NCPA - National Center for Policy Analysis

Obama Just Partially Repealed Obamacare, Proving Republicans Can Succeed

December 27, 2016

Senior Fellow John R. Graham writes at NCPA's Health blog. A version of this Health Alert was published by Forbes.

Since the election, there has been a lot of sturm und drang around what the alternative to Obamacare will look like. It looks like we can be highly confident the Republican-majority Congress will repeal Obamacare very quickly starting in January. However, there is some question about what exactly will be repealed.

Last year's repeal bill, H.R. 3762, repealed Obamacare's spending and taxes, but not its over regulation of health insurance. Further, Republican politicians have promised not only to repeal Obamacare, but replace it with a better payment system than existed previously. People's primary concern about the previous system was that people in the individual market could be denied coverage for pre-existing conditions or charged higher premiums as a result of underwriting.

Politically, it would not be possible for Republicans to walk back from this commitment. According to the Kaiser Family Foundation\'s November tracking poll:

Among those who want to see the ACA repealed, 38 percent (meaning 10 percent of the public overall) change their opinion after hearing the argument made by proponents that repealing the ACA would mean that insurance companies would be able to deny coverage to people with pre-existing conditions.

Trump voters react similarly, with a larger share changing their opinion after hearing that repealing the ACA would mean that insurance companies would be able to deny coverage to people with pre-existing conditions (27 percent) than changing their opinion after hearing that more than 20 million Americans could lose their coverage (8 percent).

The economics of health insurance make this very difficult to achieve without some sort of mandate or penalty for not maintaining coverage, which is politically unpopular -- and especially toxic to Republicans. This poses a challenge; and we all know Republican politicians have promised to solve this for six years without result. Fortunately, we also have recent evidence that Republicans can lead and succeed on complex health reform legislation.

Way back on September 22, I encouraged President Obama to exercise leadership to ensure the passage of the 21st Century Cures Act, a law which fundamentally reforms the Food and Drug Administration by allowing new research methods and statistical analyses that will speed drugs to patients (as I described in a previous column).

President Obama never really did provide leadership, but he got on the train before it ran off the rails and waved from the caboose when it finally reached its destination, signing the bill on December 13. In a gracious and heartfelt speech, he awkwardly attempted to connect the 21st Century Cures Act to the 2010 Affordable Care Act, which gave us Obamacare.

Nothing could be further from the truth: The Affordable Care Act was rammed through Congress on a highly partisan basis before the politicians even read it. The 21st Century Cures Act originated with Representative Frank Upton (R-MI) Chairman of the House Energy & Commerce Committee. As far back as April 2014, Rep. Upton collaborated with his Democratic counterpart, Rep. Diana DeGette (D-CO) on a commitment to develop broad-based, bipartisan legislation to advance medical innovation.

For one year, the Energy & Commerce Committee travelled the country, openly gathering input from scientists, patients, and others. By May 2015, the Committee had written the bill and voted unanimously (51-0) to advance it bill to the House floor.

Because of this transparency and deliberation, the final version of the bill passed the Senate 94-5 and the House 392-26. Of course, any legislation that gets so many votes will likely have picked up some unattractive elements along the way, and the 21st Century Cures Act is no exception.

One conservative activist group labelled the bill a "Christmas tree," festooned with ornaments and presents scattered underneath it. I have previously criticized gimmickry in the bill's financing. Nevertheless, the bill's spending component is just $6.3 billion over ten years on research committed to three areas: The National Institutes of Health, the Cancer Moonshot, and the opioid epidemic.

These are hardly hills for a fiscal conservative to die on. Further, the bill makes two big steps towards repealing Obamacare. It is largely paid for by repealing $3.5 billion of Obamacare spending on a poorly defined "Public Health and Prevention Fund." Republicans also managed to add an important improvement in Health Reimbursement Arrangements (HRAs) to the bill. Small employers' contributions to workers' HRAs will be exempt from Obamacare's burdensome regulations.

The passage of the 21st Century Cures act is a very good sign for Republican leadership on post-Obamacare health reform.

 

Browse more articles on Health Issues