5 Reasons Why Obamacare Might Survive After All

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Photo: Pete Marovich/Bloomberg via Getty Images

Since 2009, Republicans have been waging holy war to destroy health-care reform and have taken special delight in the prospect that Donald Trump’s election might erase the most famous legacy of their hated adversary. It could well still happen. But as a party that did not expect to win finds itself suddenly charged with responsibility, true repeal of the law now looks much less probable than it has before.

1. Every Republican plan is painful. Politico has a report filled with Republican bravado about the ease with which they will sweep away Obamacare. Various party honchos insist that taking health insurance away from 20 million Americans will be like taking candy from a baby, because the babies don’t like the candy. “People have crappy insurance now,” says Rep. John Shimkus tells Jennifer Haberkorn. “They have high costs, they have high deductibles, it’s like they don’t have insurance. So this fear that they’re going to lose something that they don’t think they have anyway is crazy.” Sen. Johnny Isakson adds, “Most of those 20 million got bronze policies with a great big deductible and not much insurance, so I don’t know that there’s going to be a big backlash.”

As Haberkorn points out, Isakson’s facts are wrong — most customers in the exchanges have silver policies. But there is an even larger mistake here that reveals why Republicans plans will encounter so much political resistance.

The Republicans are not wrong to say that Obamacare gives people fairly crappy insurance. That is because what we mean by “good insurance” is something like Medicare or employer-sponsored insurance. It’s a plan that does not charge you higher rates if you’re old or have a medical condition in your family, and covers the vast majority of your medical expenses, with low deductibles. The downside to good insurance is that it’s extremely expensive. People who enjoy good insurance pay for it in ways that obscure its high costs — workplace insurance is covered by employers (who pay for it by giving their employees lower wages, a reduction that’s largely invisible to the employee), and Medicare is financed by taxes.

Obamacare is more market-based than traditional employer insurance. Unlike insurance provided by most employers, which charges every employee the same rate, the exchanges are allowed to charge old people up to three times as much as young people. The premiums are paid up front, and since people tend to shop for the cheapest premiums, they often get insurance with high deductibles.

It’s not unreasonable to call this insurance “crappy.” But not only is crappy insurance better than no insurance, all the Republican plans to replace Obamacare share the common trait that they will give people crappier insurance. Republicans plans all involve higher deductibles and greater discrimination against the old and sick than exchange plans allow. They would make the exchanges even less like the employer-based insurance that people like.

What’s more, their favorite financing mechanism for these plans is to end or limit the tax deduction for employer-based insurance. That would hit many, many more Americans in the pocketbook and disrupt their insurance, and push them out into the marketplace to buy crappy insurance they don’t like. There are substantive policy reasons why conservatives support these ideas. But the notion that they’ll be more widely liked is a fantasy.

2. Repeal and delay is hard. I’ve argued before that the Republican solution to this quandary is most likely to be repeal and delay. That means that Republicans would use a budget-reconciliation bill, which is a special bill that can only apply to tax and spending changes, and is immune from a filibuster. A reconciliation bill could be used to wreck Obamacare but not to build a replacement. (The reason is that you can use tax and spending changes to zero out the subsidies that make its insurance affordable, but not to eliminate the insurance protections, like the guarantee of coverage for people with preexisting conditions, or the requirement that insurance covers essential benefits.) Repeal and delay would mean quickly passing a repeal that wrecks the exchanges, but only starting in two years, and then Republicans could spend that time promising a terrific new plan that will be wonderful for everybody, and figure it out later.

As Sarah Kliff points out, it’s incredibly hard to announce a plan to blow up the health exchanges in two years without doing immediate damage. Impending destruction will encourage most or even all insurers to pull out immediately. Republicans will own the havoc. My response to Kliff is that they could fix this by throwing money at the insurers. Republicans have been unwilling to spend money, or do anything at all, to make the law work better. But that’s because Barack Obama has been president. Cutting checks that you don’t pay for is a hallowed tradition of Republican governance. So they might do that. On the other hand, maybe Kliff is right that the mess will be too much for them.

3. The filibuster. Remember, Republicans can destroy Obamacare with a majority, but they can’t write a new law with one as long as the filibuster exists. The repeal-and-delay plan assumes that at some point, Republicans will just kill the filibuster, which they can do with a simple majority vote. But already, two Republican senators have publicly attacked the idea of eliminating the legislative filibuster. That will bring the party perilously close to losing the 50 votes they need to eliminate it already.

Could it change over the Trump administration? Sure. I expect it to. But it might not. And if it doesn’t, then Democrats will be needed to join in the rewrite of the law. Which would mean that nothing like the right-wing fever fantasies could stand a chance of passage.

4. Some Republicans want bipartisanship. The most significant comments about party strategy may have come from Sen. Lamar Alexander of Tennessee, a Republican and a fierce critic of Obamacare. Alexander warned that Republicans should work together with Democrats rather than pass a bill on a party line: “Before the process is over, we’ll need a consensus to complete it, and I imagine this will take several years to completely make that sort of transition to make sure we do no harm, create a good health care system that everyone has access to and that we repeal the parts of Obamacare that need to be repealed.” And he urged that Republicans “be the rescue party instead of the party that pushes millions of Americans who are hanging by the edge of their fingernails over the cliff.”

In conjunction with his proposal to work with Democrats, Alexander’s argument would lean in the direction of marginal changes in the law rather than fundamental ones. It might be a plan like the one Republican staffers described to reporter Caitlin Owens: allowing insurers to cover fewer medical services, and charge higher rates to older or sicker customers. It would shift costs away from the young and healthy and onto the old and sick, and make insurance generally crappier, but the differences would be marginal rather than fundamental. The outcome would be much closer to what Obamacare created than to what came before it.

It makes further political sense that Republicans would want to enlist Democratic co-operation. Given that they would be imposing unpopular changes, they would get bipartisan cover rather than having to own a system with features many people don’t like. Democrats, in turn, would get a hedge against the alternative of total destruction and chaos.

5. Trump may want to compromise. Donald Trump has never cared about eliminating universal health insurance. Indeed, he has praised single-payer systems in the past.

It’s clear that Trump simply knows very little about the issue and probably cares little, too. He vacillates wildly, depending in part on the last person he spoke with. After meeting with Obama, Trump emitted conciliatory rhetoric about preserving Obamcare’s protection for patients — a promise that would be impossible to square with Republican policies. Trump has a political incentive to listen to Obama. The outgoing president is popular, and Trump is the least-popular incoming president in recorded history. He lost the national vote, is seen as racist by a great many people, and has faced unprecedented protests that clearly bother him. Obama has a unique ability to legitimize Trump. It’s hard to imagine Obama would continue to play this role after leaving office unless Trump is willing to protect Obama’s main legacies.

There is another potential source of advice Trump may heed. Josh Kushner, the brother of Trump’s son-in-law, Jared, founded a health-care startup designed to sell in the exchanges. He recently made the case for saving the law rather than scrapping it. Trump tends to take advice from family members, and it’s possible this connection would influence him.

To be sure, Trump will probably find it necessary to appease Republicans by following through on his promise to repeal Obamacare. On the other hand, he may also want to follow through on his promise to replace it with a beautiful plan that takes care of everybody, which is a promise that can’t be reconciled with what Paul Ryan wants. Trump has plenty of ways to make Congressional Republicans happy. He can give them regressive tax cuts, which is their favorite thing in the world, and lax regulation of the finance industry, which may be their second-favorite thing in the world. The only way to please everybody — Democrats in Congress, Obama, Republicans — is to sign a bipartisan plan that “replaces” Obamacare, and thus “repeals” it, but which keeps enough of its protections to maintain a bipartisan imprimatur. It seems more probable now than it did a week ago that this is what he’ll try to do.