This post was written by Lawrence O. Gostin, Faculty Director of the O’Neill Institute. and was originally published in the JAMA Forum on October 18, 2012.
The “Repeal and Replace” Strategy
Romney’s preferred strategy to repeal and replace the ACA would undoubtedly rely on a parliamentary tactic called the budget reconciliation process, the very method by which the Democratic-controlled Congress enacted the ACA.
Throughout most of the passage of the ACA, the Democrats held a filibuster-proof majority. By the time Democratic Senator Edward Kennedy of Massachusetts died in August 2009 and a by-election was held the following January to replace him, the ACA had passed both Houses of Congress. But the House and Senate versions were very different. After the election of Republican Scott Brown to Kennedy’s vacant Senate seat, the Democrats lost their supermajority, and the only way the bill could reach President Obama’s desk was through the budget reconciliation process. And that is what transpired: the ACA passed without a single Republican vote. Although Republicans denounced this parliamentary maneuver, they used it themselves to enact the Medicare drug benefit. For Romney, budget reconciliation would be the only feasible way to repeal the ACA.
Overturning Obamacare would require Romney to win the presidency, with Republicans holding the House and achieving majority status in the Senate. The GOP, which now holds 47 seats in the Senate, would be highly unlikely to gain the 60 Senate votes needed to repeal the law against an all-but-certain Democratic filibuster. With most of the ACA’s popular provisions beginning in 2014—for example, the provisions that require insurers to offer coverage to applicants without regard to preexisting conditions (guaranteed issue) and that prohibit insurers from charging sick people more than healthy ones (community rating)—the GOP’s most likely window of opportunity would be in a President Romney’s first 12 months in office. Given the “honeymoon” period of newly elected Presidents, Romney could try to repeal and replace the ACA within his first 100 days in office.
The Budget Reconciliation Process
Congress enacted the budget reconciliation procedure in the Congressional Budget Act of 1974 to enable it to “even out” revenue and expenditures to meet fiscal objectives in the budget resolution. Reconciliation is a 2-stage process in which Congress first adopts a budget resolution, providing “reconciliation instructions” to appropriate committees. Congress then passes budget reconciliation legislation to achieve the desired budgetary outcomes—“reconciling” current revenues and spending with the budget resolution’s targets. Neither the resolution nor the resulting legislative package can be filibustered in the Senate.
For a Republican-controlled Congress to succeed using the budget reconciliation process, all aspects of the law must have a direct—not merely incidental—effect on federal revenue or spending. The law would have to overcome Democratic challenges under the so-called Byrd rule, which calls for the Senate Parliamentarian to determine whether provisions of the bill are “extraneous” to budget targets. The definitions of “extraneous” are highly complex; much would depend on the Parliamentarian’s interpretations, which would be highly contested terrain.
Certainly, the ACA has major fiscal effects, but the 2000-plus–page legislation also has considerable content designed to improve health beyond cost, such as defined benefits, public health, and higher-quality services. Its many provisions to widen access are intended to expand coverage and ensure greater equity (for example, allowing young adults up to the age of 26 years to be covered by their parents’ policies and prohibiting lifetime coverage caps). Moreover, the fiscal effect appears to be positive, with the Congressional Budget Office scoring the ACA as saving $109 billion. Nor could the Republicans use reconciliation to advance a social agenda, such as banning abortion funding, because of previous rulings that the budget effect of such action is incidental.
“It was not an easy process to design reconciliation to finish health reform,” Timothy Westmoreland, JD, a former senior congressional aide, told me earlier this week. “But it was made immeasurably easier by having a law first pass both Houses and then using reconciliation to amend only a small part of the ACA. Many provisions that would not have survived under the Byrd rule were in the underlying ACA, not part of the reconciliation amendments.” What the Republicans would have to demonstrate if they used reconciliation to repeal the ACA seems daunting—that all its provisions have direct budgetary effects.
The “Replace” Strategy
Romney’s “replace” strategy would also face political barriers. Most of his “fixes” rely on market forces (such as higher deductibles, co-payments, and competition) or limit coverage (such as converting Medicaid to a block grant) and would provoke key Democratic opposition. Romney would even have problems gaining approval for provisions with which both parties agree, such as guaranteed issue, because banning preexisting condition exclusions, among other popular provisions, would be very expensive and narrow the risk pool. The ACA’s answer was to mandate individual coverage, but Romney deeply opposes this idea as a Federal requirement, even though his Massachusetts reform does precisely that. He would have to convince Congress that market-based solutions alone could pay for these popular provisions—again unlikely.
The “Refusal to Implement” Strategy
Beyond “repeal and replace,” a Romney Administration might refuse to implement vital ACA provisions and Congress might refuse to fund them. This poses constitutional challenges, so it would open a flood of litigation, with the Supreme Court offering no clear direction on the likely outcome. The “Take Care” clause of the Constitution requires the President to “take care that the laws be faithfully executed,” even if he disagrees with a law’s policy direction.
There is a raging debate in constitutional law circles about whether Congress and the President have independent duties to construe the constitutionality of legislation. However, with the Supreme Court so recently upholding the ACA, Romney would most likely be motivated by policy, not constitutional, objections to the ACA. The Supreme Court has not had the occasion to give clear guidance on what exactly the “faithfully execute” clause means in practice, so the outcome of litigation is uncertain. Judicial review would likely hinge on how aggressively a Romney Administration would block the ACA’s implementation.
Although a President Romney would have no authority to entirely suspend the ACA’s enforcement, he would possess wide discretion in its implementation. He could, for example, delay or block vital regulations, such those involved in establishing state insurance exchanges or providing tax credits for lower-income Americans to purchase health insurance. Or he might ask the Internal Revenue Service not to make collection of the individual mandate’s “tax penalty” a priority—much in the way President Obama instructed his Administration not to deport nonviolent illegal immigrants. Even these measures, however, would likely trigger litigation over whether the President has powers to interfere with a democratically enacted statute.
The future of fundamental health care reform rests firmly on the results of the November election. But even if Romney is elected President with a Republican congressional majority, the pathways to “repeal and replace,” or even “refusal to implement,” remain convoluted—with major political and constitutional obstacles standing in the way.