Repeal and Replace Faces a False Start

By: Brady Bizarro, Esq.

After the surprising collapse of the American Health Care Act (“AHCA”), House Speaker Paul Ryan (R-Wis.) remarked, “We’re going to be living with Obamacare for the foreseeable future.” Tom Price, the Secretary of Health and Human Services, proclaimed that Obamacare was “the law of the land.” In the immediate aftermath of the stunning political defeat, many political analysts concluded that the effort to repeal and replace Obamacare was finished. Only a few days later, however, there were talks of reviving the legislation over the next few weeks. The President himself took to social media to proclaim, “We are all going to make a deal on health care . . . that’s such an easy one.”

What changed? Republican leaders faced immense pressure from conservative activists, interest groups, the insurance lobby, donors, and constituents to follow through on one of their most significant campaign promises. In addition, the President has targeted individual congressmen, mostly from the House Freedom Caucus, and pressured them to get on board with the AHCA. Whatever the Republicans decide to do, they need to act fast. The legislative calendar is jam-packed with other top priorities, including passing a budget and tackling tax reform. Additionally, insurers are developing premiums and benefit packages for health plans to offer in 2018, and these will need to be reviewed by federal and state officials over the summer.

In the immediate future, despite the legislative failure, the Trump Administration still has plenty of ways it can cripple the ACA. The President himself has said the law would “explode” on its own, but that process could certainly be accelerated. For example, the Administration could block funding for ACA subsidies, refuse to enforce the individual and employer mandates, and redefine Essential Health Benefits (“EHBs”).

That last part, redefining EHBs, could have a significant impact on employer-sponsored health insurance. In fact, a new bill is in the works, and one of its provisions (included by the Freedom Caucus) is to repeal EHBs entirely. Essential Health Benefits are requirements that insurers have to cover services like maternity care, mental health care, and hospitalization. According to Republican lawmakers, removing these requirements would significantly lower the cost of certain health plans because they would not be forced to cover a defined list of services.

We will continue to follow new developments closely, especially those that impact employer-sponsored health care.