Repeal Efforts Fail (for now): Can Obamacare Survive?

Posted by and on March 28, 2017

With the House GOP pulling the American Health Care Act (AHCA) due to lack of sufficient support even within its own party, Obamacare is not out of the woods.

The ACA’s two pillars, the individual marketplaces and Medicaid expansion, remain vulnerable and could be used as political bargaining chips in Washington as the battle over “health care reform” plays out in the coming months and years.

In response to the House’s failure to pass the AHCA, the President and House Speaker have expressly said that Obamacare will “implode” and the administration has many ways to see to it that it does sooner rather than later. On the other hand, the administration and Congress could also move on to on tax reform and other items while changes to the marketplaces are implemented by regulation.  The administration already has proposed regulations on the table that has been characterized as a “good faith” effort to implement minor changes to prop up the marketplaces. Reportedly, however, many insurers will want more in the form of funding for cost sharing reductions and reinsurance to keep sufficient numbers of insurers in the marketplaces long term. 

At this point it’s unclear whether there will be real legislative or regulatory efforts to keep the marketplaces afloat or whether efforts will be made to hasten their demise. It is also unclear as to which of the two contingencies that helped defeat the AHCA the administration will turn if legislative action becomes necessary to avoid an outright collapse or languishing of marketplaces that aren’t viable: the more conservative House Republicans, who may insist on the elimination or rollback or Medicaid expansion as their price of cooperation; or the House Democrats. As evidenced by the President’s willingness to single out the House Freedom Caucus for the AHCA’s downfall and statements that he is moving on to other issues like tax reform over the weekend, the President may approach this issue more pragmatically than ideologically leaving open many possibilities and options. The next several months will be very telling and we will be following developments closely.

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