United States: Capitol Hill Healthcare Update - January 4, 2017

New Congress targets ACA repeal

Republican congressional leaders overseeing the new 115th Congress will trigger a legislative process this week which will likely culminate in February with the repeal of most of the Affordable Care Act (ACA). The Senate will vote on a budget framework that will authorize separate legislation known as budget reconciliation. That separate bill will be the vehicle Republicans use to repeal most of the ACA, and because it requires only a simple majority to win Senate approval, Democrats cannot block the repeal effort with a filibuster.

Scrapping most of the ACA will be a lengthy legislative process requiring dozens of hours of debate on the Senate floor and countless hours of more debate and votes in multiple House and Senate committees. Still, for Congress, this will be legislating at lightning speed. While there may be little doubt of the outcome, Republicans have yet to reach consensus on key details, including when the repeal would go into effect and which ACA taxes may stay in place both during the transition to a new healthcare law and after.

The ACA includes taxes on insurers and drug and medical device manufacturers as well as taxes on high-income taxpayers. Some Republicans, including Sen. Bill Cassidy (R-LA), who is also a gastroenterologist, acknowledge the need for tax revenue to finance not only the transition period but also for whatever plan that replaces the ACA. Resolving both questions could spark conflict among Republicans, with conservative lawmakers calling for a repeal date no later than the 2018 mid-term elections. While conservatives want to eliminate all ACA taxes immediately, other GOP lawmakers want to keep for now some taxes whose repeal has generated bipartisan support – like those on high-cost insurance plans and medical devices – in an effort to keep Democrats involved in drafting a plan to replace the ACA.

GOP's ACA replacement still under development

While congressional Republicans work to finalize the mechanics for repealing the ACA, they face even more vexing questions – and intra-party squabbles – over the policy that will replace the healthcare law. Up until now, the Republican plan has centered mostly on expanding health savings accounts, tort reform and allowing insurers to sell policies nationally. But President-elect Trump and some GOP leaders said they support key ACA provisions like prohibiting insurers from denying coverage based on pre-existing conditions and permitting adult children to stay on their parents' plans. Many GOP lawmakers may be uncomfortable with some of the policy tradeoffs necessary to keep those popular ACA provisions. Key House and Senate committees will soon begin holding hearings and drafting legislation to piece together a replacement plan, but that process isn't likely to be quick or easy.

Obama to rally with Dems on ACA

Congressional Democrats know they don't have the votes to stop Republicans from repealing the ACA, but that doesn't mean they won't challenge the GOP every step of the way. President Obama will meet with House and Senate Democrats this week in an effort to fortify opposition to dismantling his signature legislative achievement.

House Democratic Leader Nancy Pelosi (D-CA) convened a conference Monday with her rank-and-file members urging them to focus on the ACA's popular features. Incoming Senate Minority Leader Chuck Schumer (D-NY) has said his party shouldn't give in to repeal efforts or help Republicans come up with a new plan.

For later in the month, Democrats plan rallies in several states to warn of Republican efforts to repeal the ACA and also change entitlement programs. Democrats hope to create political fissures between congressional leaders and President-elect Trump, who during last year's campaign came out against House Speaker Paul Ryan's plans to overhaul Medicare.

Democratic leaders face tough political obstacles in the months ahead, however. Senate Democrats are defending 25 seats in 2018, including those of 10 senators seeking re-election in states Trump won in November. Republican leaders believe some of those 10 senators can be persuaded to support their efforts to replace the ACA.

Walden, Neal among changes to key health panels

The House committees with legislative jurisdiction over healthcare regulatory and reimbursement policies will see new leaders in the 115th Congress.

Rep. Greg Walden (R-OR) will be the new chair of the Energy and Commerce Committee, which oversees the Food and Drug Administration and has legislative jurisdiction over Medicare Parts B and D. Walden is succeeding Rep. Fred Upton (R-MI), who was required to step down after serving six years as the chair because of GOP term-limit rules.

Rep. Richard Neal (D-MA) will be the top Democrat on the Ways and Means Committee, which oversees the Centers for Medicare & Medicaid Services and has legislative jurisdiction over Medicare Parts A and B. Neal won approval from Democrats after Rep. Xavier Becerra (D-CA) announced he would step down from Congress after being nominated by California Gov. Jerry Brown to be the state's attorney general.

The two committees will play critical roles not only on issues related to the ACA but also those involving children's healthcare programs and renewing industry user fees this year.

House leaders this week are expected to name the new chair of the Energy and Commerce Committee's health subcommittee. Leading candidates include Reps. John Shimkus (R-IL), Michael Burgess (R-TX) and Tim Murphy (R-PA). The current subcommittee chair, Rep. Joe Pitts (R-PA), did not seek re-election last year.

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