Commentary

It'll Take at Least Two Years to Repeal and Replace Obamacare


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The recent election was supposed to mark the beginning of the end for the Affordable Care Act, to the delight of millions now struggling to find affordable health insurance with reasonable deductibles and co-pays—a product that doesn’t appear to exist.

Or will ObamaCare survive? President-elect Donald Trump has promised that either ObamaCare will be amended, or repealed and replaced.

Amended? This came after a meeting with President Barack Obama, during which the president encouraged his successor to ensure that people with preexisting conditions would continue to receive coverage and children can stay on their parents’ plans until age 26.

This should be a no-brainer, since the two provisions already were included in the Better Way health reform plan outlined by House Speaker Paul Ryan before the election.

Nevertheless, the challenge of delivering on a six-year old GOP promise—to repeal and replace ObamaCare—is causing some Republican politicians to manage expectations downward significantly.

Sen. Lamar Alexander (R-TN.), chairman of the Senate Health, Education, Labor & Pensions (HELP) Committee, for example, says it will take several years to transition out of ObamaCare to a patient-centered health system.

Alexander has a point. One reason ObamaCare is such a mess is that Democrats had a 60-seat Senate majority when the plan was being put together and rammed it through the Senate with virtually no input from Republicans.

Republicans won’t have such a supermajority. And they’re not likely to have the support of very many Democrats either. So they’ll have to use the budget “reconciliation” process to move ahead with their repeal and replace plan.

This is the solution recommended by Georgia Rep. Tom Price, a physician and chairman of the House Budget Committee, who was recently tabbed by Trump to serve as Secretary of Health & Human Services (HHS).

Repealing ObamaCare through the budget reconciliation process would prevent the Democratic minority from blocking the effort through a Senate filibuster. But it wouldn’t do away with ObamaCare entirely. According to most experts, it can be used to repeal ObamaCare’s tax provisions, and the subsidy and other provisions affecting federal spending, but it would leave tens of thousands of pages of ObamaCare rules and regulations intact.

Reconciliation already has had a trial run, in January 2016, but President Obama vetoed the Republicans repeal bill. When the new Congress agrees on a budget resolution, a similar bill could move quickly to President-elect Trump’s desk, without a veto threat.

To be sure, the most harmful rules are embedded in law. For example the law limits the premiums for 64-year-olds to three times the premiums for 21-year-olds. In a normal market the difference might be five or six times greater. This rule artificially increases premiums for young people.

Nevertheless, there is even some room to tinker with this by giving states flexibility in how they define age bands within the 21-to 64-year-old population. Another provision, section 1332, allows the HHS Secretary to give states even more flexibility in plan design.

Adopting this approach would allow the new administration to unravel ObamaCare’s regulatory web, fulfilling Trump’s promise of repealing two regulations for each one his administration produces. This could most of the administration’s first two years. Further reforms could be pursued following the 2018 mid-term elections, after which the Republicans are likely to have a larger Senate majority.

The groundwork has been laid to repeal ObamaCare and replace it with patient-centered health reform. Though it won’t happen overnight, Congress and the White House must see that it happens.

Tom Price, an orthopedic surgeon and former Medical Director of the Orthopedic Clinic at Grady Memorial Hospital in Atlanta, will be critical to that effort.


John R. Graham is a former Senior Fellow at the Independent Institute.