The hero has disappeared in a cloud of suspicion and is presumed dead, so much so that supposed friends are found to be celebrating his passing.  This is just as it should be at the end of Act II.  Remember when Republicans rejoiced over the apparent abandonment of H.R. 3200 in October 2009?  It furnished the foundation for H.R. 3590, which became Public Law 111-148 (one of the two statutes that comprise the ACA) in March 2010.  Capitol Hill is short on many things, but there are plenty of plot devices available to move this story forward before the elections in November 2018.  Passing the 2015 partial repeal bill again soon probably is a long shot.  But ACA subsidies may seem less sacrosanct after ACA taxes really begin to bite in early 2018, and ACA architects may rue their decision to give the HHS Secretary such wide discretion to grant § 1332 waivers.

When lawyers talk about “waivers,” we normally have in mind contracts to surrender certain legal rights in exchange for something else deemed more desirable.  Section 1332 waivers are something entirely different.  Codified as 42 U.S.C. § 18052, this ACA text empowers the Secretary to approve state plans to alter, and perhaps dispense with, these ACA provisions, for up to five years:

  • ACA § 1301-1304 (including “essential health benefits” and “qualified health plan” definitions);
  • ACA § 1311-1313 (state-operated ACA Exchanges);
  • ACA § 1402 (cost-sharing subsidies); and
  • Code § § 36B (premium subsidies), 4980H (employer mandate) and 5000A (individual mandate).

The Secretary may grant a state’s waiver request only after finding that it would achieve at least equivalent coverage and cost-sharing protections without increasing the federal deficit.  But the ACA also required the former Administration to do things that it didn’t do, and to enforce things it didn’t enforce.  Employer mandate taxes were to accrue beginning in 2014.  There was no “transition relief.”  The ACA killed so-called “grandmothered plans” outright.  Those and many other politically problematic dictates were delayed, ignored or amended administratively, sometimes very informally. We won’t be surprised if this Administration uses § 1332 waivers to allow states to “fix” perceived ACA problems that can’t or won’t be fixed by Congress.

Of course, facile findings made to facilitate waivers would provoke years of litigation ending with Supreme Court pronouncements… after November 2018 …maybe after November 2020.  So maybe we should discount that possibility.  [Insert your preferred emoji here.]

Update:  Well, that accelerated quickly.  The Senate Budget Committee web site now features a link to an 18-page draft bill called The Obamacare Repeal Reconciliation Act of 2017.  Here are highlights of what seems clear on first reading.  The bill appears to –

  • Uncap the recapture of excess premium tax credit payments;
  • Terminate at the end of 2019 the ACA’s small business tax credits, premium tax credits and cost sharing payments, while expressly authoring cost-sharing payments to be made through 2019;
  • Set the individual mandate and employer mandate taxes at $0, retroactive to January 1, 2016;
  • Defund Planned Parenthood for one year, offset by boosting Community Health Center funding by $422M;
  • Phase-out Medicaid expansion;
  • Repeal DSH payment reductions;
  • Suspend Cadillac plan taxes until 2026;
  • Repeal taxes on over-the-counter medications, repeal the prescription medicine tax, repeal the medical device tax, the tanning tax and the health insurance tax beginning January 1, 2018;
  • Repeal the net investment tax retroactive to January 1, 2017;
  • Repeal FSA contribution limits beginning January 1, 2018;
  • Authorize $1.5B of new anti-addiction spending in FY2018-19.

This is the simplest, skinniest health care “repeal” bill you are likely to read, so you should.