Politics & Policy

Turn Obamacare Over to the States

Demonstrators in Washington DC protest a repeal of Obamacare (Reuters: Kevin Lamarque)
Republicans are out of other options.

The Better Care Reconciliation Act failed to unite Senate Republicans and is suspended in limbo. There’s talk that Republicans might vote on a “pure repeal” bill that stands no chance whatsoever of passage and is a horrible policy idea to boot. President Trump is pleading with Congress to keep trying to reach a consensus, and Republican legislators are scrambling to come up with something while much of the public wishes they’d just stop. In the meantime, Obamacare — which was already stumbling before Trump took office — is growing wobblier by the day.

So this is my last-ditch plea for the concept that Senator Bill Cassidy (R., La.) has been advancing this year, most recently in a somewhat vague proposal he offered with Senator Lindsey Graham (R., S.C.): If Republicans can’t agree on how the American health-care system should function, they should let the states handle it.

There’s no denying Cassidy’s idea is a Hail Mary. It has been batted around in one form or another since January, when he cosponsored a bill with Senator Susan Collins (R., Maine) that failed to attract much support. I’m just hoping against hope that Republicans will see this as their best bet now that other options have failed, and that maybe some Democrats will see that Obamacare must be reformed or it will die. If no conservative bill can bring together 50 of the Senate’s 52 Republicans (51 while John McCain remains out on medical leave), maybe a moderate bill can hit 50 with some Democratic support.

You might remember the Cassidy–Collins bill from earlier this year. It would allow states to keep Obamacare if they liked it, to experiment with a market-based alternative heavily dependent on high-deductible plans and Health Savings Accounts, or to opt out of Obamacare entirely and forfeit the accompanying federal funds.

The newer Graham–Cassidy proposal allows states even more freedom: Obamacare funding, including the money originally intended for the Medicaid expansion, is simply divided up into block grants and given to the states, with some regulations left in place (such as coverage for those with preexisting conditions) and the medical-device tax eliminated. Liberal states could reinstate the individual mandate — which would be repealed at the federal level — or put the money toward crazy socialist single-payer plans. Conservative states could try Health Savings Accounts and auto-enrollment for those who don’t sign up on their own. The laboratories of democracy could figure out what works and what doesn’t.

This would be a tough pill for conservatives to swallow in some ways. For one thing, the proposal would leave the majority of Obamacare’s taxes in place. For another, it’s not clear how well it would control future Medicaid growth, and Cassidy has said it would still require plans to cover a range of “essential health benefits.” (To be fair, essential-benefit mandates for insurers don’t directly affect the government’s budget, and thus arguably can’t be part of a bill passed under the “reconciliation” process. Outside of reconciliation, the bill would need 60 votes to overcome a filibuster.) Depending on how the votes fell in the imaginary world where the Senate got close to agreeing on this, these are things that could be changed to sway conservatives, especially if the Senate parliamentarian proved open to a broad interpretation of what’s allowed under reconciliation.

The Graham–Cassidy plan isn’t ideal for liberals, either, because it gives conservative states the option of demolishing a signature Democratic achievement, at least within their own borders. But it also gives blue states the latitude they need to plug Obamacare’s leaks or even expand the program. In addition, turning power over to the states — through a law bearing Trump’s signature — would eliminate the possibility that the current president will “sabotage” Obamacare deliberately. I think most Democrats would prefer Obamacare didn’t collapse, even if they believe Republicans would “own” such a failure politically.

In short, tossing Obamacare into the states’ laps wouldn’t give everyone precisely what they want. But it would allow every senator to tell his constituents that they are now free to set up whatever system they desire. Isn’t that better than nothing, no matter what you think the ideal system is?


On Health Care, try Not to be Too Sweeping

Why Can’t the Republicans Get Anything Done?

Are Republicans the Party of Bad Faith?

— Robert VerBruggen is a deputy managing editor of National Review.


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