JURIST Guest Columnist James G. Hodge, Jr. of The Sandra Day O’Connor College of Law, Arizona State University, discusses forthcoming “repeal and replace” strategies regarding the Affordable Care Act (ACA), and how replacements for its provisions must focus on assuring equitable access to quality care…

On his first day in office, President Donald J. Trump directed via Executive Order that federal agencies should “waive, defer, grant exemptions from, or delay” enforcement of provisions of the Patient Protection and Affordable Care Act (ACA) that impose fiscal burdens. However, in an early exhibition of political restraint, President Trump and the Republican-led Congress have not yet fully repealed the ACA, despite promises to do so — and fast. It may have taken decades for multiple Presidential administrations to develop comprehensive health care reform but only one administration to effectively undo it.

To be sure, the ACA is on legal life support. The only reason that its shelf-life has been extended may be the recognition that replacing “Obamacare” is not so easy. Americans have developed a love-hate relationship with the ACA. They love the assurance of health coverage despite pre-existing condition, but hate that they are mandated to get covered. They love how their dependents can remain on their insurance policies until age 26, but hate how those policies’ premiums have risen over years. They love how the ACA extended coverage to 20 million Americans who previously lacked it, but hate that such care is subsidized by new taxes, penalties and other revenues.

Jettisoning undesirable provisions of the ACA while retaining what works is complicated. Replacement options are percolating across the aisles of Congress and throughout the states. Some proposals would initiate the repeal of the ACA in its entirety. Others seek to repair what is deemed broken without trashing the entire act. Most of the proposals provide patchwork fixes. Some present more comprehensive replacements.

Time will tell what approaches are actually taken and whether they work in the ongoing conversion of “Obamacare” to “Trumpcare.” In the wake of these reforms, however, is the fate of millions of Americans whose individual and community health is tied to efficacious policies to assure low-cost, high-option, quality health care for all. The Congressional Budget Office estimates that 18 million Americans could lose their health insurance coverage in less than a year (and nearly double that many in the decade ahead) if the ACA is repealed and not adequately replaced. To the extent that access to quality, affordable health care was the initial promise of the ACA, it may be the measuring stick for Trumpcare for years to come.

Repeal Now, Replace Later

Talk of ACA’s repeal is nothing new. Since its passage in 2010, Republican members of Congress have introduced dozens of bills seeking to abolish it. The looming threat of a Presidential veto repelled such legislation. However, over years the ACA’s impacts have been steadily chipped away by:

• multiple judicial decisions questioning its unconstitutionality;
• internal actions of the Department of Health and Human Services (HHS) obviating its provisions or enforcement;
• Congressional funding restrictions or limits;
• state-based decisions to deny citizens’ Medicaid coverage despite billions of dollars of federal support; and
• crafty maneuvers by insurers and providers to raise insurance premiums and costs even while covering millions more than ever before.

The full impact of the ACA as originally designed is unknown, as its full provisions were never completely in force, nor will they ever be in the future. In a strategy best described by Republican Senator Susan Collins, ME, as a “death spiral,” President Trump’s administration and Congress are working in real-time to obliterate the ACA entirely or dismantle it piece by piece, with no meaningful substitute in its stead (at least for the moment).

On January 12, 2017, former Republican Presidential rival, Senator Ted Cruz, R-TX, introduced Senate Bill 106 to repeal the ACA in its entirety. On January 23, Senator Bill Cassidy, R-LA, and Senator Collins introduced the Patient Freedom Act,, which presented 3 options for states to consider:

1. “maintain status quo,” continuing to operate under ACA’s key provisions;
2. “go rogue,” essentially regulating insurance markets without federal assistance; or
3. “take the money,” receiving 95% of federal funding for premium tax credits and cost sharing subsidies plus the federal match for Medicaid expansion.

How or whether these reforms would work if states split evenly on the 3 options is unclear. Meanwhile, Senator Rand Paul, R-KY, introduced Senate Bill 222 on January 24 to repeal the ACA and replace it with some reforms of private health insurance. Representative Gregg Harper, R-MS, seeks to turn back the clock. His sponsored Resolution, H.R. 633, would authorize health insurers to continue offering plans similar to those issued prior to the ACA’s enactment. Multiple Congressional committees promise additional proposals by the end of January.

A Smorgasbord of “Quick Fix” Replacements

The imminent, political death of the ACA has generated several legislative replacement options of varying degrees of scope, breadth and potential impact. None proposes to replace the ACA with equally comprehensive health care reforms. Reports suggest President Trump is working closely with HHS’ Secretary nominee Tom Price and Congressional leaders on legislation with the goal of “insurance for everybody.” This is a lofty claim, as not even the ACA managed to guarantee it.

Current replacement options include a litany of quick fixes to retain the ACA’s more popular measures, remedy fiscal issues or repair existing deficiencies. These include plans to:

• continue coverage of dependents through age 26 on their guardian’s health plans (S.Amdt.81 to S.Con.Res3);
• repeal the annual fee on health insurers (H.R. 246);
• return unobligated federal funds in the implementation of state health insurance exchanges (H.R. 640);
• create a safe harbor for defendants in medical malpractice actions who demonstrate adherence to clinical practice guidelines (H.R. 277);
• reinstate IRS allowances for expenses for over-the-counter drugs under health savings accounts and flexible spending arrangements (S.85);
• prohibit federal funding for health coverage of abortions (H.R. 7); and
• prohibit health insurance denials based on pre-existing conditions (H.R. 628).

While the collective viability of these patchwork approaches is questionable, some may be more popular than others. For example, preventing health insurance companies from denying applicants coverage based on their pre-existing conditions is applauded by nearly everyone, except health insurers.

Over 50% of Americans have some sort of pre-existing condition, including 27% of persons under 65 years old who are largely ineligible for Medicare. Health insurance executives have little incentive to cover these higher risk patients. For decades, they could lawfully “cherry pick” among available customers. Unless insuring these persons is counterbalanced with a pool of healthy persons (which was the impetus for the ACA’s employer and individual mandate provisions), health insurance companies will disdain “pre-existing” coverage requirements.

To address this reality, more comprehensive replacement approaches include the return of the “high risk pool” concept originally floated in the Clinton administration. If the sickest individuals are cloistered in their own pool for specific, government-subsidized insurance, healthy persons outside the pool could obtain cheaper health coverage. It is nice idea, but flawed in practice. As the New York Times reported on January 23, states like California, Colorado and Washington that operated high risk pools in the past ran into major fiscal and other dilemmas.

Medicaid: From Expansion to Retraction

Additional replacement strategies center on the flailing Medicaid expansion program built into the ACA but bootstrapped by the US Supreme Court and resulting state refusals to participate. In NFIB v. Sebelius in 2012, the Court found that federal spending conditions tacked onto the ACA’s Medicaid expansion initiative were unconstitutional. As a result, only 32 states signed up for expanded Medicaid, despite enormous federal subsidies to pay for it.

On January 24, Senator Tom Price, R-GA, suggested in his HHS Secretary confirmation hearing that “every single individual ought to be able to have access to coverage” via Medicaid. Yet, outright repeal of the ACA means the end of Medicaid expansion for all. In its place, multiple state governors, several Congressional members and President Trump have proposed Medicaid “block grant” programs. Massive lump sums would be handed to states to expand and run their Medicaid programs as they see fit.

Again, a neat idea, but messy in application. Block grants may appeal to states seeking more control, but would likely contribute to increased, widespread variations in Medicaid services and benefits. Colorado’s Democratic Governor John Hickenlooper suggested such block grants would “force us to make impossible choices in our Medicaid program.” Millions of state residents who previously qualified for ACA-supported Medicaid expansion benefits might see their coverage curtailed or denied outright. Furthermore, how long will Congress, intent on reducing federal deficits, dump hundreds of billions of dollars into state-based health programs? In 2016, Congress struggled for months to approve a mere $1 billion for Zika preparedness efforts.

The Future Under Trumpcare

President Trump may forever be known not so much for what he and his administration did, but what they undid. Crafting and passing the ACA was the product of decades-long work. It is a complicated piece of federal legislation that works to meld access to quality care with patients’ choices of providers while attempting to control costs. The ACA is not perfect by any stretch, but unraveling and replacing it may prove to be the greatest challenge of a new President in his first elected office.

As Professors Gostin, Hyman and Jacobson surmise in their JAMA commentary first published online in November 2016, “the goal should be to ensure that all individuals–sick or healthy, poor or well-off–receive the care they need.” Absent meaningful replacement strategies, quick, cobbled and inadequate fixes will result.

The timing underlying the emergence of Trumpcare could not be worse. Americans stand to lose access to basic health services and essential public health funding just as threats of communicable diseases like Zika, chronic conditions like Alzheimers, injuries related to guns and opiate abuse and unhealthy environments affected by global climate change are on the rise. National health care costs will likely escalate. Left by the wayside may be millions of Americans who can only dream of a time when they too had access to quality, affordable health care.

James G. Hodge, Jr., JD, LLM, is Professor of Public Health Law and Ethics, and Director, Public Health Law and Policy Program at Sandra Day O’Connor College of Law, ASU. He would like to thank Sarah Wetter, JD Candidate 2017, Senior Legal Researcher, ASU’s Public Health Law and Policy Program, for her research and editing assistance.

Suggested citation: James G. Hodge, Jr., ACA’s Repeal, Replace, and Repair, JURIST – Academic Commentary, Jan. 20, 2017, http://jurist.org/forum/2017/01/James-Hodge-ACA.php