Romney could begin to gut the law immediately by taking some passive-aggressive steps. 5 ways to kill ACA without repeal

Even conservatives admit Mitt Romney’s promise to repeal President Barack Obama’s health care law with an executive order might not work — but that doesn’t mean he’s out of luck.

Romney could still begin to gut the law immediately by taking some more passive-aggressive steps — a jumbo-sized version of a strategy Obama has embraced on issues ranging from immigration to education.


Even if Romney can’t rely on a Republican-controlled Congress to pass a repeal bill, he could achieve a similar end, experts who have studied the law closely tell POLITICO. And although Romney’s health care advisers won’t say so on the record, they’re aware of the options and aren’t dismissing them.

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“The bottom line is, if Romney were to win, he can do a lot through administrative action to say this thing is not going to be implemented,” said James Capretta of the Ethics and Public Policy Center, who was a top health official in President George W. Bush’s Office of Management and Budget.

Officially, the Romney campaign says it’s committed to a Day One strategy. But if that doesn’t work out, here are five other ways Romney could take on health care reform.

1. Break the federal exchanges

Under the law, the federal government is supposed to build health insurance exchanges for states that don’t create their own.

But with Romney’s help, those states could defeat that effort, too, even if the law remains unchanged.

A quirk in the language of the law — which the law's supporters call a “drafting error” — could allow Romney to make it basically impossible for federally run exchanges to function. That’s because the law doesn’t explicitly give federal exchanges the ability to provide the same insurance subsidies that it will give to state-run exchanges.

Obama’s Internal Revenue Service issued rules intended to eliminate this problem, but Romney’s IRS could reverse that interpretation of the law.

This couldn’t happen overnight. A Romney administration would have to launch a full rulemaking process with a comment period and would have to provide extensive justification for the change, which would likely be challenged in court.

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The Romney campaign has said it is sticking to its executive order strategy.

“Gov. Romney’s Day One plan includes an executive order instructing federal agencies to return maximum possible authority to the states. This will include as much flexibility as the law permits. He will then begin the work of fully repealing Obamacare and replacing it with common-sense reforms that will ensure Americans have access to the highest quality health care in the world,” campaign spokeswoman Andrea Saul said by email.

But if Romney took this route, it could mean that a large number of the people who expected to get coverage in the federal exchange won’t be able to buy in. And many of these people will then be exempt from the individual mandate since the insurance for sale will likely be too expensive for it to meet the health reform law’s “affordability” test.

This could dramatically shrink the number of people buying insurance in federally run exchanges, which means they could collapse altogether.

For that reason, said the Cato Institute’s Michael Cannon, reversing the IRS rule “is the most important thing that Mitt Romney can do to repeal Obamacare.”

Without a working exchange, Cannon reasons, the remaining insurance market will buckle under the weight of the health reform law’s rules, forcing Congress ultimately to repeal the law.

“It has the potential to change votes in Congress. ... He’s just showing them how bad the law really is,” Cannon said.

2. Starve the federal exchanges

This one would take some help from Congress. But if Republicans find a way to stop funding the federal exchanges, a Romney administration would be under no obligation to come up with the funds.

Of course, the Republican House has repeatedly tried to pass legislation defunding parts of the law without success. But with Romney as president, House Republicans wouldn’t have to win passage of language that specifically defunds the federal exchanges. All they would have to do is block any language that explicitly funds them.

And even if the Senate stays in Democratic hands — with the power to push for the funding — it wouldn’t have nearly as much leverage to demand it without a Democratic president to back them up.

Here, Republicans would be taking advantage of yet another quirk in the design of the Affordable Care Act. The law didn’t appropriate funding for the federal exchanges. So far, HHS has paid for the federal exchanges out of a $1 billion appropriation that’s meant to cover all of the federal government’s expenses for implementing health reform. That fund is expected to run out by the end of this year.

The HHS secretary in a second Obama administration might still move money around inside the department to fund federal exchanges even if Congress didn’t make the funds available. But Romney’s secretary might not feel so inclined — and there wouldn’t be a legal obligation to do so.

“A Romney administration probably could slow adoption of a federal exchange in part by just not funding it itself at the federal level,” said Capretta.

3. Withdraw rules

A new administration can’t just change existing rules that its predecessors have gotten into final form. That requires a full rulemaking process, and they have to prove they have a “rational” reason for the change.

But rules that aren’t finalized can easily be tossed out or reworked. And many people close to the Obama administration expect that at least one major health reform rule won’t be proposed until after the November election — which means there won’t be time to finalize it before a change in administration.

That’s the rule defining the essential health benefit package that must be covered by health insurance plans. The way the rules are written will have a substantial effect on how much everyone’s coverage will cost and how much protection it will give to people who have insurance.

This makes the rule politically sensitive, which is why many expect the law to be held till November. But it also makes it a target for heavy revision by a Romney administration.

George Washington University’s Sara Rosenbaum, a health reform supporter, suspects that this fact is weighing on the Obama administration.

“I’m sure they’ll be moving at lightning speed to get things into final form,” she said.

Rules that are finalized can also be undone, though that takes much longer and will likely result in numerous lawsuits.

4. Be very ‘flexible’

The secretary of HHS is in charge of ultimately certifying whether states are enforcing provisions of the law or whether the federal government needs to use its backup enforcement powers.

That means that a Romney HHS secretary could let states and employers get away with things an Obama secretary likely wouldn’t. That could include certifying state-based exchanges that don’t meet many of the law's requirements, or giving broader latitude to companies that don’t want to update their insurance plans to meet the letter of the law.

“The secretary of HHS in the law has incredible discretionary authority,” said Capretta.

But Cato’s Cannon warns that this tactic could actually make the law harder to repeal in the long run, because it could make the Affordable Care Act less objectionable.

“Most of the things that opponents of Obamacare wanted to do [administratively] would actually make Obamacare less offensive,” Cannon said.

5. Do nothing

If Romney’s really determined to block the law, he might not actually need to do anything too clever — he could do a lot by simply doing nothing at all.

He could stop the writing of the remaining rules to implement the law, stop Medicare from moving ahead with programs to find new ways to pay providers, stop the IRS from enforcing the individual mandate and even stop Medicaid officials from facilitating the expansion of the program in the states that want it.

This would land the Romney administration in court, of course. There are laws on the books requiring a president to spend money for a duly passed law, and the Affordable Care Act also created new entitlements to health insurance coverage that individuals may be able to go to court to enforce.

But the process of forcing the president to implement a law through the courts is a long one, especially if it requires separate lawsuits to enforce different pieces of the law. If public opposition to the Affordable Care Act remains strong, Romney may pay little price from choosing to fight these cases.

For that reason, National Association of Insurance Commissioners consumer representative Tim Jost says that the fate of the law remains largely in the hands of the voters, regardless of what the Supreme Court has said.

“I’m just assuming that if Obama isn’t reelected, the law will stay on the books but nothing really happens,” Jost said.

This article first appeared on POLITICO Pro at 11:35 a.m. on July 6, 2012.