The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Repealing Obamacare - Is It Doable?

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On January 6, the 114th Congress convened and is now under Republican control, with 54 senators out of 100 in the Senate and 246 representatives out of 435 in the House.  One of the major Republican campaign promises was the full repeal of the Affordable Care Act (ACA), more often referred to as ObamaCare.  But can it be done?

A  January 3-5 2015 Rasmussen poll revealed that 49 percent of voters do not approve of ObamaCare.  A Fox News December 2014 poll showed disapproval at 58 percent and a November 2014 Gallup poll found 56 percent disapproval.  According to Real Clear Politics, which averages several polls, ObamaCare has never enjoyed an approval rating greater than 43 percent.  It would seem the Republican Congress has the support of the majority of American people in dismantling ObamaCare or at minimum, enacting drastic reforms.  But voters will have to weigh in with their elected congressional representatives on a continuing basis to get the President to agree to any substantial changes to ObamaCare or convince a veto-proof majority to do so.

Voters that dislike ObamaCare must face the reality that Senate Democrats control 46 seats (including two independents that caucus with them) and President Obama will reign in the White House for the next two years.  ObamaCare is their hallmark legislation and they will not allow it to go quietly into the night.  While the House will be able to pass bills, it will take 60 votes to override any filibuster in the Senate.  Thus, Senate Republicans will need to find six Democrats to support nearly all of the legislation they consider.  That will be tough under any circumstances, particularly challenging ObamaCare.

At a joint Senate and House Republican retreat held in Hershey, Pennsylvania, there were plenty of discussions on an ObamaCare legislative plan for 2015.  Repealing certain aspects of ObamaCare was on the agenda, as well as how to deal with a pending Supreme Court decision in King v. Burwell concerning government subsidies.

A budget process known as reconciliation could be used to eliminate large parts if not all of ObamaCare.  This process was considered by Republicans before the 2012 election, hoping they would have a Republican president that would sign the bill.  Using this procedure requires only 51 votes in the Senate, which Republicans can easily reach on their own.  Ironically, reconciliation was also used in 2010 to get the Health Care and Education Reconciliation Act passed, which amended portions of the Affordable Care Act, squashing the promise by newly-elected Sen. Scott Brown (R-Mass.) to stop ObamaCare in its tracks.

The House and Senate would first have to pass a budget resolution that contained reconciliation instructions.  Reconciliation can be used to make changes to spending and taxing measures in ObamaCare, so long as doing so would not add to the debt.  The likely result is large portions of the law could collapse.  However, reconciliation can be used only once in a year and some Republicans would rather use the process for tax reform, an issue in which President Obama has expressed interest.

While the Republican-controlled Senate and House might be able to get ObamaCare repeal legislation to the President’s desk, he would veto the legislation.  A veto can be overridden, but that would take a 2/3 majority of members present in both the Senate and House.  If all members are present, that means 67 votes in the Senate and 290 votes in the House.  With those kinds of numbers, it is easy to understand why less than 10 percent of presidential vetoes have been overridden.  Unless millions of Americans make known to their elected officials that they should support a veto override or lose their jobs in the 2016 election, it is unlikely an override will be successful.  Conversely, if the president does nothing within 10 days of receiving a bill, excluding Sundays, and as long as Congress remains in session, any bill can become law.  However, there is no scenario under which President Obama will allow that to happen on an ObamaCare repeal bill.

Another option is to use appropriations bills, must-pass spending legislation that keeps the government operating, to get some changes signed into law.  Both legislative bodies have promised regular order in considering these bills, which means passing each of the 12 appropriations bills separately instead of one large bill, like the cromnibus bill that passed the Congress on December 13, 2014.  Since Congress cannot use authorizing language in a spending bill, appropriation committees would utilize language such as “none of the funds shall be used to enforce” a particular provision in ObamaCare.  The Senate would still need 60 votes to avoid a filibuster and pass such a bill.  The President would have to decide to either to sign the spending bill into law or shut down parts of the government.

The attack on ObamaCare has already begun.  On January 8, 2015, the House passed H.R. 30, the Save American Workers Act of 2015, by a vote of 252-172, which would change the definition of "full-time employee" under ACA from 30 hours to 40 hours.  The legislation has been sent to the Senate for consideration.

Citizens Against Government Waste (CAGW), along with many others, believe this legislation will do little to help employees or employers.  In fact, it may cause employers to simply drop the number of hours an employee works to 39 to avoid the ObamaCare mandate.  CAGW thinks it is better to eliminate the employer mandate entirely.

Legislation that is most likely to pass and become law are proposals that have strong support from Democrats.  Listed here are some other provisions of ObamaCare that fit that criteria:

Elimination of IPAB:  The Independent Payment Advisory Board (IPAB) has been panned by many members of Congress and particularly by the House.  The House rules for the 114th Congress contain a provision that bans appointments to its board.  IPAB has been referred to as the “death panel.”

IPAB’s purpose is to prevent Medicare spending from growing beyond a certain target.  If it does, then IPAB must cut payments to providers.  If IPAB should fail to come up with a proposal to reduce spending, then it is up to the Secretary of Health and Human Services to create such a plan.  While the law states IPAB cannot ration care, if payments are drastically cut to providers, they will have to limit the number of Medicare patients they treat.  That is rationing by another method.

Members of both parties have sponsored legislation in the past to repeal IPAB because it takes away Congress’s prerogative in controlling Medicare spending and turns it over to an “independent” and unelected 15-member board appointed by the president.  Furthermore, there is no judicial review allowed.  IPAB’s recommendations automatically become law unless Congress can come up with an alternative spending measure within a limited time frame that achieves the same spending reduction.

Senator John Cornyn (R-Texas) has introduced S. 141, which would repeal IPAB.  Since the President has yet to appoint any members to the controversial board, eliminating IPAB may be possible in the 114th Congress. 

Elimination of the Employer Mandate:  The employer mandate has been delayed in several aspects already.  Midsized employers, those that hire between 50 and 99 employees, are not required to comply with that ObamaCare requirement until 2016.  Employers with 100 or more employees must comply in 2015, but instead of providing insurance to 95 percent of their employees, they only need to provide it to 70 percent of their full-time workers.

Republican members would like to repeal the employer mandate.  Many left-of-center policy advocates are loosening their support for the mandate, such as former White House Press Secretary Robert Gibbs and experts at the Urban Institute.  Larry Kudlow, a former associate director for economics and planning during President Reagan’s first term and a well-known free-market economist and columnist said “Obamacare has been a substantial job killer” and that a lot of the “part-time business can be traced to Obamacare.”  Senate Majority Leader Mitch McConnell (R-Ky.) agrees with this assessment, as does Speaker John Boehner (R-Ohio).

The mandate kicks in for large employers in 2015.  The Washington Times reported on December 31, 2014 that while the “first days of implementation should pass without much notice … human resources departments will grapple with IRS reporting requirements from day one to document their compliance and avoid tax penalties, a task that can get Byzantine and expensive for companies with lots of part-time workers and seasonal workers, who add up to full-time ‘equivalents.’”

Expect a vote on repealing this mandate.

Elimination of the Individual Mandate:  Since the day ObamaCare was passed, conservatives and libertarians have loathed the individual mandate.  They see it as an affront to freedom because the law allows the federal government to force Americans, for the first time, to purchase a product or pay a fine. 

After the Obama administration made numerous administrative changes to the individual mandate requirements after the botched October 2013 rollout, the House voted 250-160 in March 2014 favor of H.R. 4118, the SIMPLE Fairness Act, which would have essentially codified Obama’s executive orders and delayed the individual mandate until 2015.  Ironically, the same day as the House vote, the administration released a new rule that again delayed the individual mandate for those that lost their insurance until October 2016.

While Democrats in general have not supported repeal of the individual mandate, the November 2014 elections may have changed some of their minds.  After all, former Senator Tom Harkin (D-Iowa) said in December 2014 that the ACA is too complex and Congress should have held off passing ObamaCare (he believes they had the votes to pass a single-payer plan instead).  Senator Chuck Schumer (D-NY) has called passing ObamaCare in 2010 a mistake and that Congress should have focused on the economy instead.

Republican leaders have promised a vote on repealing the individual mandate and will likely get unanimous support by Republicans.  It will be interesting to see how Democrats vote in the new Congress.

Repeal of the Medical Device Tax:  ACA has imposed a 2.3 percent excise tax on the sale of medical devices, amounting to approximately $30 billion over 10 years.  While it is not a direct tax on consumers, they will pay for it through higher costs for their insurance premiums and Medicare and Medicaid.  Since many medical device companies are small and entrepreneurial, the tax is particularly harmful to innovation and job creation.

Repealing the medical device tax has strong support from Republicans and Democrats.  In June 2012, the House voted 270-146 in favor of H.R. 436, the Protect Medical Innovation Act, which would have repealed the tax.  While the Senate did not take up that legislation, it did pass a non-binding amendment to repeal the tax during consideration of the Senate FY 2014 Budget Resolution, Sen. Con. Res. 8, in March 2013, by a vote of 79 to 20.

Two bills have been introduced in the 114th Congress to repeal the medical device tax, S. 149 in the Senate and H.R. 160 in the House.  Both have received bi-partisan support.  In fact, a January 13 article in Inside Health Policy states the Senate is just one vote shy of a filibuster-proof vote.  Sen. Elizabeth Warren (D-Mass.) has expressed support for repealing the device tax in the past, but has not yet indicated if she will support S. 149.

The Upcoming Supreme Court Decision

Many conservatives have called for a delay on voting for these aforementioned changes until the Supreme Court makes a decision in King v Burwell, a lawsuit that challenges the legality of providing taxpayer-funded subsidies to people that enroll in the federally-established ObamaCare exchanges.  The case will be heard on March 4, 2015 with a decision expected by July.

The plaintiff’s argument is that the law clearly states that subsidies can only be provided to state-run exchanges.  They also argue because the IRS regulations illegally make available subsidies in the federally-facilitated exchanges, penalties under the employer and individual mandates are also activated.  Thus, citizens are unduly harmed in the 36 states with federally-established exchanges.

If the Supreme Court should agree with the plaintiffs, subsidies could no longer be provided in federally-established exchanges.  Americans would learn these subsidies were another fabricated promise to make ObamaCare palatable, just as the many other falsehoods such as “if you like your plan, you can keep your plan.”

Without subsidies, consumers in the federally-run exchanges would soon see the true costs of ObamaCare and likely drop their plans.  The law would collapse and Republicans would need to quickly provide a viable free-market replacement that puts consumers in charge of their healthcare choices and not government bureaucrats or politicians. 

Whatever happens, the next two years will be another bumpy ride for ObamaCare.

 

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