Healthcare, Congress, and the Trump Presidency

During the presidential campaign, Donald Trump spoke about taking immediate steps to repeal the Affordable Care Act (ACA), going so far as to say he would call Congress into a special session to do so. It appears, however, that this issue is more complicated than calling for an up or down vote on repeal.

There is a threshold issue Congress will have to address before it repeals or pares back the ACA. If Congress could somehow repeal the act, it would throw 20 million people off the insurance rolls. There often is a serious political backlash when policymakers take benefits away from the poeple. In the Senate, a prominent Republican said after the election that Congress should act in phases to avoid taking people’s health insurance away, so that Congress could transition to a new healthcare plan without impairing access to health care. In the House, on the other hand, Speaker Paul Ryan has said that Congress will try to act on Trump’s commitment to repeal the ACA. This discrepancy may simply reflect how the Senate and the House have different perspectives on the issue. Ryan may also not have intended for the statement to be taken literally, and may want to pursue significant changes to the ACA that do not jeopardize patient access to care.

The House has voted to repeal the ACA many times over the past 6 years. Earlier this year, the Senate voted on a modified repeal bill as well, and the bill that was sent to the President would have repealed the ACA in 2 years, with the idea that Congress would have 2 years to come up with a replacement. Not surprisingly, President Obama vetoed that bill. If Congress takes a similar approach this year, then the pressure will be on Congress to design an alternative, which could be difficult. Additionally, if Congress cannot agree within the 2-year time frame, then there would be a serious problem, as Congress would have succeeded on the repeal but not on the replacement.

Earlier this year, Speaker Ryan issued a blueprint that would make a number of far-reaching changes to the ACA, particularly in terms of reducing or eliminating mandates, getting rid of the special taxes that fund portions of the ACA, and abolishing the Innovation Center and the Independent Payment Advisory Board. Those changes may be more achievable than outright repeal, but they also may have the adverse impact on health insurance participation mentioned above.

In the upcoming 115th Congress, Republicans will not have a filibuster-proof majority in the Senate, so the Democrats could, and probably would, filibuster broad-based repeal efforts. The Congressional Republicans may turn to a mechanism known as budget reconciliation to effectuate repeal of at least a portion of the ACA. Congressional leadership could use the budget reconciliation process to avoid filibusters, because reconciliation bills cannot be filibustered (only a simple majority vote is required). However, reconciliation is limited to proposals that affect revenue, savings, or the debt ceiling. There are numerous provisions of the ACA that do not fit into those categories, and thus should not be included in a reconciliation bill. Still, reconciliation is a likely vehicle for legislation that would modify or repeal ACA provisions pertaining to savings and revenue.

Regarding Medicare, there may be some conflict between Trump and Ryan. Trump said often during the campaign that Medicare would not be modified under a Trump Administration. Ryan, however, has a number of far-reaching changes to entitlement programs, including Medicare, that he would like to pursue or at least consider. These include moving fee-for-service Medicare to a premium support system, whereby Medicare would pay all or a portion of private insurance premiums but would not directly pay for the care. Ryan also has spoken about introducing competitive bidding principles into the Medicare Advantage program and perhaps expanding competitive bidding into other areas. Also, regarding drug pricing, Trump has said that Medicare should be allowed to negotiate prices with drug manufacturers, which is directly contrary to the Congressional Republican position on drug pricing issues.

So, how this works out is not at all clear at this point. There has been some speculation that President-elect Trump will defer to the Ways & Means and Energy & Commerce Committees in the House and the Finance, Health, Education, and Labor & Pensions Committees in the Senate to work up changes to the ACA and Medicare. At this point, however, that is all it is – mere speculation.

With respect to the lame duck session, which began on November 14, there is only one measure that Congress absolutely has to take up – the current continuing resolution funding the federal government ends on December 9, and Congress has to act to fund the government after that date. Current thinking appears to be that Congress will kick the can down the road and enact a continuing resolution to fund the government into March of 2017. Outside of that, there are a couple of bills that Congress may decide to act on during this year. The 21st Century Cures Act (Cures Act) is a high priority for Fred Upton, chair of the House Energy and Commerce Committee, who is rotating out of the chairmanship at the end of this Congress. The Cures Act has been his number one initiative, so he will push to get it over the finish line this year. The Democrats may decide that this version of the bill is the best they can get (compared to what could happen with a Republican President), so they could drop or modify their demands regarding NIH funding to enable that to happen.

In addition, Ways & Means Chairman Kevin Brady has several Medicare-related priorities, including a hospital bill and a bill to establish a unified value-based purchasing program for post-acute care providers. He may well try to move those bills forward this year. It is important to emphasize, however, that what happens in the lame duck session will be determined by Congressional leadership in consultation with the incoming Administration.

Another area of speculation is who the White House will select to be Secretary of Health & Human Services. The names in circulation include Dr. Ben Carson, Rick Scott (governor of Florida and former CEO of Hospital Corporation of America) and former Speaker Newt Gingrich.

Clearly, this is a very fluid situation, which AGG will continue to monitor and report in this newsletter and via other means.

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