Components of ACA Proposed for Repeal

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Repeal >> Components of ACA Proposed for Repeal (last updated 2.7.16)

Overview

Congressional Research Service. Legislative Actions to Repeal, Defund, or Delay the Affordable Care Act. January 14, 2016. Table 1 summarizes the authorizing legislation to amend the ACA that has been enacted since the ACA became law in March 2010. Table 2 summarizes the ACA provisions in authorizing legislation that passed the House in the 112th and 113th Congresses (2011-2014) but saw little if any further legislative action.

Medicaid Expansion

Congressional Action. Full repeal of the optional expansion of eligibility for Medicaid that was established in the Affordable Care Act (ACA), beginning in 2018, was included in the Senate version the Budget Reconciliation passed on 12.3.15 but not the version passed by the House on 11.2.15 (Table 3).

Provisions Affecting Health Exchanges

Premium Tax Credits and Cost-Sharing

Congressional Actions.
- A provision to repeal temporarily the limits on the amount of any premium tax credit overpayment that has to be repaid to the government. The repeal applies to taxable years ending after December 31, 2015, and before January 1, 2018, was included in the Senate version the Budget Reconciliation passed on 12.3.15 but not the version passed by the House on 11.2.15 (Table 3).
- A provision to repeal a) the premium tax credits; b) cost-sharing reductions; c) the HHS Secretary’s authority to determine individuals’ eligibility to participate in an exchange and receive the tax credits and cost-sharing reductions; and d) the IRS’s authority to disclose taxpayer return information to HHS for eligibility determinations (all these provisions take effect after December 31, 2017) was included in the Senate version the Budget Reconciliation passed on 12.3.15 but not the version passed by the House on 11.2.15 (Table 3).
Budgetary Impact. CBO reports the 10-year (2016-2025) impact of repeal of the limits on the recapture of excess premium tax credits would be to decrease outlays by $6.1 billion and increase revenues by $2.6 billion (Table 2).

Reinsurance

Congressional Action. A provision to prohibit the HHS Secretary from collecting risk reinsurance fees or making payments, effective January 1, 2016, was included in the Senate version the Budget Reconciliation passed on 12.3.15 but not the version passed by the House on 11.2.15 (Table 3).

Risk Corridors

Political Support. According to Sen. Marco Rubio (11.18.13), the health-care law’s ‘risk corridors’ could result in a huge taxpayer burden. According to John R. Graham (1.21.15), the America’s Health Insurance Plans trade group blasted the lame-duck Congress for not appropriating risk-corridor funding next year – a fight that ‘reveals the strained relationship between the health insurance industry and Republican lawmakers,’ according to Graham. ‘This is an odd fight for health insurers to pursue.’”
Congressional Action.
- Sen. Marco Rubio introduced in late 2013 legislation that would repeal the risk corridors because they function as an insurance industry “bailout.”
- The Consolidated and Further Continuing Appropriations Act, 2015 (Cromnibus), which narrowly passed both houses of Congress in December 2014, denied any additional appropriations or transfers to fund risk corridors, and instead limited risk corridor payments to money available through the program’s revolving fund.
- Repeal of risk corridors was originally included in the budget reconciliation bill passed by the Senate 52-47 on 12.3.15. However, according to Daily Signal (12.4.15), “During debate over the reconciliation bill Thursday, Sen. Patty Murray, D-Wash., objected to the provision repealing the risk corridor program, saying it violated the Byrd Rule—which mandates provisions of a reconciliation bill be budgetary in nature—and arguing that the measure served political interests. “It is yet another effort to pander to the extreme political base rather than working with us to strengthen health care for our families,” Murray said. Following Murray’s objection, Democrats blocked Republicans’ efforts, 52-47, to override the parliamentarian’s ruling—which required 60 votes—and repeal the risk corridor program.”

Funding for U.S. Territories

Background. The ACA appropriated $1 billion for U.S. territories that elect to establish an exchange. The funds are available through 2019.
Congressional Action. This provision was not addressed in the Budget Reconciliation passed by the House on 11.2.15, but a provision to prohibit the HHS Secretary from allocating ACA funds to Puerto Rico and the other U.S. territories, effective January 1, 2018, was included in the version that passed the Senate on 12.3.15 (Table 2).
Budgetary Impact. CBO reports the 10-year (2016-2025) impact of repeal would be to decrease outlays by $0.2 billion (Table 2).

Provisions Affecting Employers

Employer Mandate

Political Support. There have been bipartisan calls to eliminate the employer mandate, with even some progressives arguing for its repeal. The chief disadvantage is the resultant revenue loss.
- Blumberg, Linda J., John Holahan, Matthew Buettgens. Why Not Just Eliminate the Employer Mandate? Urban Institute. May 2014. Authors argue that the employer mandate will not lead to more people getting coverage because those firms that don’t provide it will likely opt for the penalty. They estimate that most employers wouldn’t drop coverage if the penalties were eliminated, in part, because of the tax benefits. All told, only 500,000 would lose employer coverage after the mandate is repealed–a decline of just 0.3%.Eliminating the mandate would “eliminate labor market distortions in law” and “lessen opposition to the law from employers” while only reducing health coverage across the country by 0.07%. “However, new revenue sources will be required to replace that anticipated to be raised by the employer mandate.”
- Jost, Timothy. Repeal, And Replace, The Employer Mandate. Health Affairs (6.4.14). “Repeal of the employer mandate might, in fact, not be such a bad idea, as long as the current mandate was replaced with a better alternative.
- Klein, Ezra. Obamacare’s employer mandate shouldn’t be delayed. It should be repealed. Washington Post, July 2, 2013.
Congressional Action. Full repeal of the employer mandate and associated penalties, effective January 1, 2015, was included in the Budget Reconciliation passed by the House on 11.2.15 (Table 3) and the Senate version passed 12.3.15 (Table 3).
Budgetary Impact. The CBO has estimated that the loss of the employer mandate would cost the federal treasury $130 billion over ten years (2014 to 2023). The Urban Institute estimated the number would be closer to $46 billion, but the Rand Corporation said the cost could be $149 billion.

Automatic Enrollment

Political Support. Large employers support repeal of the ACA requirement that employers with more than 200 FTEs automatically enroll new full-time employees in health insurance and continue coverage for current employees. According to Timothy Jost, “implementing the provision, which has been generally opposed by business interests, has been a very low priority for the administration, and its repeal will not seriously affect the general scheme of the ACA. The Department of Labor (DOL) announced in late 2010 that it read the provision as not taking effect until it issued implementing regulations and that it did not intend to do so until 2014. In a second guidance issued in 2012, DOL stated that it would not be ready to implement the provision by 2014 given the need to coordinate implementation of the provision with other more important provisions such as the employer mandate and the ban on waiting periods exceeding 90 days. It projected no deadline for implementing the provision. DOL reiterated that employers did not need to comply with the provision until it issued rules.”
Congressional Action. Repeal of this provision was included in the Bipartisan Budget Act of 2015 (P.L. 114-74) (Table 3). Repeal of this provision also was included in the Budget Reconciliation passed by the House on 11.2.15 (Table 3).
Budgetary Impact. According to CRS, the 10-year (2016-2025) impact of repeal would be to reduce the budget deficit by $7.9 billion (Table 3). According to CBO, the combined 10-year (2016-2025) impact of repealing the individual and employer mandates would be to decrease federal outlays by $228.8 billion and decrease federal revenues by $98.6 billion, for a net deficit reduction of $130.2 billion.

Small Business Tax Credit

Congressional Action. A provision to repeal the tax credit for small employers with no more than 25 FTEs, applicable to taxable years ending after December 31, 2017, was included in the Senate version the Budget Reconciliation passed on 12.3.15 but not the version passed by the House on 11.2.15 (Table 3).

Individual Mandate

Political Support.
Congressional Action.
- In March 2014, the House voted 250-160 to delay the ACA’s individual mandate for a year. The bill from Rep. Lynn Jenkins (R-Kan.) picked up support from 27 Democrats.
- Full repeal of the individual mandate and associated penalties, effective January 1, 2015, was included in the Budget Reconciliation passed by the House on 11.2.15; the Senate version passed 12.3.15 eliminated the penalties for failing to comply with the individual mandate, effective January 1, 2015, but did not eliminate the mandate itself (Table 3).
Budgetary Impact. Congressional Budget Office estimates that a one-year delay of the individual mandate would save about $9 billion over 10 years. According to CBO, the combined 10-year (2016-2025) impact of repealing the individual and employer mandates would be to decrease federal outlays by $228.8 billion and decrease federal revenues by $98.6 billion, for a net deficit reduction of $130.2 billion.
- Tax Foundation (October 2015). Alan Cole. The CBO Thinks Repealing Obamacare Mandates Would Lower the Deficit. Here’s Why. Tax Foundation (10.21.15). Any revenue losses associated with repeal of the individual mandate will be more than made up by fewer people receiving subsidized coverage through either Medicaid or the Exchanges.

Independent Payment Advisory Board (IPAB)

Political Support. Former Democratic National Committee Chairman Howard Dean has made the case for IPAB repeal, along with former representative Barney Frank (D., Mass.).
Congressional Action.
- Senate and House measures to repeal IPAB have 32 and 192 co-sponsors, respectively, including 22 Democrats in the House.
- In early August, 2013, The Hill reported that “a wave of vulnerable Democrats over the past three months has signed on to bills repealing the board’s powers, including Sen. Mark Pryor (Ark.) and Reps. Ron Barber (Ariz.), Ann Kirkpatrick (Ariz.), Kyrsten Sinema (Ariz.) and Elizabeth Esty (Conn.).”
- Full repeal of the IPAB was included in the Budget Reconciliation passed by the House on 11.2.15 (Table 3).
Budgetary Impact. The 10-year (2016-2025) impact of repeal would be to increase the budget deficit by $7.1 billion (Table 3).
Research and Analysis.
- Cannon, Michael. Sebelius Resignation May Create More Problems For Democrats Than It Solves. Forbes, April 11, 2014.
- Dean, Howard. The Affordable Care Act’s Rate-Setting Won’t Work. Wall Street Journal, July 28, 2013.
- Cohen, Diane and Michael Cannon. The Independent Payment Advisory Board: PPACA’s Anti-Constitutional and Authoritarian Super-Legislature. Cato Institute: June 14, 2012.
- Cannon, Michael. Sorry, Folks, Sarah Palin is (Partly) Right. Cato Institute: August 19, 2009.

Prevention and Public Health Fund (PPHF)

Congressional Action. Full repeal of the authority and permanent annual appropriation for the PPHF. was included in the Budget Reconciliation passed by the House on 11.2.15 and Senate on 12.3.15 (Table 3).

Budgetary Impact. The PPHF annual appropriation is currently $1 billion through FY2017. Thereafter, it will increase in increments to $2 billion for FY2022 and each subsequent fiscal year. CBO reports the 10-year (2016-2025) impact of repeal would be to reduce outlays by $12.7 billion.

Tax Provisions

Tax on Over-the-Counter Medications

Congressional Action. Full repeal of this tax was not included in the Budget Reconciliation passed by the House on 11.2.15 (Table 3), but was included in the version that passed the Senate on 12.3.15 (Table 2).

Budgetary Impact. CBO reports the 10-year (2016-2025) impact of repeal would be to decrease revenues by $6.7 billion (Table 2).

Limits On FSA Contributions (“Special Needs Kids Tax”)

Budgetary Impact. CBO reports the 10-year (2016-2025) impact of repeal would be to decrease revenues by $32.0 billion (Table 2).

Excise Tax on Comprehensive Health Insurance Plans (Cadillac Tax)

Congressional Action. Full repeal of the Cadillac tax was included in the Budget Reconciliation passed by the House on 11.2.15 (Table 3). Further discussion here. Also see Calls for Repeal at Excise Tax on Comprehensive Health Insurance Plans (Cadillac Tax). See also efforts to delay the Cadillac tax here.

Budgetary Impact. CBO reports the 10-year (2016-2025) impact of repeal would be to decrease revenues by $93.2 billion and reduce outlays by $15.3 billion.

Drug Manufacturers/Importers Tax (Tax on Prescription Medications)

Budgetary Impact. CBO reports the 10-year (2016-2025) impact of repeal would be to decrease revenues by $29.6 billion (Table 2).

Medical Device Tax

Political Support. Although there is bipartisan support for repeal bills, health policy expert John Graham argues that this carries little weight since there is no way of paying for repeal (CBO projects the medical device tax will raise $29 billion from 2013-2022). The medical device industry is now seeking to have the tax repealed as part of more comprehensive tax reform. According to Timothy Jost, “this tax was imposed on medical device manufacturers by the ACA, as they were expected to see increased revenue because of expanded coverage under the ACA. A recent GAO report has found that profits and sales of medical device manufacturers have in fact continued to increase after the imposition of the tax. Medical device manufacturers are located throughout the country, however, and have a powerful lobby. Even some liberal Democrats have opposed the tax.”

Congressional Action.

On March 21, 2013, the Senate by a vote of 79-20 passed an amendment to end the tax as part of a non-binding budget resolution as part of a budget resolution. One tax expert derided this as “the U.S. Senate’s answer to an air kiss.”
A House version of the bill, sponsored by U.S. Representative Erik Paulsen, a Minnesota Republican, has drawn 212 cosponsors.
Full repeal of the medical devices tax was included in the Budget Reconciliation passed by the House on 11.2.15 (Table 3) and the version passed by the Senate on 12.3.15 (Table 2). See also efforts to delay the medical device tax here.

Budgetary Impact. CBO reports the 10-year (2016-2025) impact of repeal would be to increase the budget deficit by $23.9 billion.

Health Insurance Tax

Political Support. The health insurance industry trade group, America’s Health Insurance Plans, supports legislation in the House and Senate to fully repeal the HIT. There is bipartisan support to repeal the HIT (which CBO projects will raise $102 billion from 2013-2022), but there are no “pay-fors” in these bills, dimming their political prospects. So the health insurance industry also is seeking to have the tax repealed as part of more comprehensive tax reform.

Congressional Action.

Bipartisan legislation in the House, introduced by Rep. Charles Boustany (R-LA) and Kyrsten Sinema (D-AZ), has achieved support from a majority of representatives (218).
In the Senate, the Jobs and Premium Protection Act, introduced by Sen. Orrin Hatch (UT) and Sen. John Barrasso, would fully repeal the health insurance tax.
Full repeal of this tax was included in the Budget Reconciliation passed by the House on 11.2.15 (Table 3), but was included in the version that passed the Senate on 12.3.15 (Table 2).