2 Possible Paths For The GOP To Take On Healthcare Reform

If at first you don’t succeed, try, try again. President Donald Trump and congressional Republicans are not giving up on repealing and replacing the Affordable Care Act, even after their first attempt at healthcare reform fell flat.

After meeting with former Republican congressmen and senior advisers to Trump, Height Securities analyst Andrew Parmentier is convinced that Republicans will be taking another stab at healthcare reform in the near future.

At A Fork In The Road

According to Parmentier, Republicans have two possible paths on healthcare. The first path is to start with House Speaker Paul Ryan’s American Health Care Act (AHCA) and modify the bill to gain the support of the ultra-conservative House Freedom Caucus. Freedom Caucus chairman Mark Meadows indicated that the caucus could be onboard with the AHCA if the bill included provisions allowing individual states to opt-out of enforcing Essential Health Benefits (EHBs) and community rating requirements.

If Republicans aren’t able to find common ground using the comprehensive AHCA as a starting point, Parmentier says that they will likely put together a “skinny” version of healthcare reform that includes a handful of changes that would be widely popular, including the elimination of the individual mandate and several ACA-related taxes.

“The least comprehensive, or a ‘skinny’ version of ACA repeal, would represent a consolation by Republicans who feel the need to do ‘something’ but in the current political environment cannot come to agreement around anything but the lowest-hanging fruit,” Parmentier explained.

Height expects the House will pass its version of healthcare reform by mid-May and will ultimately approve whatever version of the bill is returned to them by the Senate.

So far in 2017, the Health Care SPDR (ETF) (NYSE: XLV) is up 7.4 percent.

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