The Obamacare implementation disaster is far worse than even the most pessimistic critics predicted before the October 1 launch. The fiasco that has been on full public display for the past two months is so bad for the president and his party that it will have lasting political and policy effects, no matter what Republicans do at this point. But that doesn’t mean the GOP should be complacent. With the health-care law now more vulnerable than ever, Republicans in Congress should keep the pressure on to hasten its demise and pave the way for a far better alternative.
The first order of business remains thinking through what to do about canceled individual-market policies. Prior to last week, it would have been unthinkable that the White House would unilaterally adopt a policy allowing millions of people to stay in their individual-insurance plans in 2014. After all, notwithstanding that famous presidential pledge, a major focus of Obamacare is the termination of the individual insurance market and the shifting of that market’s participants into the Obamacare exchanges in 2014. An escape route that allows large numbers of current individual-insurance enrollees to avoid the exchanges in 2014 (even one with its own set of traps) raises the very real possibility that the exchanges will falter before they ever get started.
This does not mean that the GOP should be applauding the White House’s supposed “fix.” For starters, the administration’s plan is completely lawless, as many others have noted. The president has not altered any regulations or asked Congress to provide a carve-out for the 2013 insurance plans. He instead announced he would not enforce the law for a year, which the administration claims should be enough for state regulators and the insurance industry to reopen the canceled plans.
Of course, this is not the way to run the government. In the near term, it’s not at all clear that states and insurers aren’t still exposed legally. What if an insurance enrollee sues an insurer for not providing an Obamacare-required benefit? Would that have standing in court? Who knows?
The administration’s “fix” also comes with a lot of unwelcome Obamacare political baggage. The administration is shamelessly using its regulatory leverage to compel free advertising for its failing health law. In letters to enrollees, insurers opting to reopen their closed plans are required to include information that is clearly intended to promote Obamacare and the insurance plans sold on the exchanges.
Given all of this, House Republicans were more than justified in passing the legislation sponsored by Energy and Commerce Committee chairman Fred Upton last week, even after the president made his announcement. If enacted, the Upton legislation would provide legal certainty for state regulators and insurers that the individual-market plans of 2013 could be reopened and sold throughout 2014. Further, it makes it clear that enrollees in these plans would not be subject to the individual-mandate tax for not enrolling in an Obamacare-compliant plan in 2014.
Many observers have already pronounced the Upton legislation dead, given hostility to it from the White House and Senate Democrats. But if we have learned anything from recent weeks, it is that what seemed impossible yesterday may be possible, even likely, tomorrow. The unfolding Obamacare debacle could yet force Democrats into such a retreat that Upton and much else could pass the Senate and be signed into law.
Still, the GOP must realize that the White House’s “fix,” however sketchy, is better exploited than opposed. That means encouraging insurers to reopen their individual-market plans based on the administration’s imperfect assurances. Many insurers are balking at the large costs and operational hassles associated with reversing the cancellations. Republicans should not echo those sentiments. Yes, it will be expensive for insurers to change course. But the insurers are partly responsible for this mess by whistling past their own graveyards for the past four years. They decided some time ago to try to accept the baggage of Obamacare in exchange for a guaranteed market of compulsory health insurance. It was a bad deal that the industry is only now realizing was a historic mistake. Undoing the damage will entail some costs for the industry, but those costs will only increase if contingency planning does not begin right away.