Forecast: Repeal and Replace in Name Only

The GOP’s Obamacare replacement will look a lot like Obamacare.

In congressional testimony this week, Health and Human Services secretary-designate Tom Price made some sweeping promises regarding the repeal of the Affordable Care Act, or Obamacare, that, when viewed in the light of his boss President Donald Trump’s even bolder promises, point to a startling realization: The new administration plans to fix the health care law, rather than repeal and replace it. Oh, they’ll call whatever they do “repeal and replace,” but it will amount to “retain and repair.”

After seven years of demanding repeal, Republicans are finally in a position to do something, but they still have not settled on an Obamacare replacement. Whatever it is, though, it’ll be “terrific“—and probably look a lot like Obamacare.

Trump, if anyone has forgotten, has promised to repeal Obamacare “completely.” To hear Price and his boss tell it, their forthcoming repeal bill will hurt no one, their “replace” bill will guarantee access to everyone, health care costs will come tumbling down, and every little girl will have a pony.

When asked what will happen to Medicaid enrollees whose coverage would be yanked in a “complete” repeal, Price told the Senate Committee on Health, Education, Labor and Pensions, “We must absolutely ensure that individuals do not fall through the cracks in whatever transition occurs.” Going further, Price vowed Trumpcare will guarantee “universal access” (a less sweeping promise than Trump’s “insurance for everybody” and his assertion we’ll be “beautifully covered”). “What I commit to the American people,” Price informed the Senate Finance Committee, “is … making certain every single American has access to affordable health coverage.”

That phrase, “has access to,” caused Sen. Bernie Sanders, a Vermont Democrat, to scoff: “‘Has access to’ does not mean that they are guaranteed health care. I have access to buying a $10 million home. I don’t have the money to do that.”

In any event, Price’s compassionate-sounding promises won’t be easy to keep. They require the support of at least eight Senate Democrats, which is not, apparently, forthcoming. Currently the GOP has a bare majority in the Senate (52 votes), but not the three-fifths majority (60 votes) required for most legislation in that chamber. So without Democrats, Republicans are stuck.

Or are they? It turns out there is one path, though it’s a bit rocky. They can use the special parliamentary procedure known as “budget reconciliation” to repeal some, but not all, of Obamacare. Importantly, that procedure, which forestalls filibusters and requires only 51 votes to pass a bill, can only be used for passing or repealing things that clearly affect the deficit. It does not allow for repeal of the entire Affordable Care Act, nor for passage of nonbudgetary reforms. Which is why, in the light of Price’s and Trump’s promises, my money is on congressional Republicans ultimately fixing rather than replacing Obamacare.

Republicans can repeal some things through reconciliation—Medicaid expansion, premium and cost-sharing subsidies for people who buy their insurance through the government exchanges, various taxes that help fund those subsidies, tax penalties that enforce the mandate on individuals to buy coverage, and tax penalties that enforce the mandate on employers to offer coverage.

But here’s the kicker. Reconciliation does not allow for Republicans to repeal Obamacare’s mandates on insurance companies—for example, the rules barring insurers from considering an applicant’s health status.*

Those rules are precisely what’s driving up private insurance costs. Leave them in place, while repealing the subsidies and the individual mandate, and you get a death spiral. Private insurance markets (outside the workplace) will collapse. Ultimately, millions of people—by one estimate, 18 million Americans in the first year and about 32 million after a decade—will have to seek affordable health coverage elsewhere, or go without.

So if Republicans don’t coalesce around some kind of “soft landing,” it’s a safe bet many of them will balk. And yet, if, as some senators propose, the effective date of the repeal is made contingent on the enactment of some future, yet-to-be-written “replacement”—conservatives will balk.

The pretzel-shaped logic of this situation is driving GOP lawmakers inexorably toward a new, awkward position: “Fix,” rather than replace. That’s intriguing, since Democrats claim to be for “fix.” But politically, Republicans can’t be. Their constituents would revolt. And so “fixing without ‘fixing'” has silently become the new, unstated goal.

A major bill reflecting this new approach appeared this week. It’s a RINO bill—a “replacement in name only.” Brainchild of Republican Senators Bill Cassidy of Louisiana and Susan Collins of Maine, the so-called Patient Freedom Act would retain the Affordable Care Act’s tax hikes, subsidies, exchange infrastructure and key mandates, but would also give individual states a right to choose from a menu of options, including one by which the state could set aside many (but not all) of those mandates within its borders, without loss of federal subsidies. The bill was immediately panned by conservatives for not going far enough—and dismissed by leading Democrats for going too far.

Reforming the law in a meaningful way, though, isn’t necessarily impossible. Republicans can save face via a narrow route: They can couple, in one reconciliation bill, the above-listed partial repeals with generous, transitional health care block grants to the states that, in effect, grandfather in existing subsidy recipients and prevent innocent people from getting hurt. That bill, which needn’t expand the deficit, would pass parliamentary muster and could thus become law with only Republican votes.

It would constitute a success, but only a partial one. President Barack Obama’s health care law would not be completely repealed. The insurance regulations would remain on the books. Private insurance markets would, unavoidably, be disturbed. But if conservatives are smart, they’ll take this least worst option—even if, for example, it means making other big concessions, such as leaving the big Medicaid expansion in place, too, for a while. Chalking up a win, even a partial one, would put them in a decent position for the next round of political battles. (There is always a next round.)*

If the only thing conservatives accomplish this round is to repeal the individual mandate, the law’s linchpin, that will be enough. The rest will follow as surely as the sun rises.

Under any scenario, Democrats can claim a win. If the bill dies, they stopped it. If it passes, they preserved the law’s core insurance mandates and possibly its Medicaid expansion—and lived to fight another day. But under no scenario are Price, Trump and other Republican leaders able to keep all of their extravagant promises—nor any of them, fully.

Dean F. Clancy, a former senior official in the White House and Congress, writes on U.S. budget and constitutional issues. Follow him at deanclancy.com or on twitter @deanclancy.


[Originally published at USNews.com, January 26, 2017. @USNewsOpinion. Republished at DeanClancy.com.]


NOTE

* Update, Feb. 6: It turns out, crucially, that the Obamacare insurance mandates can be repealed. Which means there’s no excuse for Republicans not to repeal every word of the law’s market “reforms,” after all. If, in the wake of this new information, they decline to repeal the insurance mandates (especially the most destructive ones, guaranteed issue and community rating), it will be due to a policy choice on their part, not an alleged parliamentary constraint.

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