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Are Republicans Setting a Trap for Themselves on Obamacare “Repeal”?

Philip Klein had an excellent run-down the other day of the current thinking among Republicans on Capitol Hill on Obamacare “repeal,” which will be a partial repeal with a replace, or parts of a replace, later. The obvious political problem is that this will cause even more disruptions for people: 

Many healthcare experts across the ideological divide have raised potential problems with the “repeal and delay” tactic. Most notably, insurers are currently losing money in Obamacare, and contemplating whether to continue participating. But if they know that the subsidies for people to purchase insurance are going to disappear, there’s no reason to stick around. Speeding up the exodus of insurers from Obamacare would mean more people would see their coverage disrupted, likely generating a fierce political backlash as Republicans get blamed for the disintegration of the market.

Republicans I spoke to were dismissive of this criticism. Were such a market collapse to occur, they would argue that Obamacare is really the culprit. That is, under the Obamacare status quo, the individual market is already collapsing. Insurers cannot attract enough young and healthy people to offset the cost of covering older and sicker enrollees, they are losing billions of dollars, and they are rapidly exiting markets, leaving Americans with higher premiums and fewer choices. Left to its own devices, Obamacare as we know it won’t survive — and repeal is the first step in fixing the problem, they argue.

Who knows? Maybe they are right. Obama certainly was able to blame Bush for nearly everything for a long time. But it’s more likely that as soon as Republicans effect major changes in the law that they will be blamed for any resulting negative consequences.

It’d be one thing if this political risk came in the course of a Big Bang repeal, but Republicans are only talking about a partial repeal:

Another issue with a reconciliation bill that wouldn’t repeal Obamacare in its entirety is that it would leave in place regulations that could still wreak havoc with the insurance market. One particularly costly regulation is known as community rating, which says that, among other things, insurers can’t charge older Americans more than three times as much for insurance than they charge younger Americans. Though in theory this works out well for those who are older, it also makes insurance much more costly for younger Americans — to the point at which they are having trouble justifying purchasing it, despite the mandate to do so. Keeping this regulation in place while repealing the mandate would exacerbate problems in the individual market.

Republicans I spoke with say that such regulatory changes could be tweaked by HHS, as well as handled in subsequent replacement legislation.

And the replacement will also only be piecemeal: 

When it comes to “replace,” Republicans tell me that people need to disabuse themselves of the idea that “replace” means that there will necessarily be one large “replacement” bill. Instead, replacement is going to happen over time through the regulatory process and legislative changes that could be enacted in a series of shorter bills. 

Let me stipulate that I’m grateful for anything Republicans can do on Obamacare and we are light years away from where we would have been if Trump hadn’t won. But there are a couple of worries here: 1) the GOP is thinking of the Obamacare partial-repeal as a way to get an “early win,” but it may play very differently in political terms; 2) there will presumably be a score pointing out that the partial-repeal will cost millions of people their insurance and we have no idea how Trump will react to it–it’s possible that he distances himself from what Republicans are doing the first time he’s asked about it in an interview; 3) the root of the problem here is that Republicans don’t have 60 votes for a full repeal and replace. A Republican senator told me the other day that he believes the difficulties that the party will have grappling with Obamacare will force the GOP to reconsider the filibuster altogether, although it’s hard to see senate Republicans getting a consensus among themselves for that.

(Ramesh wrote about all this in his latest Bloomberg column.)



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