Despite repeated warnings from conservative realists, the Senate and House last week put in motion an Obamacare “repeal and delay” strategy that would destabilize the individual health insurance markets that provide coverage for over 11 million Americans.
Even President-elect Donald Trump’s promise to offer a simultaneous replacement bill seemed not to faze Senate Majority Leader Mitch McConnell, who rammed through the reconciliation “repeal” bill on a party-line vote, 51-48. The bill eliminates financing for insurance subsidies needed by 85% of the people who buy plans on the insurance exchanges. The House was expected to take similar action Friday.
Congress gave itself until Jan. 27 to come up with a replacement plan, which even many of the Senators who voted for the bill said was impossible. A few suggested maybe something would be forthcoming by March.
Two months isn’t enough time to craft a replacement bill capable of attracting the bipartisan support needed to avoid a filibuster. That doesn’t seem to be a particular concern for the Republican majority.
One of the larger untruths propagated by anti-Affordable Care Act partisans is the claim that Democrats ignored Republican input during the year-long debate leading up to its enactment in 2010.
That was true in the House, where the Republican minority refused to cooperate in crafting a bill. But as American Enterprise Institute scholar Norm Ornstein has documented, the Senate “through its Finance Committee, took a different tack, and became the fulcrum for a potential grand bargain on health reform.”
Chairman Max Baucus (D-Mont.) and two of his Democratic colleagues starting in the spring of 2009 worked closely with Sen. Charles Grassley (R-Iowa) and two of his Republican colleagues—the so-called “Gang of Six”—to craft the bill that eventually became Obamacare. Only when Republicans turned against the individual mandate—a key plank for the insurance industry and a Republican idea (recall President Obama was against the mandate before he was for it)—did bipartisan backing fall apart.
Now, there isn’t even the pretense of reaching out to the other side.
If the Republicans in the Senate don’t want to talk to their friends across the aisle, perhaps they’ll listen to the voices of reason within their own party. James Capretta, who was associate director at the White House’s Office of Management and Budget from 2001 to 2004 and now the Milton Friedman Chair at the AEI, has repeatedly warned in recent weeks that the individual insurance market will fall apart very quickly if the subsidies are repealed, or even delayed until, say, 2019.
While there are a number of technical reasons why that is the case, the simplest explanation is that a reconciliation bill can only deal with financial issues: eliminating the subsidies, repealing the individual and employer mandates, cutting back on support for the Medicaid expansion. It cannot remove insurance regulations like guaranteed issue regardless of health status (which is popular), the 10 essential benefits or limits on insurer overhead and medical underwriting.
Even if subsidies are maintained for several more years, the absence of the mandate will put a damper on healthier people signing up for new plans. That, in part, is what drove this year’s large premium increases, along with insurers having deliberately low-balled their offerings in the early years in anticipation of receiving risk-adjustment payments from the federal government, which were never paid because Congress refused to fund those “bailouts.”
It’s ironic that this political turmoil is occurring just as there are signs that the new individual markets are stabilizing. Signs-ups for 2017 plans are strong. A Council of Economic Advisers issue brief released last week concluded this year’s premium increases were a “one-time correction.”
If there’s a death spiral in the individual insurance market because of repeal and delay, the blame will rest on Capitol Hill.