the national interest

Republicans Can’t Replace Obamacare, But They Might Be Able to Coerce Democrats to Do It for Them

Tom Price, incoming secretary of Health and Human Services. Photo: Drew Angerer/Getty Images

As they attempt to devise a strategy for fulfilling their promise to repeal and replace Obamacare, Republicans are converging on the realization that they cannot do it without Democrats. Their choice has boiled down to two basic options: Entice Democrats to cooperate on bipartisan changes, or blow up the law and try to coerce Democrats into giving them cover. The latter choice, the one favored by most Republicans, amounts to handing Democrats a gun and make them choose which hostages to shoot. The most aggressive Republicans are increasingly tipping their hand that they want to use coercion.

Why can’t Republicans just repeal and replace Obamacare on their own? One reason is Senate mechanics. Obamacare created regulations on health care, requiring basic benefits and affordable policies for older and sicker customers, along with subsidies to make the plans affordable. In the Senate, a majority can pass a bill that only changes taxes and spending. Any bill that does anything beyond change taxes and spending is subject to a filibuster. The Republicans could eliminate the subsidies that make Obamacare’s coverage affordable without any Democratic votes, but writing a replacement plan would mean changing regulations on insurance, which means they need enough votes to break a Democratic filibuster.

The second reason is that the Republican plans all involve imposing large doses of pain on millions of Americans. The GOP proposals would loosen regulations, and allow insurers to sell cheaper and skimpier plans to young and healthy consumers. Republicans focus entirely on the upside of these plans — and it’s true that young, healthy people would get to pay less. The downside is that they would load a lot more cost on people with expensive medical needs. If they let insurers charge less to the young, they’ll charge more to the old. Republicans want to trim, or even eliminate, the list of essential treatments that insurance must cover.

For instance, if (as Republicans propose) the rules are changed to let insurers sell plans that don’t cover maternity benefits, then the majority of people who aren’t going to have a child will pay a bit less, and the minority of people who might have a child will pay a whole lot more. That holds true for every other expensive medical condition. There’s no hidden source of funds, no magic of the marketplace, that can conjure money to pay for health care. Every dollar that Republicans will trim in subsidies or through skimpier insurance regulations means higher costs for somebody else.

The dilemma gets even more acute when it comes to paying for the subsidies, which is the most delicate part. Obamacare avoided making the majority of insured Americans finance coverage expansion, and instead paid for its coverage with a combination of tax hikes on the rich and lower payments to doctors, hospitals, and insurers (a price these groups grudgingly paid in return for having more paid customers). Republican plans would be financed by reducing or eliminating the tax deduction for health insurance — a change that would raise costs for a far larger pool of people. It would also lead to many of them losing their employer-provided insurance, which is popular and tends to be generous, and having to buy bare-bones plans on their own.

Republicans have spent six years enjoying the benefits of opposition, attacking every frustration with the status quo without owning any of the trade-offs. The sudden, unexpected prospect of facing political accountability for denying medical treatment to potentially millions of people rightly terrifies them. At the same time, enraging their base by failing to repeal Obamacare also rightly terrifies them.

So, how to get out of this trap? They need Democrats to supply the votes for a new health-care plan that Republicans can frame as a “repeal” of Obamacare. What’s more, they need Democrats to provide bipartisan cover to the invariably radioactive changes they would implement. It is likely Democrats would agree to minor changes to the program in order to secure its future. But getting Democrats to sign on to the aggressive plans favored by many conservatives, which would make basic medical care unaffordable for millions of the currently insured, Republicans need more leverage.

That’s the point of “repeal and delay.” Republicans would pass a law blowing up Obamacare’s subsidies, but with a delay of two years or so, long enough to last through the midterm elections. (Doing so would threaten to unravel the exchanges — since insurers aren’t going to stay in a system that has no future — but Republicans could probably keep it going by throwing money at them.) Then they’d argue the system is about to disappear, and force Democrats to help them put something, anything, in its place to avoid humanitarian catastrophe. They wouldn’t need to design a better system than Obamacare. They would just need something marginally less cruel than the disaster Obamacare replaced.

House Majority Leader Kevin McCarthy explained the calculus:

“You have a date certain that something is going away, a time period there, you know you need to have something there.”

In response to a question about whether replacement would pass in such a scenario, McCarthy imagined what reporters could ask recalcitrant lawmakers unwilling to sit down and bargain: “You know this is going away five months from now, and you’re going to avoid it? Here’s a time to get it done, but when that date came, and you did nothing? … You want to play politics?”

So Republicans would blow up the system, and after that, they would say that what’s done is done. If Democrats want to prevent a total humanitarian crisis, they can agree to some kind of Republican-proposed bare-bones plan, which would allow Republicans to offload responsibility for the pain they’d impose onto the other party. And if this is the strategy they pursue, Democrats need to decide in advance if they’re willing to negotiate with a gun to the head of 20 million Americans.

Republicans Might Coerce Democrats to Replace Obamacare