What happens to Obamacare in 2017?

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Like many things, the answer to that question depends on the distribution of power after the November elections. 

Assuming the House stays in control of the Republicans, not much will change with that part of the equation. House Republicans seem invigorated by the passage of reconciliation (even if it was vetoed) and have vowed to move many of the separate parts of that repeal through the process this year. While that effort is most likely a play to keep Republican voters energized, it will continue to put Democrats in the House on record. In fact, one of the first votes in the House in January was a repeal of the Affordable Care Act (ACA). Speaker Paul Ryan (R-WI) has said his 2016 plan is largely about drawing a contrast with Democrats. As far as a Republican health care replacement, he and new Ways and Means Committee Chairman Kevin Brady (R-TX) have said that they intend to put forward a proposal for the eventual Republican nominee to use in the platform. Given that congressional Republicans have not yet coalesced around a replacement plan since enactment of the ACA, it would make more political sense to outline a broad set of principles supported by all Republicans rather than itemize specific legislation which might draw Republican opposition. In other words, it would be highly unlikely that the Republicans in the House will put up any sort of detailed replacement proposal in this presidential election year. 

If the Senate stays in Republican hands, that, on its face, would indicate that the Republican controlled Congress could tee-up a repeat of the reconciliation exercise that resulted in a Presidential veto of a repeal of Obamacare earlier this year. However, the Senate only passed that bill by a 52-47 vote. Any diminution in pro-repeal Republican ranks in the Senate could make it more difficult to get a bill through. (Senators Collins and Kirk were the only two Republicans to vote against the package, and a Democratic pick-up in the Kirk race wouldn't result in a gain in the vote against the repeal of Obamacare.) While there are enough seats in play to make a switch in control of the Senate a possibility, a more likely scenario would be for the Democrats to pick up a sufficient number of Senate seats to pull the vote total for another reconciliation bill under the 50 vote mark. 

Another complicating factor for the use of reconciliation is that the budget agreement negotiated last November contained a two year budget deal. Whether the Republicans in House and Senate have the appetite (or the votes) to renegotiate that deal in order to invigorate a reconciliation process is unclear. The House seems to be more willing to entertain the idea of putting forward a budget resolution that would contain reconciliation instructions but the Senate has not indicated that it is on board with that strategy. What is clear is that in the absence of reconciliation, Democrats will have sufficient votes to filibuster substantial changes to the ACA even if they don't take back the Senate. 

The key factor that might cause the House and Senate to take a serious look at reconciliation is the Presidential election. In the Republicans’ dream scenario, they maintain control of the House and Senate and also gain control of the White House. In that case, having a reconciliation process available in 2017 would ease the way for substantial changes in ACA. However, for the reconciliation process to be an option for Republicans in 2017, Congress would need to pass a budget resolution containing reconciliation instructions this year, well before the election results are in. Of course, if the White House remains in the hands of the Democrats, the use of reconciliation would most likely result in a replay of a vetoed reconciliation bill with insufficient votes to override the veto. 

The Republican field is largely united in their appeals to repeal the ACA, however there is significant disagreement over what it should be replaced with. Likewise, the Democratic hopefuls have engaged in a fight over ACA vs single-payer, with Hillary Clinton cast in the role of defender (with some modifications--she supports repeal of the Cadillac tax, for instance) of the ACA and Bernie Sanders wanting to move to a single-payer form of health care. While single-payer may energize some of the Democratic base, it faces long odds in a Republican controlled Congress. 

It is worth noting that some of the provisions to repeal portions of the ACA have received substantial Democratic support. By a vote of 90-10, the Senate voted to repeal the “Cadillac tax”. While a repeal was not ultimately included in the December 2015 “taxibus” – the bill combining tax provisions and omnibus appropriations for FY 2016 – this measure did enact a delay in the implementation of the “Cadillac tax” on certain health plans and a two year moratorium on the medical device excise tax. The effect of these moratoria will be a reduction in the amount of money available to support other ACA activities. Democratic support for these changes and the ongoing discussion by the Democratic presidential candidates would suggest that the ground has shifted on the debate of Obamacare. The issue for Democrats is no longer the stalwart defense of the ACA but what changes need to be made to deliver on the promise of lower costs. For Republicans, it is the same question--after ACA, what is next?

 
 
 

George C. Crawford
Washington, DC
+1 202 626 2625
gcrawford@kslaw.com
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Allison Kassir
Washington, DC
+1 202 626 5600
akassir@kslaw.com
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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