A proposed compromise for warring Republicans.
I’ve drafted up a short, simple amendment that would convert House Speaker Paul Ryan’s “American Health Care Act” (AHCA) bill into a true Obamacare repeal bill while conforming to Senate “reconciliation” rules.*
I believe the amendment would reunite fractious Republicans and conservatives, who at the moment are bitterly divided over how to repeal Obamacare’s core mandates—the ones that are driving up costs and reducing access to care.
The amendment, which is reprinted in full below, would end all of the Obamacare mandates in a way that’s designed to conform to Senate rules, so Ryan’s controversial (but in some respects quite good) bill can pass the House and Senate with only Republican votes.
In short, it’s a proposed compromise, offered in good faith to end the current impasse.
Here it is:
SEC. __. INSURANCE MANDATES.
(a) Guaranteed Issue, etc. (Group Plans).—Section 4980D of the Internal Revenue Code of 1986 is amended in paragraph (b)(1) by striking “$100” and inserting “$0”.
(b)Guaranteed Issue, etc. (Nongroup Plans).—Section 300gg–22 of the Public Health Service Act is amended in paragraph (b)(2)(C) by striking “$100” and inserting “$0”.
(c) Essential Health Benefits.—Subpart I of 45 C.F.R. § 156 (2016) is amended in § 156.805(c) by striking “$100” and inserting “$0.”
(d) Medical Loss Ratio.—Subpart F of 45 C.F.R. § 158 (2016) is amended in § 158.606 by striking “$100” and inserting “$0.”
(e) Effective Date.—The amendments made by this section shall apply to months beginning after the date of enactment of this act.
The effect of this language is to make the various ACA insurance mandates (guaranteed issue, community rating, essential health benefits, etc.) voluntary, and thus to liberate Americans to make their own choices with respect to health insurance purchases.**
If AHCA were to become law with the proposed amendment included, we would witness “something terrific”:
- Premiums would drop, especially in the troubled individual market.
- Coverage numbers would rise.
- Collapsing insurance markets would stabilize and revive.
Even the Congressional Budget Office, in a recent report, implicitly admits that premiums would go down, if the ACA’s core mandates were to go away.
CBO also implies that coverage losses would be lower without those core mandates, assuming federal subsidies were maintained or increased.
So it’s reasonable to conclude that retaining Obamacare’s core mandates makes little sense, in terms of policy or politics. Repealing them is good policy and good politics. Importantly, all have to be repealed together, because they’re all interconnected.
It’s a bit like the game of Jenga, the one with the stick-tower where if you remove just one stick, disaster may follow. With the ACA, pretty much every stick depends on all the others. So the only way to win, with ACA repeal, is remove all of the sticks at once. Then, everyone wins.
With the proposed amendment, the debate over the Ryan bill would shift from a focus on how many millions will lose coverage to a focus on how many millions will obtain coverage thanks to lower premiums.
What the amendment presented here specifically does is zero out the penalties associated with the law’s onerous insurance mandates—mandates like guaranteed issue and community rating. These are the “core” mandates of Obamacare, the ones that make Obamacare Obamacare. Repeal them, and you effectively repeal the whole law.***
If the proposed amendment doesn’t conform to Senate rules, I’ll darned if I can see why not. It’s modeled on an essentially identical provision in Ryan’s own AHCA bill, one that zeroes out the individual mandate penalty. That provision passed parliamentary muster in the Senate as part of the 2015 repeal package that went to President Obama’s desk. (He vetoed it in early 2016.) If it is okay under Senate budget reconciliation rules to zero out the individual mandate penalty, it should be okay to zero out the similar penalty for the insurance mandates now.****
But in any event, adding it to Ryan’s bill is risk-free. If it’s truly noncompliant with Senate rules, the Senate can just strip it out. And if, as House leaders suggest, the inclusion of the provision could cause the entire House bill to be deemed noncompliant, well, no worries. Just re-pass the House bill minus the offending amendment. No harm, no foul.*****
The Ryan bill itself is already a little bit pregnant, if you will, when it comes to repealing mandates. It repeals some, amends some, ignores others. If we can repeal some, why not all, or at least more?
Right now, Republicans leaders want—or rather, they seem to want—to “fix” Obamacare. Unsurprisingly, that is putting them at loggerheads with tens of millions of grassroots Americans who want the whole law repealed. As of this writing, the Ryan bill appears doomed in the House.******
Those who support Ryan’s AHCA in its current form either don’t agree that it is Obamacare Lite, or don’t want to admit that it is, or don’t care for various reasons. (Some seem to support it more for peripheral items, like its big tax cuts, than for the Obamacare-related issues.) But those of us who oppose Ryancare (a.k.a. Trumpcare) care very much about the mandates at the heart of the ACA, and the ill effects of those mandates on prices, markets, and individual freedom. We fear that, if not repealed in AHCA—the only “Obamacare repeal” bill Republican leaders have committed to considering this Congress—those mandates will live on indefinitely.
While I side with the opponents of AHCA, I offer the proposed amendment in the spirit of compromise, so we can move forward together.
All Republicans say they want repeal. The vast majority ran on full repeal. Candidate Trump promised “complete” repeal (his word). This amendment provides complete repeal, in the meaningful sense.
As we’ve seen, some Republicans claim “complete” repeal is impossible under Senate rules. Perhaps. Perhaps not. This amendment is drafted to comply with those rules, and thus to test the skeptics’ claim. But happily, as I said, the experiment is risk-free. No harm in trying.
The House is slated to vote next week.
Members who want full repeal should insist on adding this amendment (or something like it, that achieves the same purpose).
There you have it. An attempt to find the sweet spot.
Well, Mr. Speaker? Mr. President? What do you say?
* The idea for this amendment comes from an excellent Jan. 4 USA Today article by repeal advocates Heather Higgins and Phil Kerpen. I’ve merely translated their good idea into suggested legislative language.
** Two things to be aware of, with the approach I’ve taken. 1) As a side-benefit, the amendment language signals a partial withdrawal of the federal government from this area of regulation, and thus implicitly invite states to resume their traditional role. The amendment does not, however, explicitly invite them to do so, and cannot, by itself, guarantee that they do so. Each state would have to decide for itself how to regulate in the absence of federal regulatory enforcement activities. 2) As drafted, the amendment ends enforcement for some federal health-related mandates enacted prior to the ACA, specifically ones dating back to HIPAA, a 1996 law that was basically a modest precursor of the ACA. It’s not my intention here to touch any mandate beyond those in the ACA, but doing so is unavoidable with the “zero out the penalties” approach, thanks to the way Congress has chosen to intermingle the relevant statutes. If a more surgically targeted approach can be devised, that conforms to Senate reconciliation rules, I’m all for it.
*** By the way, “popular” mandates like guaranteed issue (a.k.a. the ban on preexisting conditions exclusions) and the under-26 mandate are not as popular as everyone assumes. A recent poll shows that when you explain the downsides, in terms of lower quality and higher costs, net support evaporates and even turns to opposition.
**** Update, March 22: The amendment’s eligibility for inclusion in a reconciliation measure is especially clear, if, as Cato Institute’s Michael Cannon contends, the mandates that it repeals are “terms and conditions” of a government subsidy scheme (in this case, the ACA’s premium and cost-sharing subsidies). Cannon’s case is strong, in my opinion.
***** I am in favor, if necessary, of having Vice President Pence, acting in his capacity as president of the Senate, formally rule the amendment germane under the rules, and letting the 48-member Democratic caucus try to find the 60 votes needed to overturn his ruling. This has been called the “Pence Option,” and some people view it as a “nuclear” option that would blow a big hole in the Senate’s filibuster rule and thereby inflict lasting damage on the Senate as an institution. I am not sure that the effects would be as bad as all that, given the narrow way in which the amendment is cast (as zeroing out penalties only, not repealing provisions of law that have no non-incidental effects on outlays or revenues). But the question may be academic, if, as I believe, Cannon’s argument about “terms and conditions” (see previous footnote) is correct. The Pence Option may be unnecessary. In any event, we cannot get to that particular fork in the road until we first pass a bill through the House that includes the proposed amendment or something similar. Then, we can see how the Senate parliamentarian interprets its viability, under existing Senate rules and precedents. And then we can assess our options with full information.
****** Update, April 26: Following a month of negotiations with the Trump Administration and “moderate” House Republicans, the conservative House Freedom Caucus announced today that it has secured changes to the Ryancare (a.k.a. Trumpcare) bill that enable its 30 or so members to support the bill. That leaves the bill’s fate primarily in the hands of the “moderates.” Unfortunately, while the changes do improve the bill, they do not repeal the destructive Obamacare insurance regulations. Rather, they make it somewhat easier for states to opt out of some of the regs. Full repeal of title I of the ACA, along the lines I’ve suggested here, remains a far better approach, both policy-wise and politically.