The Latest Obamacare ‘Compromise’ Idea—Isn’t

‘Mother, may I?’ flexibility waivers don’t cut it.

If liberals like Ezra Klein are right, yesterday’s olive branch “compromise” offer by President Obama on his controversial health care law won’t win any supporters among the law’s opponents, because, in so many words, it comes from Mr. Obama himself, and they don’t trust him enough to go for any “compromise” that he endorses.

That’s probably right.

But as Mr. Klein points out, the move may have another purpose: to make the White House sound less rigid and inflexible on a law that has yet to win the support of the public.

And that could be part of a larger strategy to lay the groundwork for eventually wearing down public opposition to the law, and then splitting the Republican opposition (currently completely unified in favor of its full repeal).

Mr. Obama has a history of making soothing noises when on the defensive, without actually yielding an inch of ground, in order to draw his opponents into a trap. Remember the Blair House summit?

We may be seeing the same tactic here.

The Wyden-Brown “state flexibility” bill that the president came out for yesterday morning doesn’t actually create any state flexibility. The bill, introduced by Senators Ron Wyden (D-OR) and Scott Brown (R-MA), would basically just move up, from 2017 to 2014, the date when states would be allowed to petition the feds for some flexibility from Obamacare’s numerous rules and mandates.

Whether it’s 2017 or 2014, it’s still “Mother, may I?”

States would still have to jump through all kinds of federal hoops. As the White House fact sheet explains, to receive an “innovation waiver,” a state will have to persuade the federal secretary of health and human services that the state’s alternative approach will:

  • Provide coverage that is at least as comprehensive as the coverage offered through Exchanges . . .
  • Make coverage at least as affordable as it would have been through the Exchanges.
  • Provide coverage to at least as many residents as the Affordable Care Act would have provided.
  • Do not increase the Federal deficit.

That last line is especially important. As the states know all too well from their painful experiences with trying to negotiate Medicaid waivers, the feds will use the “budget neutrality” requirement to try to limit the states’ flexibility as much as possible.

And once granted, waivers will have to be renewed every five years, with states having to persuade HHS that they’re actually meeting the above goals (or any new goals added by HHS in the interim).

In so many words, Wyden-Brown invites states to “knock themselves out” coming up with interesting ideas for changing the color of their federal straightjackets. The price of this “flexibility” is that they must accept the feds’ arbitrary definition of what constitutes “acceptable” reform, as produced by an ugly legislative process marked by unsavory industry deals and blatant earmarks.

As health policy gurus Michael CannonBen Domenech, and Stuart Butler have all separately explained, the most likely result of these high federal hoops will be that states adopt either the same individual mandate as found in Obamacare or a single-payer, government-run system as found in Britain and Canada. Translation: a win-win for the left.

Is there any chance Republicans will take Mr. Obama’s “offer” seriously, and actually endorse it? That would make no sense, since every single one of them — even Senator Brown — has voted to repeal Obamacare in toto. Here’s a question that could help us gauge the possibility: Is there any overlap between that White House list of hoops I quoted above and the list of flexibilities that governors actually want?

Earlier this month, Governor Mitch Daniels (R-IN) and 20 of his fellow Republican governors sent HHS Secretary Kathleen Sebelius a letter saying that states won’t go along with Obamacare unless:

1. We are given the flexibility to decide which insurers are permitted to offer their products.

2. All the law’s expensive benefit mandates are waived, so that our citizens aren’t forced to buy benefits they don’t need and have a range of choice that includes more affordable plans.

3. The law’s provisions discriminating against consumer-driven plans, such as health savings accounts, are waived.

4. We are given the freedom to move Medicaid beneficiaries into the exchange, or to utilize new approaches to the traditional program, instead of herding hundreds of thousands more people into today’s broken Medicaid system.

5. Our state is reimbursed the true, full cost of the administrative burden to be imposed upon us, based on the estimate of an auditor independent of HHS.

6. A trustworthy projection is commissioned, by a research organization independent of the department, of how many people are likely to wind up in the exchange, given the large incentives for employers to save money by off-loading their workers.

This list leaves a lot to be desired. The first demand is anti-competitive and anti-consumer. The fourth is just trying to shift costs from state taxpayers onto federal ones. And the list is missing a key demand: states should have the right to opt out of having any exchanges within their borders at all.

And yet, it’s hard to see how a state insisting on even this imperfect set of demands could ever meet the president’s “Mother, may I?” checklist. So maybe Ezra Klein is right, and we’re safe.

If Republicans do fall into Mr. Obama’s trap, it will not be because he has offered them anything like a real compromise.

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


[Originally published at dailycaller.com, March 1, 2011. @DailyCaller. Republished at deanclancy.com.]

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