What Are the GOP’s Health-Care Alternatives?
Progressives are lining up to assail the GOP’s health-care bill, though many on the political right seem to be even more unhappy. A little internal division is inevitable in any reform campaign worth fighting for, but the alternative strategies these conservative critics are suggesting are less than persuasive.
To repeal and replace ObamaCare, Republicans must manage a mix of policy, political and procedural variables that are more complicated than usual. Compromises are necessary to earn 218 votes in the House and then a simple majority among the 52-member Senate GOP conference under the budget reconciliation process, which can bypass the filibuster but limits the scope of what the bill can contain. Call it the art of the deal.
The Democratic position of obstruction is simple and purely political: Oppose everything to add to the pressure on Republicans and hope the bill fails. Legislative defeats early in a new Presidency tend to beget more defeats. Then Democrats hope to win a majority back in 2018 and fix ObamaCare on their terms with Donald Trump, or wait until 2021.
Judging by the reaction on the right to the House bill, this might work. Hours after the release of the legislative text, detractors were already portraying policy nitpicks as historic betrayal. So let’s look at what they’d do instead.
The House Freedom Caucus and some Senators prefer to revert to the repeal bill that Republicans passed in 2015 to test the limits of reconciliation. That measure would eliminate funding for ObamaCare’s Medicaid expansion and the exchange subsidies roughly two years after enactment. After this so-called clean repeal, they say, Republicans can debate replacement options and form a consensus later in this Congress—maybe.
But stand-alone repeal is unlikely to pass the Senate, not least because Republicans ran on repeal and replace, not repeal alone. Senators and most of the House also recognize that repeal—without the cushion of the replacement provisions for a smoother transition—will capsize insurance markets and accelerate ObamaCare’s collapse. The market won’t revert automatically to 2009 because that market no longer exists.
Instead, insurers and state Medicaid programs will have to recalibrate everything on the fly, with little time to prepare and adjust amid maximum market disruption. Governors in the 31 states that expanded Medicaid won’t be allies if the feds blow a hole in their budgets. The flight of insurers from the exchanges will increase as executives flee a dying business, and any insurers of last resort that remain will surge premiums to compensate.
Nearly a third of U.S. counties are now served by merely a single insurer. It could fall to zero. Republicans would own every horror story about cancer patients losing coverage and the poor thrown off the Medicaid rolls. Democrats suffered politically when ObamaCare caused a wave of insurance cancellations in 2013.
But let’s give the critics the benefit of the doubt and say repeal-only could get 50 Senate votes. Then what?
The GOP would have to move a replace bill with less political capital and a threshold of 60 Senate votes absent reconciliation. Good luck getting Chuck Schumer and the Democrats to agree under regular order to the reforms in the current House bill, which include block grants for Medicaid, expanded health-savings accounts and funding for high-risk pools. Republicans would go into 2018 having repealed ObamaCare without a replacement.
An argument for regular order is that the reconciliation rules are too restrictive to pass a full repeal or true free-market reform, so better to write legislation from scratch. But that option also puts repeal and replace at the mercy of eight Senate Democrats, who even if amenable would drive the bill to the left.
Liberals and the media have flipped from claiming Republicans had no ideas on health care to claiming those ideas will end civilization, but conservatives ought to know better. Since 2015 House and Senate Republicans collaborated on a consensus replacement, which was published during the campaign as the House’s “Better Way” plan. Anyone who’s surprised hasn’t paid attention.
Especially odd is the conservative opposition to tax credits for people who buy individual insurance. These were previewed in the “Better Way” and are a regular feature of all major GOP plans over the years, from Coburn-Burr-Hatch (2014), Ryan-Kline-Upton (2015) and Tom Price’s Empowering Patients First Act, which has existed in some form since 2009. We prefer tax deductions to credits, but that ship sailed a decade ago.
Mr. Price, now Health and Human Services Secretary, eventually found 84 GOP cosponsors in the last Congress. They include North Carolina’s Mark Meadows, the chairman of the Freedom Caucus and a leading if born-again tax credit critic. Did he read Mr. Price’s bill?
The policy dilemma for conservatives is how to move to a richer market for individual insurance that doesn’t receive the tax subsidy that employer-sponsored insurance does. You can begin to equalize that treatment either by adding a subsidy for individuals or reducing the one for companies. In an ideal word we wouldn’t have a subsidy for either. But that isn’t today’s health market.
The House bill’s tax credits and health-savings accounts are an attempt to equalize the tax treatment over time for individuals, and it’s a shame Republicans took out the cap on the tax exclusion for business. Conservatives should fight to restore it. But at least the House bill is progress toward the kind of market-based, patient-centered coverage conservatives say they want.
Some on the right now say that doing nothing is better than the House bill, claiming they can let ObamaCare deteriorate further and blame Democrats for creating it. But voters aren’t stupid. They know they elected a unified Republican government that promised repeal and replace. Voters will conclude the GOP is either feckless or pulled a bait and switch.
Entitlements by their nature are difficult to roll back once they’ve gained a constituency, which is one reason we opposed ObamaCare. But the GOP has to try. By all means Members should attempt to fix the House bill’s flaws, including the three-year delay in Medicaid reform and the too-generous inflation formula for funding the states, among other things.
But conservatives should keep in mind that failure will have a cost, and the irony could be that they block repeal because the replacement has flaws. Are those flaws really worse than the ObamaCare status quo?
Health-care reform is a test of whether Republicans, having been handed the gift of ObamaCare’s failure, can show voters that they can do better with conservative principles. The health-care market is at a crossroads. Either it heads in a more market-based direction step by step, or it moves toward single-payer step by step. If Republicans blow this chance and default to Democrats, they might as well endorse single-payer because that is where the politics will end up.