Congress takes step toward repealing ACA through reconciliation

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President's PerspectiveLast week, both the Senate and House took the first steps toward repealing the Affordable Care Act (ACA) by approving a FY 2017 budget blueprint that sets up repeal of the health law through a complex legislative process known as reconciliation.

I observed the “repeal and replace” debate last week as a part of a two-day American Hospital Association (AHA) educational session in Washington, DC. While it is clear that repeal is underway; that reality and what is, the preferred strategy going forward were the focus of discussions.

The budget resolution requires the Senate Finance and Health, Education, Labor and Pensions committees and the House Ways and Means and Energy and Commerce committees to achieve at least $1 billion each in savings in FY 2017 through FY 2026 by repealing certain parts of the ACA. That means the delivery system and insurance reforms would remain in place. Medicaid expansion, the individual and employer mandates and the subsidies and penalties are likely to be repealed.

While repeal is moving forward, there is no consensus on a replacement plan yet. There is a growing debate among Republicans about how quickly they should repeal the law, especially without a clear replacement plan.

In meetings with the South Dakota delegation, I stressed that if Congress is going to repeal the ACA, a replacement should be adopted simultaneously and that coverage levels under the new plan should at least equal those under the ACA.

The reconciliation resolution, which also includes the establishment of reserve funds for replacing the ACA, instructs the committees to submit their legislation to their respective Budget Committees by Jan. 27. The separate bills would be combined for floor consideration. Reconciliation is expected to start in House committees next week. Republican leaders have speculated that the legislation could be completed for final action by late February or early March.

The reconciliation process limits what can be included in legislation, and it requires just 51 votes in the Senate for passage rather than the usual filibuster-proof 60 votes. The AHA has released an animated video to explain the process. View the attached video to learn about the process, rules, limitations and significance.

As soon as they finish work on the ACA, Republicans are expected to move to restructuring Medicaid. That means converting Medicaid from its current form to one in which either states get a block grant to spend as they wish, or Medicaid spending is capped per capita. The objective is to reduce federal Medicaid spending by as much as $1 trillion over the next 10 years – imagine the impact that will have on Medicaid beneficiaries, providers and state budgets.

Given the pace of change, it will be critical for all of us to remain vigilant and engaged as developments emerge.