Quick Pass or Fail By: Gabriel PotterMBA, AIFA® 2017.03.15

The Republican response to the Affordable Care Act (ACA) was released late last Monday.  The Republican bill – the American Health Care Act (AHCA) – was drafted by House Speaker Paul Ryan.  The bill doesn’t yet have a short moniker like “ObamaCare” and that’s partially because it’s hard to see who  closest advocates are going to be.  The President has gotten behind the bill; with Trump threatening dissidents in his ranks with primary challengers should they not fall in line behind it?  Still, the White House has made it clear:  “Don’t call it TrumpCare.”  Rather, the administration has posited fall-back positions in case the bill doesn’t pass, and they won’t want to be attached to a potentially failed policy by name.  They could call the ACHA “RepubliCare”, but that too might be a misnomer.  Deep conservatives and the Freedom caucus are angry with a bill that keeps elements of the ACA, while they would rather turn back the clock and undo the regulations, taxes, and mandates, completely.  In contrast, Republican moderates in Congress and several governors, several of whom accepted expanded Medicaid coverage as part of the ACA, are willing to wait for third-party assessments and scoring from the Congressional Budget Office.  In response, Speaker Ryan has conducted a PowerPoint presentation to sell his bill to Congress, essentially arguing that his bill already represents the closest compromise between factions in the Republican Party.  Speaker Ryan has tried to minimize the scope of the debate on the AHCA, arguing his bill is the “best and only chance” to remove ObamaCare.

Given Republican dominance in both houses of Congress, a Republican authored bill, and no threat of veto, implementing the plan could have been done quickly.  Speed isn’t traditionally something Congress is known for, Ryan must have been hoping for greater swiftness from his colleagues on the hill.  Ryan clearly believes that getting his bill passed quickly and quietly, with a minimum of debate, scrutiny, and counter-proposals. It is the best way to preserve momentum and credibility for his party.  We are unsure if there is truly the one and only shot to repeal ObamaCare.  For example, the President and Congress can remove enforcement and protection elements of the ACA in a piecemeal way which has already put pressure on large insurance companies to leave the marketplace.  However, the fate of the AHCA as a replacement for ObamaCare will probably fall into one of two options:  it passes quickly or it’s dead-on-arrival.

 

 

 

 

Gabriel Potter

Gabriel is a Senior Investment Research Associate at Westminster Consulting, where he is responsible for designing strategic asset allocations and conducts proprietary market research.

An avid writer, Gabriel manages the firm’s blog and has been published in the Journal of Compensation and Benefits,...

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