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The Three Phases of Repeal and Replace Explained

Republicans have long held that improving our nation’s health care system and undoing the damage done by Obamacare should be a step-by-step process. That process begins with step one: repealing Obamacare. As we work to implement our ideas to increase competition, empower patients, lower costs, and expand access, it is important to remember that our goal was never to pass a massive, 2,000+ page bill. We’ve seen the results of that approach with Obamacare.  

Instead, we are working through three phases:

Phase One: The American Health Care Act, which is on the floor this week and takes full advantage of budget reconciliation to avoid the Democratic filibuster in the Senate as we repeal Obamacare.

  • Budget reconciliation is a procedural tool that requires only 51 votes in the Senate and is subject to specific rules and restrictions that determine what can and cannot be included.
  • According to rules set forth in the Congressional Budget Act, reconciliation may only include provisions that directly relate to the budget – the debt limit, spending, or revenue.
  • Because of these specific reconciliation restrictions, the American Health Care Act cannot include measures that do not directly impact spending or revenue.
  • Enter Phases two and three where additional measures will be implemented to increase competition, lower costs, and expand access.

Phase Two: Administration actions, notably by Health and Human Services Secretary Price, to stabilize the health insurance market, increase choices, and lower costs.

  • Under current law, the Secretary of HHS is granted over 1,400 instances of discretion where he can take action, specifically on regulatory matters.  
  • Shortly after his swear-in ceremony, HHS Secretary Tom Price implemented changes to help stabilize the health insurance market place. Secretary Price has made it clear the Trump Administration will take advantage of every opportunity offered under law.

Phase Three: Additional legislation passed by Congress that cannot be included in a reconciliation bill according to Senate rules. Examples include:

  • President Trump and Congress have committed to moving legislation to allow the sale of insurance across state lines, which will increase competition and help drive down costs for consumers.
  • On Wednesday, the House passed two Phase three measures:
    • The Competitive Health Insurance Reform Act (H.R. 372), which eliminates anti-trust protection for insurance providers and creates competition so Americans are not left with one or two choices for health coverage – which has been a growing reality in many parts of the country.
    • The Small Business Health Fairness Act (H.R. 1101), which allows small businesses to pool together and purchase plans – increasing their purchasing power to negotiate better care and lower premiums for their workers. This is an important step toward purchasing health care across state lines, as it allows interstate shopping for small business plans.
  • Other examples include upcoming legislation like:  
    • The Protecting Access to Care Act (H.R. 1215), which prevents abusive lawsuits that cause higher premiums due to the high and unnecessary cost of defensive medicine.
    • The Self-Insurance Protection Act (H.R. 1304), which protects workers who get their health care coverage from employers that self-insure, by providing a backstop on catastrophic losses.