The top pre-election priority of Republicans in Congress and President Trump was to 'repeal and replace' the Affordable Care Act and their push to do so has continued post-election. However, repealing the act and putting a new framework in its place is replete with practical, procedural and political challenges. It also raises significant substantive policy questions. While it remains to be seen what exactly is in store for the act in 2017 and beyond, there is value in exploring the hurdles facing the repeal and replace effort.

An Affordable Care Act repeal, if enacted in this Congress, most likely would be partial, not full. Although Republicans will control both chambers of Congress and the White House, they will not have a filibuster-proof majority (60 votes) in the Senate. As a result, congressional Republicans and the incoming Trump administration are working on proposed language to repeal parts of the act through the budget reconciliation process, which requires only 51 votes for Senate passage. Among other procedural and political hurdles, the budget reconciliation process limits the types of provision that the legislation can include to those that affect the federal budget, and it remains to be seen which provisions Republicans will seek to repeal and which they will seek to keep.

The question of what stays and what goes in a partial repeal scenario also raises significant substantive issues that remain unresolved:

  • Many health economists have concluded that various well-known parts of the Affordable Care Act that are maligned as unpopular (eg, the individual mandate) are necessary to support and sustain well-known popular parts (eg, the ban on denials or exclusions based on pre-existing conditions). Thus, it is not clear how to keep certain popular provisions if certain unpopular provisions are repealed; and
  • A number of additional provisions have already been implemented and integrated into the healthcare system and, while popular among certain stakeholders, could be targets for potential repeal or restraint by the Republican party. For example, the Affordable Care Act has:
    • created the Medicare Independent Payment Advisory Board and the Centre for Medicare and Medicaid Innovation;
    • expanded the 340B Drug Pricing Programme;
    • imposed taxes and fees on health insurers, pharmaceutical manufacturers and medical devices;
    • amended healthcare fraud and abuse laws, including the Anti-kickback Statute; and
    • created the Coverage Gap Discount Programme as part of provisions that fill the Medicare Part D doughnut hole over a period of 10 years, starting in 2010.

Repealing these provisions would impose substantial costs and uncertainties for all healthcare stakeholders. It is unclear which, if any, of these Affordable Care Act provisions congressional Republicans would (or could) seek to repeal under the reconciliation process.

Further, the process to repeal and replace the Affordable Care Act has recently given way to 'repeal and delay', as Republicans have not yet coalesced around a plan to replace the act. Nor is there a consensus on the length of the contemplated delay for developing, enacting and implementing the replacement. Repealing significant Affordable Care Act provisions without a replacement in place would create additional costs and uncertainties for the entire US healthcare system, regardless of whether the repeal took effect immediately or was delayed. Even without repealing legislative provisions, the Republican-controlled Congress and administration could refuse to fund or implement certain Affordable Care Act provisions, or could pursue litigation strategies that threaten the sustainability of the exchanges and other Affordable Care Act-related provisions.

Meanwhile, President Obama met privately with congressional Democrats on January 4 2017 to discuss ways to protect and defend the Affordable Care Act against congressional Republicans' repeal strategy.

For further information on this topic please contact Stephanie P Hales at Sidley Austin LLP by telephone (+1 202 736 8000) or email (shales@sidley.com). The Sidley Austin website can be accessed at www.sidley.com.

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