by Jackie Gardina

Local experts discuss the legal hurdles and loopholes to fulfilling promises that President-elect Donald Trump made on the campaign trail. This week, the repeal of Obamacare.

What is the future of Obamacare?

Both President-Elect Donald Trump and the Republican leadership have vowed to repeal the Affordable Care Act (ACA), also known as Obamacare, immediately. Whether Congress will vote to repeal, repeal and replace, or simply amend the current law remains unclear. Moreover, Trump could take immediate executive action that could effectively cripple the law. Regardless, any change will have a significant effect on Californians.

Under Obamacare, nearly 3 million Californians have either obtained insurance through the Exchange marketplace or through expanded Medicaid coverage. In addition to access to insurance, Obamacare provides for free preventive care, no lifetime limits on coverage, no discrimination based on pre-existing conditions or gender, allows young adults to remain covered by their parent’s insurance until age 26, and provides tax credits to help pay for coverage.

In the last four years, Congress has voted to repeal Obamacare over 50 times. Each time it reached his desk, President Barack Obama vetoed the bill and the House and Senate Republicans lacked the supermajority necessary to override his veto.

Since the election, Trump and Republicans in Congress have stated that they will seek to repeal and replace Obamacare within. Trump’s first 100 days in office. Neither the Republicans nor Trump have described how repeal will affect those enrolled under the current system.

To make things more complex, the Republican Party is not unanimous in its approach. Some longtime opponents to Obamacare want it repealed immediately without replacement. Others, like House Speaker Paul Ryan, want a more orderly transition and have promised, “no one will be worse off” under an alternative plan.

“Repeal and Delay”

One option available to Republicans is to repeal Obamacare immediately but delay the implementation of the repeal for several years. The repeal meets a campaign promise while the delay allows Republicans sufficient time to develop an alternative plan. Moreover, delaying any changes until after the 2018 House and Senate elections means that no changes will go into effect and no one will yet feel the pain of losing insurance or having to change insurance or providers. Given that the Republicans have not yet coalesced around an alternative plan, this appears to be a prudent political move. It will, however, insert uncertainty into the insurance marketplace and the healthcare industry, not to mention the turmoil for those who may lose their insurance, especially those with chronic illnesses.

An Alternative Plan

In June 2016, House Speaker Paul Ryan unveiled an alternative plan to Obamacare called “A Better Way.” According to Ryan, the plan represented a “consensus” among Congressional Republicans. The plan discards Obamacare’s controversial individual mandates and penalties, removes the tax subsidies and replaces them with tax credits, expands the use of private Health Savings Accounts (HSA), allows the insured to buy insurance across state lines, allows insurance companies to charge younger people less and older people more, funnels the “sickest” into “high-risk pools,” and “restructures” Medicare and Medicaid as part of a long-term reduction in federal spending. For the most part, Trump’s plan mimics the Republican plan.

There is no guarantee that “A Better Way” will be passed in its current form. While the Republicans hold a majority in both houses of Congress, the Senate Republicans will need the vote of eight Democratic senators to break a filibuster. Democratic leaders have vowed that they will not help Republicans dismantle Obamacare.

In addition, any new bill must be submitted for a nonpartisan cost estimate from the Congressional Budget Office, potentially exposing significant long-term costs. The Center on Budget and Policy Priorities, a nonpartisan research and policy institute, recently analyzed the Republican plan and found “Congressional Republicans’ planned approach to repealing the Affordable Care Act (ACA) wouldn’t leave enough funding for a replacement that provides at least comparable coverage to a similar number of people.” Republicans may need to tweak the proposal in response to a budget analysis.

Moreover, any attempt to privatize Medicare or shift Medicaid costs to states will be met with stiff opposition, even among constituents who favor repeal of Obamacare. Over half of all Americans and two-thirds of Americans over 55 oppose changes to Medicare. Given that older voters preferred Trump over Clinton 53 percent-45 percent, Trump and the Republican Party will need to tread carefully. When it comes to changes to Medicaid, the insurance industry also may balk. Most insurance companies like the Medicaid expansion under Obamacare.

President Trump and Executive Action

Given the obstacles in Congress, especially a possible Democratic filibuster in the Senate, Trump could take independent action. While Trump can’t repeal the law as a whole, he could cripple it through rule-making and executive action.

Perhaps Trump’s easiest and most devastating action would be to drop the administration’s appeal of a lawsuit filed by Republican House members in 2014. That suit, House v. Burwell, alleged that the Obama administration was unconstitutionally spending money that Congress had not formally appropriated. Obamacare provides at least two subsidies. For purchasers with higher incomes, the ACA provides subsidies for those purchasing policies. There’s a permanent appropriation of money set aside to pay this subsidy. But there’s a second subsidy: “cost-sharing reductions” (CSR). These are payments that the federal government makes to insurers for providing policies for low–income purchasers buying policies on the Exchange. Congress never funded the cost-sharing reduction subsidy. The Obama Administration has been paying the cost-sharing reductions through a fund intended for tax refunds, which the CSR arguably is not.

Last April, Federal District Court Judge Rosemary Collyer ruled in favor of the House Republicans. “Such an appropriation cannot be inferred,” she wrote of the payments, and insurer “reimbursements without an appropriation thus violates the Constitution.” Judge Collyer stayed enforcement of her decision, however, pending an appeal to a higher court. That appeal was filed in July and is still months away from resolution.

If Trump wanted to undermine Obamacare, he could simply order the appeal dropped, letting the lower court ruling stand, and stop reimbursing insurers. Most insurers would exit the Exchange market if the CSR payments ceased.

It is certain that Obamacare in its current form will cease to exist. How it will end and what, if anything, will replace it is entirely uncertain.

Santa Barbara and Ventura Colleges of Law (COL) Dean Jackie Gardina’s experience in higher education includes both academic and administrative positions.

Established in 1969, COL, an accredited nonprofit institution was founded to expand opportunities and broaden access to legal education. For more information, visit