The Corner

Embarassing Obamacare

As the calamity that is Obamacare unfolds upon the country, champions of genuine, market-based health-care reform will need to manage a careful balance: As Ramesh and I suggested in NR earlier this month, the conceptual and practical foundations of the law mean that it cannot be tinkered into harmlessness (let alone into a good system) but must be replaced with a different approach built on different foundations. Yet the fact that President Obama will be in office through 2016 means that no wholesale reform is likely to become law during that time. So Republicans need to find ways to highlight the law’s failures and put before the public their alternative vision and the policies that vision implies. Reforming Obamacare isn’t a workable option, but replacing it will have to begin with small steps where such steps are possible.

I think House Republicans have provided a modest but useful example of what that can look like with their bill to take money out of Obamacare’s “Prevention and Public Health Fund” (which is basically a slush fund used to pay for propaganda efforts on behalf of the law and to fill assorted implementation funding gaps created by the law’s haphazard design) and use it instead to allow more people with pre-existing conditions to make use of a high-risk pool to buy private insurance.

The high-risk pool in question is far from perfect, to be sure. It is the “Pre-Existing Condition Plan” that was actually created as a temporary measure in the Obamacare statute. As Jim Capretta and Tom Miller noted back in 2010 (in this superb piece about why high-risk pools must be an essential component of a conservative replacement to Obamacare), the champions of Obamacare had long attacked and derided the idea of high-risk pools, but when it came time to propose some way to help people with pre-existing conditions before the 2014 implementation of their larger takeover of American health care they turned to the very mechanism they had always dismissed. The high-risk pool they created is not one conservatives would have designed: it is federally run, for one thing, it imposes some unrealistic and impractical limits on premiums, it requires people to prove they have been uninsured for six months (and so is not a means to continuous coverage), and it was underfunded in a way that quite predictably caused HHS to have to close it off to new beneficiaries earlier this year and so leave sick people in the lurch. Democrats let it in to the statute because they thought of it more as a political tool for passage of the bill than a practical tool for coverage of the sick. But despite the intentions of Obamacare’s champions, it nonetheless points to a far, far better approach to addressing the problem of covering people with pre-existing conditions than Obamacare’s new architecture does. If such high-risk pooling was what Obamacare’s approach involved, rather than the outlawing of risk-based insurance (if not indeed of health economics) and its replacement with federal fiats, then Republicans could certainly have found ways to work with it.

What House Republicans now propose to do is to eliminate four years’ worth of funding from the Prevention and Public Health Fund to allow the risk pool to continue accepting new beneficiaries. It’s a way to undo one of the more egregious little pieces of the law and enable what is effectively an alternative to the Obamacare system to continue functioning at least until 2014. It allows Republicans to make the case for high-risk pools (especially for their approach to such pools—as embodied in the House Republican alternative to Obamacare from 2010 and essentially every other conservative health-care proposal in the past half decade), it allows them to highlight another element of Obamacare’s failed design, and it allows them to force the Democrats to choose between funding advertising for their coming train wreck of a health reform or supporting ongoing access to coverage for actual sick Americans.

Some conservatives have raised a significant substantive objection to this approach: They see it as propping up a piece of Obamacare rather than an alternative. I can certainly see the worry, but I think Dean Clancy of FreedomWorks answers their concern very ably here. The high-risk pool is not an element of Obamacare’s larger transformation but was rather a kind of practical concession the designers of Obamacare had to make given that (in order to fool the CBO) they had to wait until 2014 to start their new system. The House Republican bill is a way of arguing that the concession to reality is much better than the system Obamacare envisions. It’s at the very least a way of embarrassing Obamacare’s champions and of denying them the argument that their new system is the only way to cover people with pre-existing conditions.

The bill is a small but meaningful example of how it might be possible to simultaneously remove some elements of Obamacare while highlighting conservative alternatives in the period until conservatives have a chance to finally rid the nation of this travesty of health reform and put in place a genuine market-based approach.

Yuval Levin — Yuval Levin is the editor of National Affairs and a fellow at the Ethics and Public Policy Center.

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