'Repeal-and-delay' approach to ACA could set up fiscal cliff

U.S. Capitol with flag
Plans to delay replacing the ACA could have significant budgetary implications. Image: Getty/Andrea Izzotti

As members of Congress lay the groundwork to repeal parts of the Affordable Care Act through budget reconciliation, they should know that a delayed replacement for the law could end up contributing to the national deficit, according to a new analysis. 

Christine Eibner, a senior economist at the RAND Corporation, wrote in an piece for The Commonwealth Fund that moving forward with a repeal now and leaving a replacement plan for later, an option some congressional Republicans favor, would make it nearly impossible for a future replacement plan to be budget neutral.

The GOP's failed attempt to repeal parts of the ACA through budget reconciliation at the end of 2015, she wrote, would have reduced federal spending by about $1.4 trillion between 2016 and 2025, according to Congressional Budget Office projections. However, because the savings associated with cutting ACA expenditures would become part of the baseline budget with a repeal, any replacement plan that came later would be deemed as deficit-increasing by the CBO, even if it costs less than $1.4 trillion to implement.

Moreover, a repeal in this fashion would also eliminate federal revenue generators put in place by the ACA, leaving Congress with a fraction of what the ACA’s implementation costs were to work with for a budget-neutral replacement.

Eibner wrote that a repeal and delay plan, in addition to budgetary concerns, would leave payers and providers in a state of flux, with disruption in their operations likely as they “face uncertain regulatory and marketplace environments” between laws.

This week, the Senate passed a budget resolution that would repeal major provisions of the ACA. But Republicans have not yet decided on a firm replacement plan, despite calls from President-elect Donald Trump to repeal and replace the law at the same time.

Democrats have urged caution from their Republican colleagues, saying it’s important that the public and the healthcare industry have a defined replacement plan before the ACA’s programs are stripped away. Major healthcare lobbies, meanwhile, are not being particularly vocal about the repeal itself, but are looking to get involved in crafting its replacement.