While Sec. Price is just settling into his new office, Congress has already begun the process of undoing the law. Under a process titled budget reconciliation, the Senate and House passed a resolution directing the respective chambers to develop legislation that is linked to the passage of the budget. Although Congress, together with the president’s signature, can’t change the language of the ACA that is purely “policy” without being subject to the possibility of a filibuster in the Senate, they can effectively defund the program by changing the budget. Under the Congressional Budget Act of 1974, the Senate can pass, with only a simple majority and limited debate, legislation that can be used to change laws that are scored by the Congressional Budget Office (CBO), which is essentially anything that costs money or is implemented as a tax. Although the budget reconciliation process seems somewhat undemocratic, it was this same process that the Democrats utilized in 2010 to fund certain aspects of the ACA.

What will “replace” look like? The president’s health care reform plan included a number of policies, in addition to the “complete repeal of Obamacare.” Those include:

• Modify laws that inhibit the sale of insurance across state lines.
• Allow individuals to fully deduct health insurance premiums from tax returns.
• Allow individuals to use health savings accounts (HSAs) without annual limits.
• Block-grant Medicaid to the states (see below).

House Speaker Paul Ryan released his vision for addressing the issues facing the country in his “A Better Way” agenda in June 2016. “A Better Way to Fix Health Care” is a 30-page document within the agenda where Ryan lays out his key policy cornerstones for health care reform, including:

• Provide a refundable tax credit for people without access to employer-sponsored coverage.
• Expand the use of HSAs.
• Allow sales across state lines.
• Protect patients with preexisting conditions and allow dependent coverage up to age 26.
• Empower states to design Medicaid programs “that best meet their needs.”
• Give future Medicare beneficiaries (starting in 2024) the option to choose private plans versus traditional Medicare.

Clearly, the president’s and the speaker’s approaches share some common themes about a comprehensive “replace” package. Republican leaders have talked about creating a “health care backpack” concept that would allow people to carry different components of coverage throughout their lives depending upon their age or their personal circumstances. It is unclear how the process of crafting a bill will actually occur as many Republicans want a quick replacement and others are calling for a more measured approach with perhaps a delay component built in to prevent a decrease in the number of insured Americans as the ACA is defunded.

Medicaid Reform

Today, Medicaid provides insurance coverage to more than 70 million Americans and costs more than $530 billion, representing approximately 13 percent of the federal budget. Approximately 11 million Medicaid recipients are people who were covered under the Medicaid expansion program of the ACA. Aside from the broader expansion of health care coverage under the ACA, Medicaid expansion significantly changed the health care delivery landscape in the United States. Under the expansion program, 31 states and the District of Columbia opted in. The incentive was that the federal government would pay 100 percent of the additional cost to cover these newly eligible individuals from 2014 to 2016, 95 percent from 2017 to 2019, and a fixed level of 90 percent by 2020. For emergency medicine, having more patients insured is an improvement both from a professional fee perspective and in providing a greater opportunity for follow-up care after an emergency department visit. What would happen to those extra payments under an ACA repeal? Would states be on the hook to continue coverage, or would they have to cut people from their Medicaid roles? Another challenge for repeal would be reconciling reductions in payments to hospitals occurring as part of the changes to the disproportionate share hospital (DSH) payments. Under the ACA, hospitals are scheduled to see a reduction in these payments of more than $17 billion. Would these payments return to pre-ACA levels or some other amount by a newly defined formula?