The election of Donald Trump and Republican majorities in Congress, will bring disruptive change to Washington DC—including to the Affordable Care Act. While media attention on President-elect Trump’s position on the healthcare reform law has focused on his desire to repeal it, the Trump-Congressional Republican position is best characterized as retain, remove, replace, reduce.

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A Change Election: “4-Rs” of Affordable Care Act Change

Mon Nov 14, 2016

The election of outsider Donald Trump, with Republican majorities in the House and Senate, will bring disruptive change to Washington DC—including to the Affordable Care Act.

While media attention on President-elect Trump’s position on the healthcare reform law has focused on “1-R,” i.e., Repeal, the Trump-Congressional Republican position is best characterized as “4-R’s”: Retain, Remove, Replace, Reduce.

Retain
The new President and Congress would almost certainly wish to retain some ACA provisions, such as up-to-age-26 eligibility to enroll in parents’ health plans and the ACA ban on pre-existing condition exclusions.

Remove
Republicans, and many Democrats, will want to remove some ACA provisions completely, particularly the 40% excise tax on so-called “Cadillac” or high-value health plans. No doubt other ACA provisions will fall into the totally remove bucket.

Replace
Some pillars of the 2010 healthcare reform law will be targets for replacement, including the mandated 10-category “Essential Health Benefits” packages that must be offered in the individual market and maybe even the federal and state health insurance exchanges. Many exchanges have become financially unsustainable, with premiums soaring and insurers scrambling for the exits. It’s possible that President Trump will move to replace the exchanges with state-based risk pools, expanded Health Savings Accounts and refundable tax credits to purchase insurance across state lines.

Reduce
Other ACA provisions likely will be scaled back, especially the employer “play or pay” mandate and the controversial individual mandate the U.S. Supreme Court upheld in 2012. On the employer mandate, President Trump and the Republican Congress could redefine “full-time employee” and “applicable large employer” and streamline employer health coverage reporting to ease employer compliance burdens. It’s also possible the employer mandate could be removed.

This “4-R” strategy the new President and Congress could pursue means, of course, that the Affordable Care Act is not likely to be eliminated. Some 20 million Americans now have health insurance because of the law, including about 10 million enrolled through the ACA exchanges. President Trump and the U.S. Congress are not likely to put all these people back on the rolls of the uninsured.

Won’t legislation be required to change the Affordable Care Act?
Yes, and no. In an ironic twist of legislative procedure, Capitol Hill Republicans could change the ACA using the very same “reconciliation” or simple-majority parliamentary maneuver Democrats used to enact the law in 2010. If successful, Republicans could short-circuit a likely Democratic filibuster and enact changes with 51 votes in the Senate instead of 60.

In addition, President Trump could conceivably execute some changes in the ACA using the same regulatory authority President Obama invoked to make certain changes, e.g., to delay the employer mandate. President Obama has established an important precedent that the ACA confers broad authority on executive agencies to interpret the underlying statute in regulation.

Donald Trump comes to Washington DC promising sweeping change. But while presidents can be change agents, they cannot be change makers.  To change laws, presidents need the approval of the U.S. Senate and the House of Representatives. But one thing is certain: change will come to the Affordable Care Act—and soon.