Summary
While the final outcome of efforts to repeal portions of the Affordable Care Act (ACA) and potentially replace them to some degree is still very much in question, we wanted to provide some brief intelligence and analysis regarding the state of play. First, many questions have arisen about role the Cassidy-Collins bill will truly play in the process. It is important to note, at the outset, that Cassidy-Collins contains several non-budgetary provisions that require 60 votes to pass, which effectively rules out passage as a whole at any point. Republican leadership has described this bill as “one of many” replacement ideas that will arise, which is thinly veiled guidance not to overestimate the impact it will have. We believe there are two key takeaways from this development: (1) there are fissures among Republicans over repeal and replace, especially on the Senate side, and those fissures are deepening with time; and (2) the concept of allowing states to make some decisions regarding the degree to which they want to maintain components of the ACA will continue to be an element of the debate. At the end of the day, the “base bill” for repeal is still H.R. 3762, the reconciliation bill Congress passed at the end of 2015, with leadership conceding that only some minor replacement policies could potentially be added.
Second, we believe there are two key things to understand regarding the Trump Executive Order, as it impacts nearer term repeal and replace efforts: (1) so far, there is little indication the Trump Administration will coordinate closely with congressional Republicans on strategy or its regulatory actions (they did not with the EO); and (2) those hoping the Administration will take meaningful, effective steps to stabilize insurance markets in parallel with repeal and replace legislation have good cause to be concerned.
Third, we understand that the House, at least, is actively considering including some kind of Medicaid block granting or related reforms in the first-step reconciliation repeal bill. At the same time, some key House Members are saying that states that expanded Medicaid under the ACA should be allowed to keep that coverage funding, so Medicaid is among the more uncertain aspects of this effort at this point. Recent roundtable discussions with governors conducted by the Energy & Commerce and Finance Committees reinforced the vast array of opinions afoot regarding Medicaid funding and reform.
Fourth, with regard to timing and process, again the picture is very opaque. Some key House Republican staff have suggested the process, even for a fairly restrained, repeal-focused reconciliation bill, could drag on through the spring, into April or even May. The goal is to have this process complete, at the latest, before a new FY18 budget resolution will be considered in April, but even that is not certain. Congressional leaders continue, so far, to plan for the bill to originate in the House committees, go to the House floor, and then bypass the Senate Committees in an effort to minimize changes before it hits the floor of the upper chamber.