Are ‘Repeal and Replace’ and ‘Reform’ for Obamacare Interchangeable?

by Avik Roy

Ramesh is kind enough to cite a recent piece of mine for Forbes, describing it as a continuation of my “lonely campaign to get conservatives to drop the idea of ‘repealing and replacing’ Obamacare and instead to embrace reforming it.” But it’s only lonely if by lonely he means “shared by a large plurality of the electorate.”

Let me cite the data. A Pew Research poll asked whether or not politicians should “make the law work as well as possible,” or “make it fail.” The “work” side won 30–19 overall, and 36–19 among independents. (“Make it fail” won among Republicans, but only by three points: 43–40.)

Now, the Pew poll used skewed language. So let’s look at some other surveys. A poll from the Kaiser Family Foundation offered four options: “keep the law as is,” “keep the law in place and work to improve it,” “repeal the law and replace it with a Republican-proposed alternative,” and “repeal the law and not replace it.” 49 percent of respondents chose “work to improve,” with only 29 percent choosing repeal (18 percent) or repeal-and-replace (11 percent). Independents reflected the overall numbers, with 44 percent choosing “work to improve,” with 32 percent supporting repeal (23 percent repeal and 9 percent repeal-and-replace).

Not convinced? A Bloomberg News poll found 51 percent supporting “it may need modifications but we should see how it works” versus 34 percent supporting repeal. NPR tallied 53 percent for “implement and fix” and 44 percent for repeal.

You get the idea. Now this is not to say that public sentiment is in any way a substitute for good policy. But it is to remind conservatives that any agenda we wish to enact will require public support, in the form of electoral victories, in order to succeed. Remember also that any replace plan will require the consent of 60 members of the United States Senate (as would any other type of reform).

Ramesh’s principal concern appears to be that if we move away from the “slogan” of “repeal and replace,” we’ll fail to “galvanize opponents of the law” in upcoming elections. But while his main concern appears to be 2014, mine is 2016, during which those who benefit from the law will be equally galvanized by the fear that their coverage will be taken away.

As he notes, the end result of a reform-based approach is not entirely dissimilar from that of the best repeal-and-replace plans, such as the one from Senators Coburn, Burr, and Hatch. But if you can achieve the same result, with less disruption of people’s existing insurance arrangements, why wouldn’t you choose the less disruptive path?

On that score, Ramesh argues that migrating the Medicaid population onto a reformed, deregulated set of insurance exchanges would be more disruptive than block-granting Medicaid (the traditional repeal-and-replace plank). I don’t agree. The incomes of poor people tend to be quite volatile, leading to a high amount of churn between Medicaid and the exchanges. Migrating the Medicaid population onto the exchanges would offer them higher-quality coverage and care, with far less churn and disruption.

Done the right way, it would result in cleaner lines of responsibility between the states and the federal government. Paired with exchange-based Medicare reform, such an approach would substantially reduce federal spending while actually covering more people than Obamacare will. (For those who are interested in learning more about what a reform-based approach might look like, Doug Holtz-Eakin and I have sketched out the framework here and here. Stay tuned for an in-depth, white-paper treatment of the approach, via the Manhattan Institute, in several months’ time.)

I appreciate that continuing to embrace repeal has its galvanizing effects — on our small slice of the electorate. And I agree that a good repeal-and-replace plan would be a dramatic improvement upon the status quo. But if we can shrink government by a comparable if not greater amount, in a way that is much more aligned with public sentiment (and therefore much more likely to actually become law), shouldn’t we give it some thought?