Could President-elect Donald Trump and Republicans decide it's politically smarter to reach a deal with Democrats this year to modify the Affordable Care Act, rather than repealing it and trying to create a new system from scratch?
It's possible, say both conservative and liberal health policy experts. There are plenty of areas where pragmatic Republicans and Democrats could reach agreement, such as tightening enrollment rules to reduce costs, giving insurers more leeway in setting premiums, and replacing the ACA's individual mandate with strong incentives for people to maintain continuous insurance coverage.
Both sides also could probably come together on giving states greater flexibility to design their own coverage systems, so red states could move to voucher-type models and blue states could keep the ACA framework or adopt a public insurance plan.
For Trump and some congressional GOP leaders, a healthcare reform deal with Democrats this year would get this politically vexing issue off their plate and free them to tackle other major legislative priorities such as job creation, tax reform, immigration and trade.
But there are major doubts whether the GOP can resolve its intraparty differences on healthcare policy and even get to the point of seeking bipartisan support. “I'm skeptical of a deal because of the deep polarization of the parties and, even more crippling, the split of GOP pragmatists in the Senate and Freedom Caucus ultraconservatives in the House,” said Lawrence Jacobs, an expert on healthcare politics at the University of Minnesota.
Beyond that, partisan political calculations could easily obstruct any dealmaking as party leaders look toward the 2018 congressional elections, experts in both camps say. Republicans are skeptical that Democrats seriously want to cooperate with them in passing an ACA replacement bill, while Democrats doubt the GOP will come up with a package that meets even minimal requirements for maintaining coverage.
In addition, rapid GOP action to abolish the ACA's various taxes and revenue sources could make it impossible to fund an alternative coverage system that would be acceptable to Democrats. “If Republicans kill the revenue sources right off the bat, that could kill a deal, because you'd have to find the money somewhere else,” said Chris Condeluci, a political consultant who served as a senior Senate GOP staffer during passage of the ACA.
Already, prospects for bipartisan cooperation are waning, as congressional Republicans race to pass a budget resolution that would set up an expedited party-line repeal of most of the ACA, perhaps as early as next month. Meanwhile, they are signaling they will defer consideration of replacement legislation for months if not years—as many as four years. That approach likely will make it even harder for them to gain the Democratic votes they'll need in the Senate to avoid a filibuster and pass a replacement plan.
“There is a compromise to be had if you want it,” said Dr. Ezekiel Emanuel, a University of Pennsylvania health policy professor who helped draft the ACA. “But now it seems Republicans just want to go through with repeal and delay, and I've long said that's not acceptable.”
Senate Democratic leader Chuck Schumer said much the same thing Wednesday, following a strategy meeting with President Barack Obama on protecting the ACA. “If you are repealing, show us what you'll replace it with first,” Schumer said. “All the problems in the healthcare system are going to be on (the Republicans') back.”
Some conservative experts similarly have urged Republicans to slow down, draft a replacement plan that could attract Democratic support, and pass repeal and replace as a single package. That's the approach favored by several Senate Republicans, including Lamar Alexander of Tennessee, who chairs the Senate Health, Education, Labor and Pensions Committee; Susan Collins of Maine; and Dr. Bill Cassidy of Louisiana, who co-sponsored legislation in May that would let people keep their ACA coverage or switch to a new, more conservative system.
James Capretta, a conservative expert at the American Enterprise Institute, has warned that a repeal-and-delay strategy carries grave political risks for Republicans because it could disrupt coverage for millions of Americans in the individual insurance market. He's urging Republicans, as part of a repeal-and-replace package, to embrace universal coverage through tax credits; let people keep their ACA coverage or switch to the new, conservative model; preserve Medicaid as a safety-net system for the poor; and replace the ACA's individual mandate with a system of automatic enrollment in basic insurance, from which people could opt out.
“Making broad enrollment in health insurance a primary goal of an ACA replacement plan will necessarily mean embracing some policies that do not always come naturally to the GOP,” Capretta wrote.
Citing conservatives like Capretta, Emanuel said, “There's a lot of overlap between conservatives and liberals—universal coverage, no pre-existing conditions, affordability, making it easy to shop.” He argued this could make it possible for Republicans to cut a deal with Democrats on a replacement plan. But, he added, “It depends on whether Republicans can get agreement in their own caucus, and that may turn out to be a little harder than it initially seemed.”
A tough but potentially solvable issue—if Republicans and Democrats get serious about reaching a deal—will be how to ensure that people can access individual-market coverage regardless of pre-existing medical conditions, while at the same time maintaining a viable mix of healthier and sicker people in the risk pool.
As an alternative to the ACA's requirement that nearly everyone buy coverage, Republicans favor incentives for people to keep continuous coverage by penalizing late-enrollment penalties and implementing waiting periods for people who have had a break in coverage. They also want to establish separate, high-risk pools that would offer plans to people with pre-existing conditions.
Democrats are skeptical about those approaches, noting that people typically have breaks in coverage when they lose a job or suffer other adverse events and can't afford to pay premiums. And they strongly oppose state high-risk pools, which they point out generally did not work well in the pre-ACA days. They want to avoid a return to the days of insurers using medical underwriting questionnaires to decide whether to accept applicants and how much to charge them.
Still, some liberal experts suggest Democrats could potentially accept auto-enrollment and waiting periods for people with insurance gaps to receive coverage for pre-existing conditions.
“If you step back from the individual mandate, it likely means you have to step back from protections for pre-existing conditions as well,” said Larry Levitt, senior vice president of the Kaiser Family Foundation. “Then the question is how far the parties are willing to go and whether there is a sweet spot that provides sufficient (consumer) protection without regulations that conservatives might view as too onerous.”
A bigger clash between the parties looms over the size of the subsidies that would replace the ACA's tax credits and cost-sharing reductions; the adequacy and affordability of the replacement coverage; and the percentage of the population that would gain or lose insurance. Republicans want to replace the ACA's income-based tax credits with smaller tax subsidies for far more people, without regard to income. They also envision leaner benefit plans with higher deductibles and out-of-pocket costs.
“It's a smaller pot available to a larger number of people,” said Joel Ario, a managing director at Manatt Health Solutions who served in the HHS during the Obama administration. “It's thinning the soup. That's a difficult issue to get through.”
Trump is a wild card in all this. Even though on Tuesday he tweeted that the ACA is “lousy healthcare,” some observers think he may try to negotiate a deal with Democrats that keeps key parts of the law that are popular. On Monday, Kellyanne Conway, his senior adviser, said Trump doesn't want anyone who currently has coverage under the ACA to lose it. “Also, we're very aware the public likes coverage for pre-existing conditions. There are some pieces of merit in the current plan.”
Condeluci, the consultant, said Republicans are counting on Democrats to become more open to negotiating toward the end of 2017 and at the start of next year when the midterm elections get closer. But it all depends on what Republicans put into their replacement package. That comes back to the internal dynamics of the GOP and the willingness of its most right-wing members to support what they might see as a conservative tinkering with Obamacare.
“The more pragmatic Republicans can say they repealed the parts of the law that are the most onerous, modified it with conservative ideas and claim victory,” Condeluci said. “But will they be able to roll the conservatives who won't go along with Obamacare lite, and win Democratic support to get it across the finish line? It's an open question.”
