IE 11 is not supported. For an optimal experience visit our site on another browser.

Replacing Obamacare Will Be Difficult, Repealing It Could Be Just As Hard

Republicans have had practice passing a repeal of Obamacare before but this time it's serious and the hurdles are real.
Image: Members of 115th Congress are sworn into office at the U.S. Capitol
Members of the 115th session of Congress are sworn into office on the House floor of the U.S. Capitol in Washington, on Jan. 3, 2017.MICHAEL REYNOLDS / EPA

President Obama will huddle with Congressional Democrats Wednesday morning to help plot the political defense of his signature health care law while Vice President-elect Mike Pence meets with GOP members to rally his party around efforts to dispose of it.

But the battle really began in earnest on Tuesday when Republicans made the first move to undo the Affordable Care Act through a Senate budget resolution, beginning their long, complicated journey to repealing and replacing the Democrats’ signature achievement.

The Senate Budget Committee's resolution, which starts a two-step process known as reconciliation, directs two committees in the House of Representatives and two committees in the Senate to do the hard work of writing the language that repeals the bill.

Related: The Fight Begins to Destroy — or Save — Obamacare

But even just repealing the massive bill is proving onerous as Republicans debate the merits of doing so without a replacement ready.

House Republicans have a lot of practice repealing the law, but have never had to deal with what might come next. They passed a repeal of Obamacare more than 60 times over the last six years, including one proposal that is said to be the framework for the current effort that reached Obama’s desk in 2015. He vetoed it.

President-elect Donald Trump went on a Tuesday morning Twitter rant blaming Democrats for the Obamacare failures.

Now, however, with a Republican president about to assume the Oval Office, any legislation they pass will have real-world consequences. They must consider the 20 million people who have gained insurance through the ACA, business interests of the health care industry and the impact any changes will have on the economy. In addition, Republican leaders have to balance the economic impact with the demands of their members who span the conservative ideological spectrum.

Fractures are already forming around the timeline for replacement, the tax components that have raised billions of dollars and how far-reaching the scope of the repeal should be — all elements that must be addressed in the repeal legislation.

Members of the House Freedom Caucus, including its leader, Rep. Mark Meadows of North Carolina, are insistent on the timeline, threatening to vote against any replacement if it is not guaranteed before the midterm elections in 2018.

“It would have to be an unbelievable, compelling case to suggest we need more than two years to repeal and replace the Affordable Care Act,” Meadows said Tuesday.

Some Republicans have indicated that a replacement could take up to four years after repeal to legislate and implement a plan.

But if the 40 members of the conservative Freedom Caucus voted against a repeal, Republican leadership would fall far short of the majority they need to pass it. And Meadows and conservative members know their strength lies in their numbers.

Taxes also make the repeal process more fraught. Republicans, who generally dislike any tax increase, are finding that the increase in taxes used to pay for the ACA, including the Medicaid expansion and the subsidies for lower-income people to buy insurance, has raised a significant amount of money to pay for health care. A complete repeal of all tax increases would leave little money to pay for a GOP alternative.

Meadows indicated that’s another deal breaker.

“If we’re going to repeal it, we need to repeal the taxes,” Meadows said.

But Joe Antos, health policy expert at the right-leaning American Enterprise Institute, said that repealing all of the taxes will be politically difficult and structurally problematic.

For instance, he said, Republicans will have an optics problems if they unwind the tax on high-income earners making more than $200,000 per year while taking away lower-income people’s health insurance.

“They can’t afford to drop that unless they can afford to come up with that money,” Antos said of the tax that is estimated to raise $123 billion over ten years. “Whatever they do to replace they’re going to need some money.”

The U.S. Chamber of Commerce and the health insurance industry’s trade association, American Health Insurance Plans, or AHIP, have separately gone on the offensive to ensure that a $100 billion tax on the health insurance industry is included in any repeal.

AHIP President Marilyn Tavenner wrote and op-ed outlining their demands, including a repeal of the tax. The Chamber released a “robust print and digital advertising” effort Tuesday on the issue and are also pressuring Congress to repeal the unpopular medical devise tax and the Cadillac tax on expensive and expansive health plans.

“We don’t want to run any risk that someone looks at the health insurance tax or the Cadillac tax and says, ‘those don’t take effect until 2018 and 2020, we can deal them later,’” said Blair Holmes, spokeswoman for the Chamber of Commerce.

Related: Five Things You May Not Know About Obamacare

Finally, the scope of repeal is causing tension among Republicans. Republicans in the House, backed by the conservative Heritage Foundation, say that repeal can include more than just the financial components that pay for the Affordable Care Act, bucking Senate Republicans who say that Senate rules will block any effort that goes beyond taxes and revenues. It's a delicate line that can't be crossed.

The Heritage Foundation insists that a repeal could go beyond the revenue components of the bill and could also include an undoing of the mandates that require people to purchase insurance and medium and large businesses to provide it for their employees - a central component to Obamacare.

Daniel Holler, vice president of communications at Heritage Action, argues that repeal can be comprehensive.

“We have made the argument that the entire Obamacare can be repealed through reconciliation,” Holler said.

And some Republicans are cautioning against a repeal without a replacement. Sen. Susan Collins, R-Maine, said she has “a number of reservations” and that she’d prefer a replacement be passed along side repeal - a notion that many Republicans have said isn't possible.

Sen. Rand Paul, R-Kentucky, has come out in favor of a simultaneous replacement. He wrote an op-ed saying Tuesday strongly pushing for the repeal of the ACA, saying, “As we repeal Obamacare, we would be wise to vote on its replacement at the same time,” he wrote on Rare.

Heritage Foundation’s president, Jim DeMint, issued a warning to Republicans getting cold feet about repeal, saying there are “no excuses.”

A Republican president “doesn’t mean we won’t see foot-dragging from some in Congress. When I was in the Senate, they would use every excuse to avoid fighting for conservative priorities,” DeMint, the former senator from South Carolina, wrote.