The Republican-controlled U.S. House and Senate have now each passed their own versions of a bill that would repeal key provisions of the Affordable Care Act, meaning if the House now approves the Senate’s amended version, Congress could send the bill to the White House—a first in the years-long battle against “Obamacare.”
Why the bill is a landmark in healthcare legislation
While the Obama administration has promised to veto the bill if it reaches his desk, Republicans call it a victory nonetheless to show Congress has overturned the healthcare law.
At its core, the measure would kill the law by repealing the federal government’s authority to operate health insurance exchanges, ending the subsidies that make plans more affordable, and ending the penalties against individuals who do not purchase insurance, and employers who do not provide it.
How it got here
The bill has highlighted divides not only along party lines, but within the Republican party, as conservatives and moderates struggled to find common ground over how far the bill should go and what issues it should encompass.
After the House passed one version of the bill, the Senate was forced to toughen its version when conservatives said the House version didn’t go far enough. Among the most divisive issues were whether to maintain a provision to defund Planned Parenthood and whether to add a provision to repeal Medicaid expansion, which has been adopted by 30 states, many of which are Republican-led.
The Senate succeeded in passing its version not only by catering to conservatives but by skipping its committee process and bringing it to the floor under budget reconciliation rules, which do not allow opponents to block legislation via filibuster.
The Senate was able to pass the legislation last week by a vote of 52-47, with Democrats unable to stop it.
The Senate’s version not only repeals Medicaid expansion, but also cuts funding for the Prevention and Public Health Fund and kills the risk adjustment programs intended to cushion health insurers. Among its other provisions, notes The Hill: It repeals the over-the-counter medicine tax, the prescription drug tax, an annual fee on health insurers and the tax on indoor tanning services. It reduces the threshold of healthcare costs that can be deducted from 10% to 7.5% of adjusted gross income.
Given the threat of veto, does it matter?
It may be more a question of when it will matter, suggests Dr. Adam Powell, healthcare economist and president of Payer+Provider Syndicate. “In isolation, I do not see much resulting from Congress's actions. However, it does create additional healthcare implications for the outcome of the 2016 election,” he says.
Powell suggests if the Republicans win the presidency while maintaining control of Congress, and sentiments towards the ACA remain the same, it’s likely the ACA will be overturned or modified in some form. “The 2015 repeal may serve as a tool which Republican candidates can use to encourage the election of a President who will not veto a future appeal,” Powell says.
He adds he does not predict the market will react strongly to Congress's current actions, but that if Congress does get a unified bill to the White House, it will be prudent to watch the polls as the election approaches to decide whether any changes in investments will be necessary.
“If the ACA is repealed and the repeal is not vetoed, it might most strongly impact the performance of Managed Medicaid stocks,” Powell says. “This would occur as a result of the withdrawal of the Medicaid expansion. Other payers might experience a more mixed impact.”
Sally C. Pipes, president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute, also believes the bill carries weight. “The gesture is not an empty one, even though President Obama will likely veto the bill,” Pipes says.
She suggests the action puts Congress in step with the American people, citing a recent Gallup poll indicating a majority (52%) of Americans now disapprove of Obamacare. While she sees it as a win for taxpayers, see notes it will be negative for health insurers due to the bill’s failure to extend the risk corridors program, and adds the debate over the bill proved negative for advocates of prescription drug importation, who failed to pass an amendment to permit the practice.