A friend of the blog asked me to look at Senator Cardin’s (D-MD) ACA improvement bill, SB 1511. It’s a perfectly fine bill. It wants a public option tied to Medicare opt-out. It wants to increase the value of CSR. It wants to increase the subsidy range to 600% of the Federal Poverty Line. It wants to do something with prescription drugs. It wants to do a lot. And it wants all of these changes to go live on January 1, 2018. That is five months from now.

The Congressional Budget Office (CBO) recently scored HR 1628, the Obamacare Repeal Reconciliation Act which would sunset all funding and spending of the ACA on 12/31/19. The political theory behind a two year phase out is that at some point the artificial crisis will force action on a replace bill that will be conservative leaning but have large bi-partisan majorities so everyone is responsible and no one is to blame. The crisis point is twenty nine months from now.

The Cardin bill is too late to implement even if we lived in a counterfactual universe where it was signed into law on Friday afternoon.

The hypothetical replacement bill, even if it was to be signed into law on Friday evening, might be too late to implement for January 1, 2020.

Plumbing is a challenge. Anything more complex than explicitly appropriating Cost Sharing Reduction subsidies and perhaps adding money to outreach efforts won’t have a positive effect for a 1/1/18 start date. The Cardin bill builds on current structures and current regulations in the counterfactual universe of Hillary Clinton being president but it wants to start up a new insurer and it wants to dramatically alter the composition of the on-Exchange market while changing the actuarial value of the plans sold. The insurers have spent a year or more building the 2018 product profile and have submitted their tentative offerings for approval. At this point, their plumbers can’t build brand new plans from scratch and have them reviewed and approved to go on sale on November 1st.

Any hypothetical replace bill would take down significant elements of the current regulatory structure. New rule-making from at least the Departments of Health and Human Services and the Treasury would be needed. That means the federal regulators would need to figure out what Congress intended, then they would need to create drafts, solicit comment, revise the regulations. That is not a fast process. Once final regulations are issued, insurers have to figure out what they need to do and then build.

Insurers and the federal government should have all of the changes in final testing by July 2019 for a November 1, 2019 launch date. Rule making would eat up a year and insurers would be scrambling for a year to build. They don’t need to be able to have their operational process be 100% effective on Day 1. As a lowly plumber on the launch date of the ACA Exchanges in 2013 I had jury-rigged a bastardized manual process for the piece that I was responsible for with the intent of getting the system fully automated by early January. Minimal initial operational capability needs time.

Anything that is a tweak and an adjust to the basic regulatory framework of the ACA has enough time to be implemented for the 2019 plan year. Major changes for January 1, 2020 would be a plausible challenge with significant probabilities of failures and painful issues if Congress had a bill signed this weekend.

This entire piece is premised on the absurd assumption that a law is signed on July 21, 2017. This is an extraordinarily generous assumption regarding plumbing. Anything that happens will be working with an even more compressed time frame than the one I sketched out here.