It’s becoming clear here in DC that legislative repeal of ObamaCare may actually not happen. As many as nine GOP Senators are casting doubt on “repeal and replace” and may insist on both concurrently; only three defections are needed for repeal to be blocked. This raises the question: what could Trump do to ObamaCare himself, day one, without Congress? If you care about the coverage of 30 to 52 million Americans, the answers are scary.
Repeal now seems more likely to occur through deregulation and Executive Branch action. “We’re going to use every tool at our disposal through legislation, through regulation, to bring replace concurrent along with repeal to save people from this mess,” Speaker Paul Ryan told reporters in the Capitol today.
First, Trump could effectuate Affordable Care Act (ACA) repeal simply by abandoning Obama’s appeal of House v. Burwell. In that case, the House sued and won in District Court on the claim the Obama administration had unconstitutionally paid for the cost sharing subsidies without Congressional authority. Abandoning the appeal would lead to insurers being held liable for over $8 billion in subsidies ‒ effectively crushing the individual health insurance market and many of the plans in it.
Trump could strike Executive Orders on the Obama Administration’s practice of paying out reinsurance funds to insurers first. Under the ACA, the Department of Health and Human Services (HHS) is supposed to pay the Treasury first but hasn’t been doing so due to lack of funds. The Government Accountability Office (GAO) stated HHS lacks the authority to ignore this requirement even if they don’t collect the funds specified in the statute. This would also take billions away from insurers and put it into Treasury funds. Keep in mind the Administration is also being sued by insurers for risk corridor payments.
Trump could issue a moratorium on any proposed regulations – this is pretty typical and the reason why HHS sped up their finalization of the Notice of Benefit and Payment Parameters (NBPP) this year, which usually comes out at the end of January. What is interesting in this case is the Medicare Access and CHIP Reauthorization Act (MACRA). Although finalized, HHS left on the table quite a bit of leftover work and anticipated subregulatory guidance. Incoming HHS Secretary Rep. Tom Price (R-NC) is naturally very vocal about reducing the regulatory burden on providers. We can also expect any work in the CMS Innovation Center to come to a screeching halt.
Trump could damage the source of most ObamaCare coverage by disrupting Medicaid waivers that don’t embrace “conservative principles,” effectively circumventing the law. Medicaid waivers could be turned on their ears and be used as a vehicle to implement draconian block grants ‒ fixed sums of per capita funds expected to cut $1 trillion from Medicaid over a decade ‒ without Congressional authorization. Discussions we’ve had with Congressional and CMS staff indicate this is a high priority area for the GOP right now and could be an almost day one action.
Trump could shatter the definition of Essential Health Benefits (EHBs) through executive action, for example, by directing the Health Resources and Services Administration to remove contraceptive funds from the list, ending the question of the religious exemption. EHBs were defined in regulation based on recommendations from the Institute of Medicine, which could easily be undone day one.
A report out today from Kaiser showed Republican Congressional districts had more ObamaCare enrollment than Democratic districts. The will of those voters is about to be tested on January 20.
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