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Forbes.com

 

Obama's 'Like Your Plan' Fiasco Will Make It Difficult To Repeal Obamacare

December 09, 2013

By Avik Roy

President Obama’s credibility has taken a significant hit since it became clear to the public that his signature promise�that "if you like your plan, you can keep your plan"�turned out to be dishonest. Polls now suggest a realistic chance that Republicans can retake the Senate in the 2014 mid-term elections. But the irony is that the GOP, having implicitly committed itself to protecting Americans’ existing insurance arrangements, has backed itself into a corner. What happens in 2017 when tens of millions of Americans will be on Obamacare-sponsored insurance plans? Republicans have pledged to repeal the law, even if many of those Americans come to like their new health plans.

GOP wins the short game and loses the long game

It’s a long-time historical pattern: Republicans and conservatives are really good at the short-term politics of health care, but in the long term, they usually lose. Any change in the system, whether for good or ill, will be opposed by the majority that were fine with how things were before, the status quo ante. But eventually, the status quo ante becomes the status quo.

For example, conservatives successfully blocked Medicare-type legislation for decades, until Lyndon Johnson’s dominating performance in 1964 led to overwhelming, filibuster-proof Democratic majorities. Now, conservatives are the defenders of Medicare, opposing Obamacare’s cuts to the program and the law’s efforts to ration Medicare’s benefits.

Progressives hope�and conservatives fear�that something similar will happen with Obamacare. That’s why Ted Cruz et al. were willing to shut down the government in order to prevent the program from being implemented. In May 2013, the Congressional Budget Office predicted that, by 2017, 36 million Americans will be on Obamacare-sponsored insurance plans: 24 million on the subsidized insurance exchanges, and 12 million on Medicaid due to the ACA’s expansion of that program.

By 2017, more than 24 million Americans will enroll in Obamacare

Now, thanks to the colossal foul-up of the Obamacare exchange software, we might not get to 24 million exchange enrollees by 2017. But let’s say it’s half that. That’s still 12 exchange plus 12 Medicaid equals 24 million Obamacare enrollees by 2017. Is the Republican nominee for President in 2016 really going to run on a platform of taking health coverage away from 24 million Americans? Especially after the Republicans ran in 2014 on ensuring that Americans can keep their health plans?

Some conservatives like to argue that, yes, repealing Obamacare will be politically viable in 2017, because Republicans will propose a "replace" plan that will offer superior coverage to the uninsured. But this is far from certain. First of all, while Republicans like Paul Ryan advocate offering substantial tax credits to the uninsured for the purpose of buying health insurance, Ryan’s position is not the GOP consensus.

The Republican Study Committee, a caucus of conservative Republicans in the House, explicitly rejected the Paul Ryan approach, preferring instead to standardize the tax deduction for health insurance in a way that only modestly expands coverage. The RSC plan has much to commend to it, but as a replacement for Obamacare, it is not an obvious political winner.

If there were a Republican President and a Republican Congress in 2017, you can also rest assured that the health care industry would go all-out to protect Obamacare from repeal. Insurers like WellPoint, Molina, UnitedHealth, and Centene make a lot of money administering Medicaid, and will resist any rollbacks of that program. Hospitals have been the most influential lobbyists in favor of Obamacare’s Medicaid expansion. The pharmaceutical industry, led by Pfizer, ran ads supporting Obamacare in 2009 and 2010, confident that the health law would expand the market for its products.

The previously uninsured vs. the previously covered

Ultimately, the political battle will come down to which side can mobilize the relevant constituency. In a previous post, I estimated that by the end of 2014, there will be around 107 million Americans, with previous health coverage, who will face higher costs under Obamacare. But 14 million Americans will potentially gain coverage by that time, albeit of mixed quality. Which side will vote with the most passion and cohesion?

Those favoring repeal hope that it’s the 107 million who hold sway. But they may not. The newspapers that today are filled with interviews of hapless Americans facing cancellations of their health plans due to Democrats, will in 2017 be filled with the same interviews of those facing cancellations due to Republicans.

The win-win solution: Focus on affordability and quality

There is a way out of this conundrum for Republicans. It is to endorse the goal of expanding coverage to the uninsured, while vociferously objecting to the ways in which Obamacare increases the cost, and decreases the quality, of that coverage.

We spend $450 billion a year on Medicaid, despite the fact that the program achieves no better health outcomes than having no insurance at all. The Obamacare exchanges are so poorly designed that they dramatically increase the underlying cost of health insurance, despite the fact that these plans have higher-than-average deductibles, and narrow networks of doctors and hospitals.

A Republican plan focused on repealing the parts of Obamacare that make insurance inordinately expensive, and replacing the Medicaid expansion with a more market-based approach, could substantially reduce the fiscal burden of the law, while ensuring that Americans can keep their health coverage. Doug Holtz-Eakin and I have proposed one such strategy; there are others.

There are many Republicans and conservatives who are aware of the political trap that they have set for themselves. But they are afraid to voice that concern publicly, for fear of being branded as RINOs: Republicans In Name Only.

It’s hard to imagine a Republican winning the 2016 GOP primary by stepping back from the party’s insistence on repealing Obamacare. But it’s also doubtful that a Republican can win the 2016 general election by throwing 24 million Americans off of their health plans. And therein lies the rub.

Original Source: http://www.forbes.com/sites/theapothecary/2013/12/09/the-irony-is-that-obamas-like-your-plan-fiasco-will-make-it-difficult-to-repeal-obamacare/

 

 
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