The effort to enact a health reform through the 2017 budget reconciliation process was reported dead at least half a dozen times this year only to return for another round. But now, with the clock on that process expiring at the end of the week and the Senate having again failed to rustle up the votes, it has well and truly died.
Lots of observers, including some very well placed ones in Congress, argue that health care will just be put aside now for a time and will wait for a later opportunity. The 2018 budget reconciliation bill is ultimately likely to avoid instructions for the Energy and Commerce Committee so that health reform couldn’t really be included in the next round of reconciliation. It’s time to turn to tax reform.
And yet, a form of the Obamacare debate may return much sooner than all of this suggests. The “put it aside” argument assumes that the Trump administration will just continue to administer Obamacare as it has been now that the legislative effort to alter or replace it has run aground. I think this is unlikely. It seems more likely that the administration will take a number of steps that will dramatically complicate the circumstances of the Obamacare exchanges in the near term.
This fall we may well see, for instance, a much expanded “hardship exemption” for the individual mandate that could render the mandate essentially void in the coming year, and I would think the administration will soon stop providing funds for the cost-sharing reduction payments if Congress does not appropriate money for those. Other steps are also possible (this might be a good time for health wonks to study up on the regulation of short-term, limited-duration insurance, for instance). But even just these two—and really either one of them—would greatly exacerbate the instability of the exchanges and create fresh problems for the 2018 plan year.
Whether or not they think such steps would be a good idea, Republicans in Congress would be wise to consider now what they would do if they were to happen, and were to create new pressure in both red and blue states for some kind of legislative package of stabilization measures. Such a scenario would make for a major distraction from tax reform, to put it mildly, and would open up some serious risks and opportunities for Republicans.
The risks would be large because a package like that would require Democratic votes, and could proceed with relatively few Republicans, so that if the pressure is great enough you can easily imagine a big insurer bailout passing, and without meaningful changes to the law. The opportunities might be significant because such a package would not be a reconciliation bill, so that Republicans eager for regulatory reforms in Title I of Obamacare would have more freedom of action to propose some in exchange for stabilization measures without the constraints of the Byrd rule.
But I think it’s fair to say that members of Congress (in both parties) are prepared for neither the risks nor the opportunities. There is a palpable sense of relief among many that they can turn away from health care for a while. Maybe they can. But they shouldn’t be so sure.