The Republicans' congressional victories this week position them to take aim at significant provisions of the Patient Protection and Affordable Care Act that could endanger its long-term viability. But only if they can agree on a plan of attack and stick with it.
Targets are expected to include controversial provisions of the law such as the employer and individual insurance mandates and excise taxes on medical devices and health plans. Another likely target is the 30-hour-per-week definition of full-time work.
“With the magnitude of the result, the Republicans will feel that this was a real referendum on their side and will feel empowered to take a lot of votes on ACA,” said Caroline Pearson, a vice president at the Washington-based research firm Avalere Health. “Anything in ACA is fair game.”
The budget-reconciliation process could be crucial to those efforts because it allows for passage in the Senate with only 51 votes instead of the 60 votes required to break filibusters. Using that process to dismantle Obamacare would be seen as sweet revenge for Republicans since that's how the law was originally passed.
“The Affordable Care Act is very much on the table,” said Stephen Northrup, who was the health policy director for the Senate Committee on Health, Education, Labor & Pensions the last time Republicans were in the majority and is now a partner at the Rampy Northrup lobbying firm. “Republicans are going to try to use budget reconciliation next year to do some targeted repeals of different pieces and provisions of the law.”
But many of those changes will cost money. Raising the bar for full-time work to 40 hours, for example, would cost $83 billion over a decade, according to the Congressional Budget Office (PDF). Eliminating the 2.3% tax on medical devices would cost $29 billion over a decade, according to the Joint Committee on Taxation. Republicans will need to find ways to pay for such changes, a task that's likely to cause considerable heartburn.
Jeff Goldsmith, president of Health Futures, a consulting firm based in Charlottesville, Va., predicts that Republicans will target some of the more obscure, but significant, reform provisions of the ACA, such as the Patient-Centered Outcomes Research Institute or the CMS' Innovation Center, to help pay for those changes. “There really isn't much of a constituency to support the spending,” Goldsmith said. “Would the president fall on his sword to keep those in operation?”
But Goldsmith worries that eliminating such provisions will erode the effectiveness of the law and could potentially fatally undermine it in the long run. “(Republicans) are not going to leave this alone. That I am confident of,” Goldsmith said. “So if they don't have the votes to kill it, how can they cripple it?”
Northrup points out that House Republicans tried for a five-year delay in the individual mandate to pay for a permanent repeal of Medicare's physician-payment formula earlier this year. He expects them to look to that source again to pay for other changes to the ACA. Delaying the individual mandate would save roughly $170 billion in subsidy payments over a decade, but it would also mean 13 million fewer Americans with insurance by 2018, according to the CBO.
Henry Aaron, a senior fellow at the Brookings Institution, said Republicans could face a political backlash if people start losing benefits and blame the GOP. “If you break it, you own it,” said Aaron, a Democrat. “They're going to have responsibility for anything that goes wrong.”
Obama suggested on Wednesday during a White House news conference that he was open to Republican ideas for improving the law. He demurred when asked specifically about the medical-device tax, but he was clear about where he stands on the requirement that most people acquire coverage or face a tax penalty. “The individual mandate is a line I can't cross,” Obama said. “That's a central component of the law.”
Republicans could struggle to stay united on a healthcare agenda. Two years of Republican rule in the House has demonstrated that reaching consensus in the fractious GOP caucus can be dicey. That could prove equally true in the Senate, with several members harboring presidential ambitions that could be better served by generating headlines than adhering to the wishes of caucus leadership. Sens. Ted Cruz of Texas, Rand Paul of Kentucky and Marco Rubio of Florida could all cause headaches for expected Senate Majority Leader Mitch McConnell.
“A lot is going to depend on the ability of both the House and Senate leadership to organize their troops,” Aaron said. “It was Will Rogers who said, 'I'm a member of no organized party, I'm a Democrat,' and I think some Republicans might say the same thing today.”
Northrup agrees that keeping Republicans united on a plan to target the ACA could prove difficult. There is often a lack of understanding across legislative bodies about how each chamber works, he said, even when they're under control of the same party. “There's no shortage of targets,” Northrup said. “It's just a question of can Republicans in the House and Senate come together and agree on a select list of targets.”
Follow Paul Demko on Twitter: @MHpdemko