Re­plac­ing the health care law will be a slog, not a race

The Denver Post - - PERSPECTIVE - By Ramesh Pon­nuru

In the days since the elec­tion, Repub­li­cans have re­al­ized that they are in a tight spot on Oba­macare. They seem to be lurch­ing to­ward a strat­egy that will make it tighter.

Repub­li­cans have vowed over and over again to re­peal and re­place the health care law, but they do not yet have a de­tailed plan or the votes to en­act it. Democrats, mean­while, re­main com­mit­ted to the law, and there will be at least 48 of them in the new Se­nate. Un­less eight of them de­fect, they have enough votes to fil­i­buster Repub­li­can bills to undo it. Repub­li­cans prob­a­bly do not have the votes to abol­ish the fil­i­buster.

Un­der cer­tain con­di­tions, Se­nate Repub­li­cans can use a pro­ce­dure called “rec­on­cil­i­a­tion” to pass leg­is­la­tion with a sim­ple ma­jor­ity. But they prob­a­bly can­not change Oba­macare’s reg­u­la­tions, as op­posed to its tax and spend­ing pro­vi­sions, that way.

Given these con­straints, Repub­li­cans have lit on the idea of us­ing rec­on­cil­i­a­tion to re­peal as much of Oba­macare as they can, but with a de­lay: The re­peal would go into ef­fect in two years. This would give them enough time to work on a sec­ond bill that takes up both a re­place­ment plan and the re­main­ing parts of Oba­macare.

Repub­li­cans will have the votes for the first bill, as long as they do not think too hard about the chal­lenges of get­ting the sec­ond one. Those chal­lenges be­gin with their own di­vi­sions. Some Repub­li­cans just want to re­peal Oba­macare, with no re­place­ment. Oth­ers say they would like a re­place­ment, but don’t like the ideas lead­ing Repub­li­cans have out­lined.

Pas­sage of a bill that mostly re­peals Oba­macare by 2019 would em­power both groups of Repub­li­cans to block re­place­ment leg­is­la­tion. The re­peal-only bloc would al­ready have got­ten most of what it wants. The Repub­li­can con­gress­men who are luke­warm about a re­place­ment would, judg­ing from past form, de­cide that do­ing noth­ing is bet­ter than what­ever flawed bill Repub­li­cans put for­ward.

Democrats, mean­while, would have an in­cen­tive to play their own game of chicken. They know that most Repub­li­can politi­cians do not want re­peal-only to take ef­fect be­cause mil­lions of vot­ers would lose their in­sur­ance cov­er­age. A lot of them might de­cide to wait un­til the dead­line draws near and tell Repub­li­cans that they have to call off the ex­pi­ra­tion of Oba­macare or face catas­tro­phe.

Mean­while, Oba­macare’s ex­changes, al­ready in par­lous health, would de­grade fur­ther. In­sur­ers have been pulling out of the ex­changes rather than in­cur­ring con­tin­ued losses in cov­er­ing their rel­a­tively old and sick pop­u­la­tion; the re­main­ing ones have been jack­ing up pre­mi­ums.

Cut off sub­si­dies to the ex­changes, and more in­sur­ers will leave or raise pre­mi­ums. That’s es­pe­cially the case if the Repub­li­can rec­on­cil­i­a­tion bill — the one they are plan­ning to pass in early 2017 — gets rid of the in­di­vid­ual man­date im­me­di­ately. With­out the man­date forc­ing healthy and young peo­ple to buy in­sur­ance, the ex­change pop­u­la­tions will be even more ex­pen­sive to cover.

Un­til now, vot­ers have blamed Democrats for the prob­lems with Oba­macare. That might not be the case af­ter Repub­li­cans en­act the first part of their re­pealand-de­lay strat­egy.

James Capretta, a lead­ing con­ser­va­tive health care ex­pert, has crit­i­cized re­pealand-de­lay for sim­i­lar rea­sons. He thinks the most likely out­come of the strat­egy is that Oba­macare comes back to life, this time with Repub­li­can votes. He ad­vo­cates a dif­fer­ent course: A rec­on­cil­i­a­tion bill should in­clude much of the re­place­ment plan that Speaker of the House Paul Ryan has al­ready out­lined, and Repub­li­cans should try to reach a com­pro­mise on that bill with some Se­nate Democrats.

What might such a com­pro­mise look like? The Repub­li­cans could try to get some Democrats to agree to abol­ish the in­di­vid­ual man­date and si­mul­ta­ne­ously to mod­ify Oba­macare’s pro­tec­tions for peo­ple with pre-ex­ist­ing con­di­tions so that peo­ple would not have an in­cen­tive to wait un­til they get sick to buy in­sur­ance. They could end fed­eral dik­tats about what es­sen­tial ben­e­fits all in­sur­ance poli­cies have to cover. They could sim­plify the law’s tax cred­its and make them phase out more grad­u­ally. And they could pur­sue some of these ideas in rec­on­cil­i­a­tion and some of them in sep­a­rate bills.

Many Democrats would find these ideas, which would sub­stan­tially undo Oba­macare’s cen­tral­iza­tion of health care pol­icy, unattrac­tive. But some Democrats might find them ac­cept­able as a way of en­sur­ing that most of the peo­ple who got cov­er­age through Oba­macare re­tained their cov­er­age and that peo­ple with pre-ex­ist­ing con­di­tions were pro­tected — es­pe­cially if they worry that Repub­li­cans might just re­peal the whole law if they do not co­op­er­ate. Any such com­pro­mise, to go for­ward, would have to win enough Democrats to make up for the Repub­li­cans who would jump ship for any­thing short of full re­peal.

An al­ter­na­tive to a grand com­pro­mise would be to try to re­place parts of Oba­macare piece­meal, through ex­ec­u­tive or­ders and leg­is­la­tion on spe­cific is­sues such as Med­i­caid. What both ideas have in com­mon is that they would re­quire Repub­li­cans to slow down: They’re not go­ing to be able to do these things in the first weeks of 2017. They would also re­quire Repub­li­can politi­cians to ac­knowl­edge that they can­not end Oba­macare in full, at least not yet — and hope that their vot­ers are will­ing to ac­cept the fact.

E-mail Ramesh Pon­nuru at pon­nuru@bloomberg.net. Fol­low him on Twit­ter: @RameshPon­nuru

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