Will the ACA Get Trumped?

November 9, 2016

Authored by: Chris Rylands and Richard Arenburg

Now that the historic election between the two most unpopular candidates in recent memory has been called for Donald Trump, the questions (of which there are many) now facing the President-Elect and the rest of us are how a President Trump will govern.  One of his campaign promises (and a favorite Republican talking point) was the repeal of the Affordable Care Act and replacing it with something else.  (Its recent premium hikes were even cited by his campaign manager as a reason voters would choose him.)  So is that going to happen?

At this point, we cannot know for sure (and given the beating that prognosticators took this election cycle, we’re not sure we want to guess).  However, we can identify a few hurdles that might make it harder.

Republicans Need a Plan First.  One of the major hurdles is Republicans themselves have yet to completely agree on a coherent alternative.  Speaker Ryan released a thumbnail sketch of a proposal in June which looked more like “pick and choose” than “repeal and replace.”  However, it is often said the devil is in the details and that will certainly prove true here.

And Then They Have to Agree On It. The other challenge is getting enough Republican votes to get the plan through (and maybe some Democratic ones as well).  As of now, the GOP is still projected to retain majorities in both the House and Senate.  However, some races are still too close to call and, at least at the moment, it looks like their majorities will be smaller than they were coming out of the 2014 mid-term elections.  Particularly in the House, this means the Freedom Caucus could have a stronger voice and prevent consensus on a Republican plan.  And then there’s the question of whether Congress and the President can agree on any plan as well.

The Democrats Could Also Filibuster. Given that Democrats have been resistant to sweeping ACA changes proposed by Republicans, they could filibuster any legislation that makes its way to the Senate.  The Republicans, as of now, are projected only to have a simple majority in the Senate, and well less than the 60 votes needed to shut down a filibuster (which will be true even if the remaining races are all called their way).

There are other hurdles, but these are the obvious political ones that stand in the way of an ACA repeal and replace strategy.

That’s not to say, however, that Trump can do nothing.  He will appoint the heads of Treasury, Labor, and Health and Human Services and will likely get his appointees confirmed with relative ease, given Republican control of the Senate.  Those appointees will have the authority to write any remaining rules and a chance to rewrite existing rules.  That said, regulatory changes will be somewhat constrained by the existing statutory framework and concerns about insurance market disruption.  However, because Congress has largely given over the authority to interpret the laws to the Executive Branch, President Trump’s appointees may be able to take wider latitude than you would think to rewrite existing rules.

For now, plan sponsors should continue with compliance as they always have.  Nothing of significance is likely to change between now and President Trump’s inauguration in January.  Even after that, it will take some time (and some political maneuvering) for any huge changes to get implemented.

Update 11/10/16: Some readers have asked whether the Republicans could use the reconciliation process in the Senate (which bypasses the filibuster and only requires a simple majority of 51 Senators) to achieve their goals.  The good lawyerly answer is “yes and no.”  Reconciliation actions have to have a budgetary impact, so a full repeal and replacement is not really possible using that process.  However, Republicans could strip out several aspects of the act (like the play or pay employer mandate or the premium tax credits for individual insurance) through that process, effectively making the law unworkable.  It wouldn’t be a full repeal and replacement, but it might do enough damage to the law bring the possibility of a repeal and replacement to the table.