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Obamacare in the Cross Hairs — but Procedural Hurdles Loom

President-elect Trump and congressional Republicans have promised to “repeal and replace” the Affordable Care Act (ACA), but there is deep division regarding which provisions will be rescinded and around the details of the replacement and the length of any transition period.

Last week the U.S. House and U.S. Senate took the first steps toward achieving repeal by passing a budget resolution with reconciliation instructions related to ACA repeal. The reconciliation process allows the Senate to bypass a filibuster and pass legislation with a simple majority. However, only budget-impacted provisions of the ACA can be repealed this way. Further, this year’s budget resolution stipulates that changes must save $1 billion over a ten-year period to be enacted through reconciliation.   While the budget resolution calls for committees to develop language to achieve this by January 27, it may take much longer given the complexity around repeal and replace.

Capitol Hill

The policy stakes are extremely high, not only because millions of Americans stand to lose coverage if the exchanges and Medicaid expansion are eliminated with no replacement, but also because developing a newly designed system which will inevitably pit health care stakeholders against one another creates significant political ramifications.

While the situation remains fluid, there are a few issues we are watching in the first few weeks of a Trump presidency.

Rolling Back Regulations

Congressional Republicans can also use the appropriations process to de-fund certain parts of the ACA, and President-elect Trump may modify portions of the law by Executive Order. This would jeopardize regulatory actions taken by President Obama, including pilot programs created by the ACA and developed within the Center for Medicare and Medicaid Innovation, which Republicans have accused of exceeding its authority. Other health-related regulations, particularly those finalized in the weeks following the election, may also be on the chopping block.

Carryover of ACA Provisions

While the GOP targets what it believes to be the ACA’s most onerous provisions, many popular insurance reforms — including the prohibition on denials of coverage for pre-existing conditions — are likely to survive. President-elect Trump has voiced support for maintaining some of these so-called insurance reforms, but some Republicans argue that their elimination would give insurers more flexibility in setting prices. Keeping those requirements intact without a coverage mandate would cause severe market disruption.

HHS Confirmation

Mr. Trump’s pick of Representative Tom Price (R-GA) faced severe scrutiny during a courtesy hearing before the Senate Health, Education, Labor and Pensions Committee on January 18. He must clear the Senate Finance Committee, which he will face on January 24, before proceeding to a vote on the Senate floor to secure his confirmation.

Rep. Lamar Alexander (R-TN), chairman of the Senath Health, Education, Labor and Pensions Committee, indicated the Senate  wouldn’t officially confirm Price until mid to late February, so it is unlikely there will be significant legislative movement until March.

Other “Must Pass” Health Care Legislation

While there is a strong impetus to address the ACA, it is not the only game in town. Key health priorities include reauthorizing the Children’s Health Insurance Program (CHIP), set to expire this year. CHIP enjoys bi-partisan support and no one wants to risk getting caught in the political blowback if it is allowed to lapse. While CHIP was not part of the ACA, its reauthorization could get tied up with ACA-related measures, either attached as amendments or following in subsequent bills.

Uncertainty Surrounding Drug Prices

Contrary to what Wall Street and the pharmaceutical industry believed would happen in the wake of the presidential election, President-elect Trump said last week that drug companies were “getting away with murder,” and that the United States — the largest buyer of drugs in the world — doesn’t “bid properly, and we’re going to save billions of dollars.”

The statements roiled markets and stand in stark contrast to the historical position of his party, which has been a reliable ally of the pharmaceutical industry. We will be watching closely to see how he and majority leadership will reconcile their views on drug pricing, if at all.

© 2020 Foley & Lardner LLP

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About this Author

Dennis A. Cardoza, public affairs director, Foley Lardner, law firm
Director, Public Affairs

Dennis A. Cardoza is a public affairs director, co-chair of the Federal Public Affairs Practice and chair of the California Public Affairs Practice of Foley & Lardner LLP. He advises a broad range of clients on legislative, regulatory, and public policy and advocacy matters, and has extensive policy experience with respect to water resource, banking, housing, infrastructure, energy, agriculture, education, foreign affairs, and health care issues.

202-295-4015
Scott Klug, Folry Lardner Law Firm, Public Affairs Attorney
Director

Scott Klug is a public affairs director and co-chair of the Federal Public Affairs Practice at the national law firm of Foley & Lardner LLP. The former Congressman represents a broad array of Foley’s clients in Washington and several state capitals. He is also able to draw on 15 years of experience as an Emmy Award-winning television reporter to help clients craft proactive media strategies particularly when faced with crisis management challenges.

For eight years, Mr. Klug represented Madison, Wisconsin in the U.S. Congress, where he developed an expertise in health care, insurance, financial services, telecommunications and energy policy. He maintains strong relationships with key Administration figures, as well as House and Senate leadership.

608-258-4762
Jennifer F. Walsh, public affairs director, Foley law firm
Director, Public Affairs

Jennifer F. Walsh is a public affairs director with Foley & Lardner LLP. She has extensive experience in government affairs, including a lengthy career as a senior staffer in the U.S. Congress and the California Legislature, and as a vice president for Federal Government Affairs at a top 20 Fortune 500 health care company. Ms. Walsh has effectively advanced key issues before the United States Senate, House of Representatives and the Administration. She is a member of the firm’s Government & Public Policy Practice.

202-295-4762