Republicans explore idea of Obamacare piggybank
December 14, 2016
Republicans are searching for a way to capture savings from repealing Obamacare in a piggybank they could later use to fund a replacement.
It’s not clear how or if such a maneuver would work, but if Republicans are successful, it could overcome the tricky political problem of paying for whatever health reform they try to put in the Affordable Care Act’s place.
The idea is to bankroll an Obamacare replacement that would start several years down the road with funds derived from repealing the law itself. A repeal bill Congress passed early this year, and President Obama vetoed, would have saved $516 billion over a decade, according to the Congressional Budget Office.
If Republicans find a way to set that money aside, in a bank account of sorts, they could use it to pay for measures that are more palatable to conservatives but still expensive, such as the age-based tax credits House Speaker Paul Ryan has proposed to help Americans buy health insurance.
Lobbyists and congressional aides say the idea is among many proposals that Republican members of Congress are exploring, as they work on plans for repealing and replacing President Obama’s healthcare law once President-elect Trump takes office in January.
But the idea of an Obamacare “piggybank” would have to be approved by the Senate parliamentarian, who will determine which elements of the healthcare law can be repealed using special budgeting rules allowing Republicans to bypass a Democratic filibuster in the Senate, as they would need only a simple majority instead of 60 votes.
“There are many games budgeteers could play,” said Douglas Holtz-Eakin, president of the American Action Forum and former Congressional Budget Office director. “This is really going to depend on exactly how they write it.”
Congress has tapped into special accounts to pay for big priorities before. It has used the Medicare Innovation Fund, established by a 2008 bill to fund Medicare improvements, to pay for the so-called “doc fix” to prevent payments to Medicare doctors from plunging.
The Affordable Care Act emptied out the fund. But the fund stands as a model for how Republicans could pour repeal savings into an account to be used in the future.
And then there’s the Obamacare repeal bill Congress already passed, which Obama vetoed in January. That bill directs the savings into the Federal Hospital Insurance Trust Fund and says they should “remain available until expended.”
Whatever means Republicans might use to fund a future Obamacare replacement, there’s a widespread fear among policy analysts that it could be too difficult to replace the law if Congress doesn’t come up with a replacement along with the repeal.
In repealing the law, Congress would be ditching $680 billion in taxes on high-income households and the healthcare industry that helped pay for its coverage expansions, Brookings Institution fellows Alice Rivlin, Loren Adler and Stuart Butler wrote this week.
That would leave Republicans searching for new revenue to fund any federal assistance they might want to pass in a replacement plan, a daunting task for a party opposed to increased government spending.
“The current situation presents an opportunity to replace the Affordable Care Act with a more sustainable bipartisan law,” the Brookings scholars wrote. “But repeal must wait until a consensus is built around a replacement plan.”
By Paige Winfield Cunningham