ObamaCare by Another Name Is Still ObamaCare

If Republicans fail to repair the damage ObamaCare is causing, pressure to do so would only grow.
June 27, 2017 • Commentary
This article appeared on The Hill (Online) on June 27, 2017.

Senate conservatives, and ObamaCare opponents broadly, have panned the Senate healthcare bill as a charade. If conservatives help enact this or any other bill that leaves ObamaCare’s central architecture in place, they will take responsibility for the ongoing harm it causes, squander their one best shot at repeal and imperil other conservative priorities.

For seven years, Republicans have pledged to repeal ObamaCare in fullDonald Trump put it in writing. The Senate bill would instead preserve and even expand ObamaCare. Like the substantially‐​similar bill that already passed the House, the Senate bill is a snub to all who voted Republican because of that pledge.

Trump and other GOP leaders are intensifying the pressure on Senate conservatives to vote for the bill precisely because their hand is weak. Republican leaders need conservatives more than conservatives need to vote for this bill.

Let’s game out the scenarios.

The Senate bill could exacerbate what are already likely GOP losses in the 2018 midterm elections. The nonpartisan Congressional Budget Office projects the Senate bill would cause premiums to be 20‐​percent higher in 2018 and 10‐​percent higher in 2019 than under ObamaCare alone.

Democrats are already united and energized. If the Senate bill delivers two separate premium hikes leading up to the 2018 midterm elections, deflated GOP voters would stay home while angry consumers turn out to vote Democratic. Republicans would lose even more seats in Congress, jeopardizing the Senate bill’s tax cuts and spending constraints, not to mention other conservative priorities, like Supreme Court nominees.

If conservatives refuse, GOP leaders would have to offer them concessions. The longer they hold out, the larger the concessions. Why?

If Republicans fail to repair the damage ObamaCare is causing, pressure to do so would only grow. ObamaCare’s harmful government regulations would continue to drive premiums skyward, reduce quality and cause insurance to disappear in parts of the country.

Consumers would keep demanding relief. The GOP base would continue to demand its leaders follow through on their most prominent and long‐​standing campaign promise. Anti‐​tax conservatives would demand Congress take up ObamaCare again to repeal its tax hikes and facilitate tax reform.

GOP leaders would have little alternative but to work with conservatives. If they work with Democrats to rescue ObamaCare, they would face a rebellion that would also depress GOP turnout on Election Day. If Trump continues to bail out ObamaCare with payments to private insurance companies that two of his cabinet officials— not to mention a federal court — have declared unconstitutional, he would spark a similar revolt.

The conservative House Freedom Caucus won concessions only after showing they were willing to let a phony repeal bill fail. (They quickly decided they preferred losing to winning, though. The concessions did not materially improve the House bill, and most HFC members voted for it anyway.)

What changes would make the Senate bill worth passing?

Conservatives could demand an expansion of tax‐​free health savings accounts (HSAs) along the lines of legislation by Sen. Jeff Flake (R‐​Ariz.) and Rep. Dave Brat (R‐​Va.). Unlike ObamaCare and the Senate bill, which merely subsidize unaffordable care, “Large HSAs” would drive prices down.

Designed properly, Large HSAs could fit within the Senate bill’s revenue‐​loss figure and even have a tax‐​cut‐​multiplier effect. Since they would free workers to control $700 billion dollars of their earnings that employers currently use to choose and purchase their health benefits, they could deliver an effective tax cut larger than all Reagan and Bush tax cuts combined.

Alternatively, conservatives could agree to keep some ObamaCare Medicaid spending in exchange for structural reform and greater spending constraints. A system of block grants where federal outlays would not grow at all would allow Congress to give states greater federal funds in the initial years than they would get under ObamaCare.

If Congress included ObamaCare’s exchange subsidies, which would otherwise go to insurers, states could get far more than under current law, which would allow states to address preexisting conditions themselves. That would free Republicans to repeal ObamaCare’s regulations, as they promised to do, which would instantly stabilize the individual market and could reduce average premiums by an estimated 90 percent.

These options would materially improve on the status quo, even if they fall short of full repeal. The Senate and House bills would do neither. Those bills are not going to get better if Senate conservatives throw away their one best shot to repeal ObamaCare.

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