow to dismantle President Obama’s signature health care program. House and Senate Republicans pushed through Obamacare repeal legislation last January – with a two year delay in the effective date – using special budget reconciliation rules to overcome Democratic opposition in Congress.

Related: The Health Care Industry Is in a Panic Over Obamacare Repeal

Obama vetoed that legislation, but it will likely be resurrected early in January in order to get a bill to Trump to sign shortly after he is sworn in as president.

The AHA and the Federation of American Hospitals on Tuesday released a study showing that if the nation is left in limbo for two or more years while replacement legislation is negotiated, hospitals would incur hundreds of billions of dollars in losses in business and government reimbursements.

The report by the health care economics firm Dobson/DaVanzo calculated hospital financial losses of $165.8 billion between 2018 and 2026 after accounting for restoration of Medicaid cuts. The analysis also found that hospitals would suffer a loss of $289.5 billion of inflation-related adjustments to Medicare payments that would be knocked out by repealing the existing law.

“Losses of this magnitude cannot be sustained and will adversely impact patients’ access to care, decimate hospitals’ and health systems’ ability to provide services, weaken local economies that hospitals help sustain and grow, and result in massive job losses,” said AHA president and CEO Rick Pollack and Chip Kahn, the president and CEO of FAH, in a joint statement.

“Hospitals are often the largest employer in many communities, and more than half of a hospital’s budget is devoted to supporting the salaries and benefits of caregivers who provide 24/7 coverage, which cannot be replaced,” they said.

Related: GOP Cuts in Medicare May Be Next After Dismantling Obamacare

Meanwhile, major health insurers and their lobbyists have been in intense talks with GOP lawmakers and their staffs voicing concern about a possible meltdown in the market if more insurers like UnitedHealthCare, Aetna and Blue Cross-Blue Shield continue to pull out. Insurers reportedly are seeking assurances that Congress would preserve or even strengthen some of the existing provision, including risk payments to insurers that suffer major losses covering sicker-than-average Americans.

Karen Ignagni, CEO of Emblem Health and former head of America's Health Insurance Plans, a lobbying group, told Modern Healthcare that she was encouraged that the discussions were moving towards the question of “how you stabilize the market so there is continuity for 20 million people.” Ignagni stressed, however, that “it’s impossible to build rates for 2018 without knowing the details of the replacement architecture.”

It took President Obama and his Democratic congressional allies nearly two years to draft and enact the Affordable Care Act in 2010 and another four years before the law cleared legal hurdles and was implemented in every state and the District of Columbia.

Throughout much of that time, Senate and House Republicans plotted to undo the program that ultimately provided subsidized health care coverage to more than 20 million Americans and reduced the uninsured rate to an historic low of roughly 10 percent.

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Republicans denounced the program for its onerous mandates on businesses and individuals, its costly tax subsidies, its steadily rising premiums and out-of-pocket costs, technical online difficulties in applying for coverage and a raft of other problems. But the GOP failed dozens of times to repeal Obamacare, even after it took control of the House in the 2010 election and regained control of the Senate in 2014.

Now, in the wake of Trump’s victory over Democrat Hillary Clinton Nov. 8 and more strong showings by the Republicans in the House and Senate, the stage is set for the party to finally make good on its pledge.

“They are completely out of excuses,” said William Galston, a political scholar with the Brookings Institution and former policy adviser to President Bill Clinton. “They have to do it.”

But Norman Ornstein, another political expert with the American Enterprise Institute, wonders whether the GOP will finally make good on its repeal-and-replace promise or allow it to somehow slip away once again.

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While there are several GOP plans circulating on Capitol Hill, none has attracted substantial support as of yet. One devised by House Budget Committee Chair Tom Price (R-GA), who has been tapped by Trump to be the next secretary of Health and Human Services, would replace Obamacare with a handful of tax credits, savings incentives, state grants and other marketing incentives to encourage competition within the insurance industry. 

“Seven and a half years ago, then-Republican House Leader Eric Cantor said our Obamacare replacement plan is ‘weeks away.’ Some 375 weeks later, there is no plan,” Ornstein said in an email. “Republicans will probably delay repeal for another 100 or 150 weeks – and spend hundreds of billions to pay off hospitals and insurers along the way. Some plan!”