Politics & Policy

The High Stakes of Repeal-and-Replace

Supporters of the Affordable Care Act celebrate after the Supreme Court up held the law in 2015 (Reuters: Joshua Roberts)
How Republicans proceed on Obamacare will have huge political implications, so they should take the time to get it right.

The Affordable Care Act failed to live up to expectations in part because of the way the Obama administration and the Democratic Congress chose to tackle the complicated, multifaceted issue of health-care reform.

In the minds of the Democrats, all of the problems in health care had to be addressed in one massive bill. The sales pitch for Obamacare set up unrealistic expectations: Families could expect their premiums would go down by $2,500 per year, and if they liked their plans and doctors, they could keep their plans and doctors. It had to be passed quickly, before the president’s political capital had dwindled; some Democrats admitted they didn’t even have the time or patience to read every one of the bill’s thousand-plus pages before voting on it.

In January, President-elect Trump offered a similarly grandiose promise that everyone would be pleased with the replacement legislation:

“We’re going to have insurance for everybody,” Trump said. “There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” People covered under the law “can expect to have great health care. It will be in a much simplified form. Much less expensive and much better.”

What’s more, Trump said before his inauguration that he expected Congress to repeal Obamacare and then “very quickly or simultaneously” pass legislation to replace it.

But replacing such a massive law is much easier said than done, and even repealing it will prove more complicated than it sounded on the campaign trail. At least 40 Democrats will be strongly inclined to filibuster any repeal, so Republicans will have one of two options: They could nuke the filibuster entirely, which would leave them with no real power to block legislation if and when Democrats regain control over the chamber someday, or they could attempt to gut the law through the budget-reconciliation process, which is filibuster-proof. But not all of Obamacare can be repealed through reconciliation.

“There are no Democrats signing up to help us with this,” Senator Pat Toomey (R., Pa.) warned while discussing Obamacare at the Koch winter summit in Indian Wells, Calif., this past weekend. At the same event, Senator James Lankford (R., Okla.) said he was wary of replacing Obamacare with a similarly gargantuan and complicated bill: “We can’t replace a 2,700-page bill with another 2,700-page bill. This is going to be a series of bills.”

Lankford predicts that the end of Obamacare will take around six months. First there will be a series of decisions by Health and Human Services Secretary Tom Price once he is confirmed and situated in office. The original language of Obamacare left enormous power in the hands of the HHS secretary; the bill language listed more than 1,000 actions “the Secretary shall” take. Under one of Trump’s first executive orders, Price will have the authority to conclude that the tax penalty for not having insurance under the individual mandate represents a “serious burden” on violators and exempt them from paying it.

At the Koch meeting, Lankford said he envisioned Price’s actions as secretary being supplemented with a partial repeal though reconciliation legislation. Then there would be a series of replacement bills, which would take three years to fully implement.

There are a lot of ways voters could get upset at Republicans in the next two years if they botch the repeal-and-replace process.

One replacement option that seems to be gaining some momentum on Capitol Hill is the “Patient Freedom Act,” introduced by Republican senators Bill Cassidy (La.) and Susan Collins (Maine). The primary strength of this bill is a federalist approach that leaves states a lot of leeway to set health-care policy, including the option to keep Obamacare as it is. Cassidy and Collins think this could defuse some of the opposition to repeal in deep-blue states.

The system Cassidy and Collins advocate is one where states would get almost all of the funding that they currently get under Obamacare, but uninsured individuals would automatically be enrolled in a Roth Health Savings Account, a high-deductible health plan, and a basic pharmacy plan. The idea is that Obamacare funding would go directly to patients.

Of course, some Republicans will contend that repeal legislation that leaves blue states with the option to keep the status quo isn’t good enough. Avik Roy, one of the GOP’s sharpest health-care wonks and founder of the Foundation for Research on Equal Opportunity, points out that the slow-and-steady, bit-by-bit approach has its own risks.

“If you really want to tackle cost control, there are special interests who have an interest in blocking any little bill,” Roy says. “The only way it works is if the things a special interest opposes are combined with something they support. For example, the hospital lobby supported Obamacare’s Medicare cuts because they got 20 million new customers on the other end. If you do things piecemeal, you increase the odds that K Street knocks out key pieces of the puzzle.”

The stakes of the debate are incredibly high. The 2010 Republican wave arrived just in time to give the party leverage in the state redistricting process, which afforded them a slight but noticeable advantage throughout the rest of the decade. As Vox observes, “In 36 states, the governor who will be in office for the next redistricting will be elected in 2017 or 2018. And in 31 states, half or more of state senators whose terms extend through the next redistricting will be elected in 2017 or 2018.”

There are a lot of ways voters could get upset at Republicans in the next two years if they botch the repeal-and-replace process: There could be a backlash among those who lose their health insurance, the conservative grassroots could complain if the repeal doesn’t go far enough, or a generalized anger could take root if the public perceives that Republicans have made health insurance more complicated, more expensive, or more frustrating.

In other words, it’s an exceedingly tricky needle for Republicans to thread, and the consequences for the party would last well into the next decade if they fail. So at the very least, they’d be wise to proceed with caution.

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