United States: The Future Of The Affordable Care Act (Week 1): Assessing The New Normal

Last Updated: November 30 2016
Article by Alden J. Bianchi

The Affordable Care Act is the single most important piece of Federal social legislation in the United States in more than a generation, but with the election of Donald J. Trump as President its fate is now uncertain. Its core policy concerns and principal goals, i.e., to expand medical coverage, increase the quality of medical outcomes, and constrain costs, nevertheless remain. What is about to change is the "means whereby" these goals might be accomplished.

Even before the new administration takes office, there is at least one thing that seems certain: there will be no going back to the status quo ante. While the law was the subject of withering criticism by candidate Trump and his proxies, their mantra was and remains "repeal and replace." At the end of the process, it is unlikely that we be back at March 23, 2010 (the date of the ACA's enactment). We will instead be somewhere else. What remains to be seen is the extent to which the replacement resembles the ACA. This post and those that follow will endeavor to chart the arc of the replacement process. In the weeks and months that follow, we plan to report on, and, with the help of a roster of knowable guests, examine both the process and the outcome.

It is difficult to underestimate the stakes: The ACA sits atop a major tectonic plate of the U.S. economy, nearly 18% of which is health care related. Health care providers, commercial insurance carriers, and the vast Medicare/Medicaid complex are among the law's primary stakeholders. They, and their local communities, have much to lose or gain depending on how health care financing is regulated. The ACA is the way it is largely because of them. Far more than any other circumstance, including Mr. Trump's election and the accompanying Congressional majorities, it is the interests of the ACA's major stakeholders, as well as the interests of U.S. citizens and employers, that will determine the law's future. But—to be sure—those interests will be filtered through and steered by the policy preferences of Republican lawmakers.

First Principles

In 2006, the Commonwealth of Massachusetts overhauled its health care financing rules by adopting a market- and regulatory-based approach that included five key components: an individual mandate, an employer mandate, low-income subsidies, a public insurance exchange, and associated tax reforms to pay for it all. The design of the Massachusetts law was due in large part to the work of the right-leaning Heritage Foundation, and the law was the joint effort of a Republican Governor (Mitt Romney) and a decidedly left-leaning democratic legislature. The Massachusetts law served as the blueprint for the ACA, which includes the same five components. That the two laws share the same chassis should surprise no one. In each case the policymakers faced the daunting constraints of a larger political, social, and cultural environment, and they reacted accordingly.

The Massachusetts law and the ACA seek to expand coverage by requiring individuals to have, and carriers to accept all applicants for, health insurance coverage. To enable low- and moderate income individuals to purchase coverage, both laws also provided premium subsidies. Both laws also provided for a technology-enabled platform—in Massachusetts, the Health Connector, and under the ACA, health care exchanges or marketplaces—to assist individuals and small groups to shop for and compare health insurance policies and products from competing vendors.

Since 1945, with the McCarran–Ferguson Act (15 U.S.C. §§ 1011-1015), states have been the primary regulators of insurance. The law was passed in response to United States v. South-Eastern Underwriters Association, wherein the Supreme Court ruled that the federal government could regulate insurance companies under the authority of the Commerce Clause in the U.S. Constitution. Since that time, Congress has encroached on the state's broad regulatory prerogative by enacting piecemeal benefit mandates (e.g., a mandate to cover pediatric vaccines, health care continuation rule, privacy standards, etc.). The ACA went much further, however, by establishing a comprehensive Federal insurance regulatory superstructure that replaced the piecemeal approach of prior law. This history is important going forward, since there are those on the political right (a/k/a the winners in the most recent election cycle) who think balance of power needs to shift away from the Federal government to the individual states to allow greater flexibility in benefit design and, as a consequence, a wider range of benefit options from which consumers can choose.

Lastly, no discussion about changing the ACA would be complete without a mention of Medicaid. Medicaid is a federal government entitlement program that provides healthcare coverage to certain categories of people who have low income and few assets. Each state runs its own version of Medicaid, with slightly different rules and coverage. While states must cover certain groups of people and certain benefits, they have some flexibility to include or exclude some benefits and to set eligibility rules. The ACA greatly expanded the reach of Medicaid, though the Supreme Court later made this portion of the law discretionary. Some 19 states have elected not to enact the ACA's Medicaid changes. Under an alternative favored by republican lawmakers, Medicaid would be reorganized to be structured as "block grants" to the states. A block grant approach would vest states with broad latitude to run the program as they saw fit.

The Trump Agenda

The Trump transition team has issued a statement of principles on the subject of health care, which promises to "repeal the ACA and replace it with a solution that includes Health Savings Accounts (HSAs), and returns the historic role in regulating health insurance to the States." It further advises that the "Administration also will work with both Congress and the States to re-establish high-risk pools – a proven approach to ensuring access to health insurance coverage for individuals who have significant medical expenses and who have not maintained continuous coverage." Tellingly, the statement also acknowledges that "the U.S. health care system did not begin with – and will not end with the repeal of – the ACA." There follows a list of action steps that include:

  • Protect individual conscience in healthcare
  • Protect innocent human life from conception to natural death, including the most defenseless and those Americans with disabilities
  • Advance research and development in healthcare
  • Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products
  • Modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation – and beyond
  • Maximize flexibility for States in administering Medicaid, to enable States to experiment with innovative methods to deliver healthcare to our low-income citizens.

In the next and following posts, we will examine each of these points in turn.

The Near Term Impact of the Election

The promise to "repeal and replace" the ACA was a cornerstone of the Trump campaign as well as the campaigns of most Republication candidates. It will therefore be important to them to deliver on that promise. The Republicans do not have a veto-proof majority in the Senate, so they are not entirely free to repeal the ACA. They can, however, use the reconciliation process to repeal certain of the law's major provisions.

One issue the Trump administration must face is that there are parts of the ACA the people genuinely like. Mr. Trump acknowledged as much, saying for example, that he does not envision abandoning the ACA's ban on pre-existing conditions. (In an interview on 60 Minutes, he referred to that provision as "one of the strongest assets" of the law.) He is also on record as wanting to preserve the rule allowing young adults to remain on their parents' insurance to age 26. This means that neither the Trump administration nor Congress is likely to repeal the ACA during, say, the week following the Inauguration and then figure out how to "replace it." The result would be to leave tens of millions U.S. citizens without coverage. The most likely approach would instead involve an immediate repeal coupled with a transition period that lawmakers could use to develop and pass a replacement that would help people stay insured.

So it is all but certain that the ACA will be repealed, and it is also all but certain that the law will be replaced with something. What is not yet known is the extent to which what follows will be able to accomplish what the ACA set out to do but with different mechanisms. This gets us back to our initial observation about the ACA stakeholders. We are dealing here with nearly 20% of the U.S. gross domestic product. The lobbying on all sides will be intense.

Because immediate repeal with no transition period has the potential for causing such great harm, few are predicting that outcome (during the campaign, Trump said "I won't let people die on the streets"). At the other end of the spectrum, some commentators have predicted a transition period lasting up to three years. This would relieve Republican lawmakers running in 2019/20 of the need to defend the substance of any replacement. They could instead take credit for having repealed the law while reassuring constituents that they are hard at work on a replacement that is in their best interests. But this will also give the stakeholders who favor all or most of the ACA ample time to marshal their resources to defend those provisions—or at least come up with viable alternatives.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Alden J. Bianchi
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions