This week, NAHU staff held several meetings with key policymakers in Washington, D.C., in preparation of the incoming Donald Trump administration. These meetings, with the House leadership and the Senate Finance Committee, were to discuss the Republican plans to use the reconciliation process to repeal portions of the ACA and the possible replacement plans that are under consideration, including House Speaker Paul Ryan’s A Better Way plan released earlier this year. As a reminder, if you have suggestions regarding our work with the Trump transition team and members of Congress on the future plans to reform the ACA that you would like to share with NAHU, you can send your thoughts and ideas to ACAreform@nahu.org.
So why are we focusing so much on what could happen during reconciliation, and what exactly is it? The reconciliation process allows certain legislation that specifically deals with spending, revenues and the debt limit to only require a simple majority of both chambers for passage (51 Senate votes instead of 60 votes, plus 218 House votes). Reconciliation also eliminates the Senate filibuster as debate is limited to 20 hours, and non-germane amendments are banned from being added to the bills in the Senate debate. The tradeoff for reconciliation only requiring simple majorities is that there are several restrictions on its usage—largely that it is limited to one spending/revenue bill per year, or per budget resolution, and that it doesn’t change the overall level of spending or revenue, or where such a change is merely "incidental."
Currently, Republicans are seeking to make sweeping changes to the ACA through a two-step process: first to repeal certain aspects of the law through the budget reconciliation process, and second to approve a yet-to-be-determined replacement plan. Republicans successfully passed a reconciliation repeal of portions of the ACA last December, but that was vetoed by President Obama in January. That is why the first order of business when Congress convenes in January would be to seek budget related repeals to the ACA through reconciliation.
While the ACA was partially amended through the budget reconciliation process, it cannot be fully repealed this way because ultimately the law was passed by the 111th Congress through regular order in 2010. The Patient Protection and Affordable Care Act was passed by the Senate in December 2009, and then passed the House and was signed by President Obama in March 2010. Following passage, both chambers agreed on a subsequent budget reconciliation bill, the Health Care and Education Reconciliation Act, that made marginal budget-relevant changes that met the stringent requirements of the reconciliation process.
That reconciliation package increased the amounts of the tax credits, eliminated several special deals such as Senator Ben Nelson's (D-NE) “Cornhusker Kickback,” closed the Medicare Part D "donut hole" by 2020, delayed the implementation of the Cadillac/excise tax until 2018, increased Medicaid reimbursement rates to primary care doctors to match Medicare reimbursement rates, make the federal government pay all costs of expanding Medicaid under the reform until 2016 and gradually lower to 90% by 2020, set penalty amounts for the employer mandate, and establish a Medicare tax on the unearned incomes of families that earn more than $250,000 annually.
As the ACA reconciliation process only addressed budget-relevant items of the law that was otherwise passed by regular order, any repeal of the law using the reconciliation process would likewise only be able to address budget-relevant items. The reconciliation that was vetoed by President Obama earlier this year provides a roadmap for the items Republicans would seek to repeal in a future attempt. That bill would have repealed the state-optional Medicaid expansion beginning in 2018, the individual and employer mandates by changing the penalties to $0 as a workaround to budget rules, and the bulk of the law’s 21 tax increases.
As Congress deliberates strategies for moving a similar reconciliation bill through the next session beginning in January, NAHU will continue to work with policymakers in Congress to determine how to change the ACA in ways that will not lead to adverse consequences for the stability of the health insurance markets or your clients.
We know many of you would like to meet with your members of Congress while they are in their home districts in the coming weeks before the 115th Congress convenes on January 3. Since a healthcare reform reconciliation bill is the most likely legislation to be introduced at the beginning of the year to address any changes in the health insurance market, we urge you to focus your discussions on what would be most useful budget relevant policies to be repealed through the reconciliation process. We have prepared some talking points to assist members in this effort. If you plan to meet with your member of Congress in the coming weeks, please let us know by emailing firstname.lastname@example.org so that we may provide additional talking points as needed.