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Life After Obamacare – Part I

Life After Obamacare – Part I

Health Care Law Note
(November 14, 2016)

Only days after the 2016 presidential election upset, the healthcare industry is coping with the uncertainty of a new administration, especially in light of the President-Elect’s repeated pledges to repeal and replace the Patient Protection and Affordable Care Act (“PPACA” or “Obamacare”).

The full implications of a repeal will touch every corner of healthcare in the States, and those implications will evolve and become clearer in the coming months. In the meantime, this article is the first of a multi-part series anticipating what repeal might look like, and how it would affect healthcare providers.  

Part I – Partial vs. Full Repeal

Regardless of campaign rhetoric, a sudden, outright repeal of PPACA seems unlikely. Without a 60-vote supermajority in the senate, a full repeal bill could be blocked by filibuster. Moreover, simply repealing the law midway through the 2017 coverage period without a transition period or provision for a delayed effective date would create chaos and potentially strip millions of ACA plan members of coverage overnight, while reviving insurers’ ability to decline to insure those with pre-existing conditions or other risk factors. It would also potentially deny Medicaid coverage to millions in states where Medicaid was expanded since 2014. In fact, the Wall Street Journal reported Sunday, November 13 that Mr. Trump said in his first post-election interview that, while he prioritized moving quickly on Obamacare, he would consider leaving some parts of the law intact and that he liked certain provisions of the law.

However, a partial repeal with provisions to “fix” problems with Obamacare (including the exodus of commercial insurers from ACA exchanges and surges in Exchange plan premiums) may be practically impossible. PPACA is an enormously complex statute built on numerous interrelated provisions, such as tax penalties on uninsured individuals, the employer mandate and premium subsidies to help increase the healthy insured population and thereby support the guaranteed issue requirements and rating rules that prohibit insurers from discriminating based on enrollees’ health status. An attempt to overhaul PPACA to address these issues would take many months and would likely be seen as a failure to live up to campaign promises.

As a result, the new administration will likely propose a bill to repeal PPACA in its entirety, with a delayed effective date of a year or more, to buy time to design a politically acceptable substitute that salvages some of the more popular provisions.

Marcus C. Hewitt
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