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Dismantling The Affordable Care Act: What Could A President Romney And Hill Republicans Do?



September 20th, 2012

On November 6, 2012, Americans will go to the polls to elect a president.  One of the many issues that will be on their minds is the future of the Affordable Care Act.  Governor Mitt Romney’s website states:

On his first day in office, Mitt Romney will issue an executive order that paves the way for the federal government to issue Obamacare waivers to all fifty states. He will then work with Congress to repeal the full legislation as quickly as possible.

What are these “Obamacare waivers,” however, and how would Governor Romney go about repealing the full legislation?

There are no “Obamacare waivers” that could be issued by executive order.  Section 1332 of the ACA permits “waivers for state innovation,” but these waivers, which only affect certain provisions of the law and can only be granted if specific substantive and procedural requirements are met, cannot be granted prior to January 1, 2017.  Even in 2017, a state seeking a waiver would have to show that it had a plan to provide coverage that is at least as comprehensive and affordable and that covers at least as many people as the ACA (without increasing the deficit), not exactly what Governor Romney has in mind.

Legislation has been introduced in Congress that would accelerate these waivers to 2014, indeed President Obama announced support for such legislation, but it has gone nowhere. There are other provisions in the ACA permitting waivers or adjustments from specific requirements, such as waivers on the ban on annual dollar limits prior to 2014, but the time for granting these has already expired, and in any event they would have only a trivial effect on the law.

What about repeal?  As every American remembers from middle-school civics, the president cannot unilaterally repeal a law.  Under Article I of the Constitution, a bill must be passed by both the House and Senate and signed by the president to become law.  This happened with the ACA, and the ACA remains the law of the land until it is repealed through this process.  Under the Senate rules, a bill must pass the Senate by a three-fifths majority if it is filibustered, and an ACA repeal certainly would be.  At this point in time, no one is predicting that the Republicans will pick up a 60 vote majority in the Senate, so repeal as such seems off the table.

This is also true for repeal and replace.  Governor Romney has suggested that there are certain elements of health reform that he supports, including coverage of some adult children and coverage of preexisting conditions in the individual market for people who lose insurance coverage.  He also favors equalizing the tax treatment of individual and employer-based coverage.  The first two of these initiatives, would require full congressional action.  The third could likely be passed, however, through budget reconciliation.

What Could — And Couldn’t — Be Achieved Through Budget Reconciliation

So what about budget reconciliation—can’t budget reconciliation be passed through a simple majority?  Yes, indeed the final tweaks to the ACA were passed through budget reconciliation in March of 2010.  But budget reconciliation is subject to two important limitations.

First, it takes time.  Although reconciliation acts have been passed in as little as a month, they usually take much longer, averaging about five months.  Congress begins by adopting a budget resolution, directing its committees to develop legislation meeting budget goals.  If more than one committee is involved, the budget committees must pull together the recommendations in omnibus legislation, which is presented to each house as a reconciliation bill.

Debate on budget bills in the House is usually expedited.  In the Senate, debate on budget reconciliation legislation is limited to 20 hours, followed by an opportunity for any Senator to offer amendments without debate.  A reconciliation bill can then pass the Senate by a simple majority.

Second, the permissible subject matter of reconciliation acts is limited. Budget reconciliation bills in the Senate are subject to the “Byrd rule,” which is in fact a federal statute.  The Byrd rule allows any senator to raise a point of order objecting to any “extraneous provisions” in a reconciliation bill.  If the Senate parliamentarian upholds the point of order, a three-fifths majority of the Senate is necessary for the provision to remain in the legislation.

Under the Byrd rule, a provision is considered to be extraneous if it falls within one of six categories, the most relevant of which are that:
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  • it does not produce a change in federal outlays or revenues;
  • it produces a change in outlays or revenues which is merely incidental to the nonbudgetary components of the provision; or
  • it would increase the deficit for a fiscal year beyond the “budget window” covered by the reconciliation measure.

Budget reconciliation could almost certainly be used to amend or repeal provisions of the ACA that directly affect the outlays or revenues of the United States, such as the Medicaid expansions, premium tax credits, or individual responsibility provisions.  It could not, however, be used to change the insurance market reforms, such as the ban on health status underwriting or the pre-existing conditions clause ban.  Large parts of the ACA, therefore, can only be amended by a vote of 60 senators.  Moreover, if the Democrats hold the Senate, even reconciliation would presumably not be possible.

How Much Could A Romney Administration Do On Its Own?

What could a future Romney administration accomplish without Congressional assent?  The question of the ability of an administration to change the policies of a prior administration has frequently arisen over our history.  The most famous such incident occurred with the transition from the Federalist administration of John Adams to the Democratic-Republican administration of Thomas Jefferson, and resulted in a Supreme Court decision known to every law student.  The Federalists, having lost control of Congress and the presidency, created and filled at the last minute a number of judicial offices, hoping to extend the reach of their control.  The incoming Jefferson administration refused to deliver a commission to a Justice of the Peace named William Marbury.

Marbury sued for mandamus before the Supreme Court.  Chief Justice Marshall, in one of the most famous of all Supreme Court opinions, Marbury v. Madison, ruled that the judiciary has the power to order the executive to comply with laws duly adopted by Congress and signed by the president, and could do so at the instance of an individual harmed by the executive’s refusal to take action (though the Court also found that the statute Marbury had sued under was unconstitutional and that it lacked the authority to grant him the order he requested).  Marbury established not just the principle that the courts have the final authority to say what the law is, but also that the courts can protect the rights of individuals who are illegally deprived of legal rights by the executive.

More recently, a federal court enjoined the unilateral attempt by the newly-elected President Nixon to terminate the Community Action Agency within the Office of Economic Opportunity, a program that was established by law and funded through an ongoing appropriation.  The court ordered President Nixon to reinstate the CAP.  Several other courts nullified President Nixon’s attempts to terminate other funded government programs.  Presumably, attempts by Governor Romney to simply terminate the implementation of the ACA would meet a similar fate.

The federal Administrative Review Act provides that a court may “compel agency action unlawfully withheld or unreasonably delayed.”  When Congress imposes a specific deadline for agency action, Congress itself has determined the reasonable time for agency compliance, and an agency that fails to act by the deadline has “unlawfully withheld agency action.”  A number of courts have held that courts must order compliance with the statutory deadline. If a Romney administration refused to establish federal exchanges or risk adjustment or reinsurance programs in states that do not establish exchanges, a court would have no choice but to order it to do so at the instance of a party who had standing to raise the issue.  Moreover, a state that wanted to proceed with establishing an exchange or expanding Medicaid would in all likelihood be able to sue the administration to enforce the law if it refused to do so.

The administration has promulgated final rules implementing parts of the ACA that are already in effect and some rules for implementing the 2014 changes.  More rules will no doubt be forthcoming before the end of the current administration.  A new administration could not simply ignore these rules.  It could promulgate amended rules or rescind existing rules, but would have to go through regular rulemaking processes to do so.  It could also not promulgate rules that do not comply with the ACA as it exists at the time when the rules were promulgated.

Of course, a Romney administration would have considerable discretion in its interpretation of the law and its enforcement of legal requirements.  Many provisions of the ACA leave room for interpretation, indeed many explicitly require the issuance of regulations to interpret and effectuate the law.  The Obama administration has issued a great deal of guidance that has not gone through rulemaking processes and presumably could be changed without rulemaking.   A Romney administration would presumably take a very different approach to implementation of the ACA than would an Obama administration.  It would have a great deal of discretion to implement its policy choices.

Summing Up The Situation If Romney Wins

All of this is to say that the election of a president opposed to implementation of the ACA would create a quite messy situation.  Some provisions of the law—in particular many of the provisions governing insurers—would remain in place and could not easily be repealed.  Other provisions could be repealed through reconciliation, but not immediately and not without a battle in Congress.  If the Democrats hold the Senate, even this would not be possible.

The 2014 deadline for implementation of the next round of reforms, including the issuance of premium tax credits, the exchanges, and the Medicaid expansions, would continue to loom as mandatory until Congress took action.  The administration could rescind or amend existing rules, but it would take time and there would be limits on what could be accomplished.  The administration could try to ignore provisions of the law or delay their implementation, but would almost certainly face litigation, which would once again embroil the courts in ACA implementation.  The prospect of lawsuits brought by states is quite conceivable.

In the end, any dramatic change in health policy will probably have to be bipartisan.  Bipartisanship has not been much in evidence lately, but it is unlikely that we will soon again face the situation that got the ACA enacted—the total domination of both houses of Congress and the presidency by one party.  Until and unless that happens again, the opportunities for change in the ACA are real, but limited.

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3 Responses to “Dismantling The Affordable Care Act: What Could A President Romney And Hill Republicans Do?”

  1. Don Fulano Says:

    “There are no “Obamacare waivers” that could be issued by executive order. Section 1332 of the ACA permits ‘waivers for state innovation,’ but these waivers, which only affect certain provisions of the law and can only be granted if specific substantive and procedural requirements are met, cannot be granted prior to January 1, 2017.”

    Very interesting. I will forward this very enlightening post to whitehouse.gov

  2. Jack Morrow Says:

    Thanks Tim! Now that Obama is doing the very things that you said a President can’t do, will you be update this blog? Or will you act like it’s not happening.

  3. Linda Bergthold Says:

    Thank you, Tim, for your usual reasonable and logical explanation of a key policy issue. There has been so much polemic around overturning the ACA that a calm and rational explanation of the challenges is very helpful. Everyone who reads this should email to friends and family, retweet and post on Facebook.

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