United States: Status Of The Affordable Care Act Repeal Efforts

Last Updated: January 31 2017
Article by Pamela Landman, Stephanie Marcantonio and Paul W. Mourning

Most Read Contributor in United States, August 2018

On January 20, 2017, Donald J. Trump became the 45th President of the United States. Consistent with his campaign promises to act swiftly to "repeal and replace" the Patient Protection and Affordable Care Act ("ACA") (Public Law 111-148) and as telegraphed by Vice President Mike Pence earlier this month, his first act as President was to execute an Executive Order intended "to minimize the unwarranted economic and regulatory burdens of the [ACA], and . . . to afford the States more flexibility and control to create a more free and open healthcare market."

Practical Implications of the Executive Order

While the Executive Order sends the message that dismantling the ACA is a top priority of the Trump Administration, the Executive Order, on its own, does not change the current law.

The Executive Order gives the regulatory agencies charged with enforcing the ACA, including the Department of Health and Human Service ("HHS") and the Department of Treasury, latitude to interpret the regulations promulgated under the ACA in a way which minimizes their impact, providing that "[t]o the maximum extent permitted by law, the Secretary of Health and Human Services (Secretary) and the heads of all other executive departments and agencies (agencies) with authorities and responsibilities under the Act shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications." Accordingly, the practical implications of the Executive Order will not be clear until such agencies take action. It is anticipated that pursuant to this Executive Order, such agencies will use their regulatory authority to lessen the impact of the "individual mandate," which requires that most Americans have "minimum essential coverage" through a health insurance plan or pay a fee, unless they qualify for financial hardship. Such potential actions may include expanding the financial hardship exemption or limiting or eliminating the enforcement of the fee.

Interstate Health Insurance Coverage

The Executive Order also provides that "[t]o the maximum extent permitted by law, the Secretary and the heads of all other executive departments and agencies with authorities and responsibilities under the Act, shall exercise all authority and discretion available to them to provide greater flexibility to States and cooperate with them in implementing healthcare programs." The Executive Order further provides that "[t]o the maximum extent permitted by law, the head of each department or agency with responsibilities relating to healthcare or health insurance shall encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers." While this language is consistent with President Trump's pledge to break down barriers to providing health insurance coverage across state lines, it is unclear what action will be taken to implement the pledge.

Budget Reconciliation: The First Step Towards Repeal

On January 12 and 13, 2017, prior to President Trump entering office, the Republican-controlled Congress took the first step toward repealing certain provisions of the ACA, voting to adopt a fiscal 2017 budget resolution (the "Budget Resolution") containing a "reconciliation directive" to House and Senate committees to prepare ACA repeal legislation by January 27, 2017.1 The Budget Resolution authorizes the implementation of legislation repealing portions of the ACA but does not affect the repeal of any provision of the ACA on its own. If such legislation passes both the House and the Senate, then the reconciliation measure will be presented to President Trump for signing.

The budget reconciliation process allows Congress to repeal provisions of the ACA that affect spending and revenue and avoids filibusters. Accordingly, many of the central aspects of the ACA that are budgetary, including the individual mandate, may be repealed by the vote of only a simple majority in the Senate. A full repeal, and any comprehensive replacement legislation outside the budget reconciliation process, would require 60 votes in the Senate, necessitating Democratic support. Because the Budget Resolution did not identify specific provisions of the ACA for repeal, the details of the legislation will not be known until the committees present their proposals.

Budget Reconciliation: Existing Precedent

Importantly, in 2016, Congress unsuccessfully attempted to undo portions of the ACA using budget reconciliation.2 That bill, which passed both houses of Congress but was vetoed by President Obama, would have eliminated: (i) the expansion of Medicaid coverage for adults up to 133 percent of the federal poverty level, (ii) subsidies for middle-income Americans to buy insurance in the state marketplaces, (iii) tax penalties for the uninsured,3 and (iv) many of the taxes created to fund the ACA program, including the excise tax on high-cost health care known as the "Cadillac" tax. It is possible that the repeal legislation proposed in response to the reconciliation directive will mirror the legislation proposed in 2016.

Takeaways

The recent actions by both President Trump and Congress make it clear that they intend to focus on the promised "repeal and replacement" of the ACA early on in the Administration. However, none of the actions taken to date has changed the current law. We continue to believe that a full repeal of such legislation is unlikely and any changes likely will be phased in over time. This is due in part, to the complexity of drafting an alternative that addresses the concerns of individual consumers, health care providers, and insurance companies. The Congressional Budget Office released a report on January 17, 2017, finding that if Congress repeals the mandate penalties while retaining popular market reforms applicable to health insurers, then 18 million people could lose their insurance within a year and individual insurance premiums will increase. The report further provides that if no replacement is enacted, 32 million people could lose their health insurance by 2026, and premiums in the individual insurance market could double.

We will continue to monitor changes in legislation or agency rulemakings and policies that will impact the health care marketplace.

Footnotes

1. We note that there is speculation this date may change due to pressure from both Republicans and Democrats to have a workable replacement to the ACA prior to the repeal of any portion of the law.

2. H.R. 3762, 114th Cong. (2016).

3. While not a repeal of the "individual mandate" and the "employer mandate," the bill eliminated the penalties associated with non-compliance.

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
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
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