Why repealing ObamaCare will be a trainwreck for the GOP
The consequences will be painful, and the Republicans will have to own them
For six straight years, Republicans have been promising to repeal ObamaCare. Come January 20, when President Trump and the new GOP congressional majorities arrive in Washington, they'll finally have the chance to do it.
Well, what's that old saying? Be careful what you wish for.
Unfortunately for the ObamaCare haters, the GOP can't agree on what to replace the health reform law with. The solution they seem to be coalescing around is to pass a repeal right away, and claim a political victory, but delay the repeal from actually taking effect for a while. As in, a long while: "House conservatives want a two-year fuse for the repeal," Sahil Kapur reported in Bloomberg recently. "Republican leaders prefer at least three years, and there has been discussion of putting it off until after the 2020 elections."
In the annals of American health policy, there's a legendary bit of absurdity remembered as the "doc fix." In 1997, Congress tried to save money by passing a formula that automatically cut a bit of what Medicare pays doctors each year. But they screwed the formula up, and in 2002, cut doctors' reimbursements way more than originally intended. But lawmakers couldn't agree on a fix: The cuts were already scheduled, which made government budgets look better, so permanently canceling the formula required finding money somewhere else.
Their solution was to just kick the can down the road by delaying the cuts. Then they still couldn't figure out what to do. So when the delay ran out, they passed another delay, and another. Congress did this 17 times between 2003 and 2014, before they finally ponied up the $141 billion necessary to end the fiasco once and for all.
You can see where this is going: The GOP has had six years to figure out an ObamaCare replacement. If they haven't settled on one by now, there's no reason to think they will in another two or three or four years. Once their delay runs out, if they're still in power, the Republicans will just have to pass another delay. If the Democrats are back in power, they'll want to cancel the repeal outright, but the GOP won't let that happen. The compromise position will also be to pass another delay.
The ObamaCare repeal will become the new doc fix.
How did the GOP arrive at this Kafkaesque impasse?
First off, the GOP will probably only be able to do a partial repeal. ObamaCare was passed when the Democrats' had a filibuster-proof 60-seat majority in the Senate — a situation that comes along once in a blue moon for either party. Come January, the GOP will be at least eight seats short of that threshold. And the Democrats are insisting they won't be cooperating on any repeal.
That leaves Republicans with a trick called reconciliation. It's a Senate procedural rule that allows you to pass legislation with a simple majority vote — but only so long as the changes directly affect the federal budget. So reconciliation could end the subsidies ObamaCare offers on its exchanges. But it couldn't kill ObamaCare's individual mandate requiring everyone to buy insurance, or its regulations that put a cap on how much insurers can charge old people, or its rules against using pre-existing conditions to deny coverage.
But taking away the government aid that people need in order to afford insurance, while still requiring that they buy insurance, will be a surefire political loser. Much better to pass a bill through reconciliation, tell your supporters you "repealed" ObamaCare, but delay the policy rollout so you don't actually take any money away from anyone.
There is, however, a chance the Republicans could wrangle a legal ruling that allows reconciliation to undo all of ObamaCare, based on the logic that the spending and the regulations form a singular interconnected policy mechanism. Or the GOP could just kill the filibuster outright. (Though this also seems unlikely.)
That possibility is small, but it brings us to the heart of the problem.
ObamaCare managed to expand insurance coverage by about 20 million people, and basically ended the issue of people being permanently exiled from getting coverage because of their medical history. It also has lots of problems. But solving them is a relatively simple matter of making the subsidies a lot more generous so more healthy people will enter into the exchanges. Politically speaking, spending more is unthinkable to the GOP: They want to spend less.
There is a fantasy among Republicans that if they just deregulate health insurance, costs will come down. But ObamaCare forces insurers to charge young people more so they can pay for the care of older people. End that rule, and premiums for the young will go down — but they'll rise for the old. So the government can subsidize the former less — but it will have to subsidize the latter more.
Same goes for scrapping the rule that forbids insurers from pricing based on pre-existing conditions: Spending on the healthy will be cheaper for the government, but the sick will become more expensive.
Now, maybe market reforms will bring down health care prices eventually. But right now, to get everybody the care they need, you have to spend at today's prices. Whether the money comes from premiums or government subsidies or wherever, the cost will be the cost. Which means the only way to spend less right now is for Americans to make do with less health care.
That's the brute economic reality the Republicans are about to run smack into, which is why they seem prepared to pretend to face that reality, but never actually do so, and to keep on pretending forever.