Why Do Louisiana Republicans Want to Replace Obamacare with Obamacare?

For the latest evidence that bipartisanship occurs in politics when conservatives agree to rubber-stamp liberal policies, look no further than Louisiana. Last week, that state’s senate passed a health-care bill by a unanimous 38-0 margin.

The bill provides that, if a court of competent jurisdiction strikes down all of Obamacare, Louisiana would replace that law with something that…looks an awful lot like Obamacare. Granted, most remain skeptical that the Supreme Court will strike down all (or even most) of Obamacare, not least because the five justices who upheld its individual mandate in 2012 all remain on the bench. Notwithstanding that fact, however, the Louisiana move would codify bad policies on the state level.

If a federal court strikes down the health-care law, the bill would re-codify virtually all of Obamacare’s major insurance regulations on the state level in Louisiana, including:

  • A prohibition on pre-existing condition exclusions;
  • Limits on rates that insurers can charge;
  • Coverage of essential health benefits “that is substantially similar to that of the essential health benefits required for a health plan subject to the federal Patient Protection and Affordable Care Act as of January 1, 2019,” including the ten categories spelled out both in the text of Obamacare and of the Louisiana bill;
  • “Annual limitations on cost sharing and deductibles that are substantially similar to the limitations for health plans subject to the federal Patient Protection and Affordable Care Act as of January 1, 2019”;
  • “Levels of coverage that are substantially similar to the levels of coverage required for health plans subject to the federal Patient Protection and Affordable Care Act as of January 1, 2019”;
  • A prohibition on annual and lifetime limits; and
  • A requirement for coverage of “dependent” children younger than age 26.

The Louisiana bill does allow for slightly more flexibility in age rating than Obamacare does. Obamacare permits insurers to charge older individuals no more than three times younger enrollees’ premiums, whereas the Louisiana bill would expand this ratio to 5-to-1. But in every other respect, the bill represents bad or incoherent policy, on several levels.

First, the regulations above caused premiums to more than double from 2013 through 2017, as Obamacare’s main provisions took effect. Reinstating these federal regulations on the state level would continue the current scenario whereby more than 2.5 million people nationwide were priced out of the market for coverage in a single year alone.

Second, the latter half of the Louisiana bill would create a “Guaranteed Benefits Pool,” essentially a high-risk pool for individuals with pre-existing conditions. Given that the bill provides a clear option for individuals with pre-existing conditions, it makes little sense to apply pre-existing condition regulations—what the Heritage Foundation called the prime driver of premium increases under Obamacare—to Louisiana’s entire insurance market. This provision would effectively raise healthy individuals’ premiums for no good policy reason.

Third, the legislation states that the regulations “shall be effective or enforceable only” if a court upholds the Obamacare subsidy regime, “or unless adequate appropriations are timely made by the federal or state government” in a similar amount and manner. Curiously, the bill does not specify who would declare the “adequa[cy]” of such appropriations. But should a court ever strike down most or all of Obamacare, this language provides a clear invitation for Democratic Gov. John Bel Edwards to demand that Louisiana lawmakers raise taxes—again—to fund “adequate appropriations” reinstating the law on the state level.

As on the federal level, conservatives in Louisiana should not fall into the trap of reimposing Obamacare’s failed status quo for pre-existing conditions. Liberal organizations don’t want to admit it, but the American people care most about making coverage affordable. Obamacare’s one-size-fits-all approach undermined that affordability; better solutions should restore that affordability, by implementing a more tailored approach to insurance markets.

Recognizing that they will get attacked on pre-existing conditions regardless of what they do, conservatives should put forward solutions that reduce people’s insurance costs, such as those previously identified in this space. Conservatives do have better ideas than Obamacare’s failed status quo, if only they will have the courage of their convictions to embrace them.

This post was originally published at The Federalist.

24 New Federal Requirements Added to the Graham-Cassidy Bill

Last week, I outlined how a white paper Sen. Bill Cassidy (R-LA) released essentially advocated for Obamacare on steroids. That plan would keep the law’s most expensive (and onerous) federal insurance requirements, while calling for more taxpayer dollars to make that expensive coverage more “affordable.”

Unfortunately, Cassidy also would extend this highly regulatory approach beyond mere white papers and into legislation. A recently disclosed copy of a revised Graham-Cassidy bill—originally developed by Cassidy and Sen. Lindsey Graham (R-SC) last fall—imposes two dozen new requirements on states. These requirements would undermine the bill’s supposed goal of “state flexibility,” and could lead to a regime more onerous and expensive than Obamacare itself.

18 New ‘Adequate and Affordable’ Coverage Rules

Specifically, that coverage must:

  • Include four categories of basic services defined in the State Children’s Health Insurance Program (SCHIP) statute:
    • Inpatient and outpatient hospital services;
    • Physicians’ surgical and medical services;
    • Laboratory and X-ray services, and
    • Well-baby and well-child care, including age-appropriate immunizations;
  • Include three categories of additional services also defined in the SCHIP statute:
    • Coverage of prescription drugs;
    • Vision services; and
    • Hearing services;
  • Include two other categories of services as defined by Obamacare:
    • Mental health and substance use disorder services, including behavioral health treatment; and
    • Rehabilitative and habilitative services and devices;
  • Comply with actuarial value standards set by the SCHIP statute:
    • Cover at least 70 percent of estimated health expenses for the average consumer; and
  • Comply with requirements included in eight separate sections of the Public Health Service Act, as amended by Obamacare:
    • Section 2701—Rating premiums only based on age (with older applicants charged no more than three times younger applicants), family size, geography, and tobacco use;
    • Section 2702—Required acceptance for every individual or employer who applies for coverage (i.e., guaranteed issue);
    • Section 2703—Guaranteed renewability of coverage;
    • Section 2704—Prohibition on pre-existing condition exclusions;
    • Section 2705—Prohibition on discriminating against individuals based on health status;
    • Section 2708—Prohibition on excessive waiting periods;
    • Section 2711—Prohibition on annual or lifetime limits; and
    • Section 2713—Requiring first-dollar coverage of preventive services without cost-sharing (i.e., deductibles and co-payments).

As noted above, “adequate and affordable health insurance coverage” would include many of Obamacare’s insurance requirements, and in at least one way would exceed them. Whereas Section 1302(d) of Obamacare requires selling insurance with an actuarial value—that is, the percentage of medical expenses paid for the average individual—of at least 60 percent, the revised Graham-Cassidy would require “adequate and affordable” coverage with an actuarial value of at least 70 percent.

If asked, Graham and Cassidy might state that these requirements would only apply to a certain subset of the population. After all, the revised bill text indicates that each state “shall ensure access to adequate and affordable health insurance coverage (as defined in clause (ii))”—the clause referring to the 18 separate requirements listed above—“for [high-risk individuals].” The bill lists the brackets in the original, which might indicate that Cassidy’s office intends to apply these 18 separate coverage requirements only to plans that high-risk persons purchase.

Thankfully, the new draft removes the “population adjustment factor” allowing CMS to rewrite the block grant formula unilaterally. But even as it took away CMS’ power to alter the funding formula, new language on page 15 of the revised draft allows CMS to cancel states’ block grant funds for “substantial noncompliance.” That provision, coupled with the revised bill’s lack of definition regarding “affordable” coverage and “high-risk individual” provides a future Democratic administration with two clear ways to hijack the block grant program.

For instance, a new administration could define “high-risk individual” so broadly that it would apply to virtually all Americans, subjecting them to the 18 costly coverage requirements. A new administration could also define “affordable” in such a manner—for instance, premiums may not exceed 5 percent of an individual’s income—that states would have to subsidize insurance with sizable amounts of state funds, in addition to the federal dollars included in the block grant. Any state failing to comply with these edicts could see its entire block grant yanked for “substantial noncompliance” with the bureaucratically imposed guidelines.

It seems paradoxical to assert that a bill can be both too prescriptive, imposing far too many requirements on states that undermine the supposed goal of “state flexibility,” and too vague, giving vast amounts of authority to federal bureaucrats. Yet somehow the section on “adequate and affordable health coverage” manages to do both.

Two New Required Uses of Block-Grant Funds

Supporters of the bill would argue that these supposed “guardrails” will prevent states from subsidizing Medicaid coverage, or creating some other government-run health program. But as I noted last week, Obamacare has its own “guardrails” regarding state waivers, which undermine any attempt to deregulate insurance markets.

By adding these new “guardrails,” Graham-Cassidy would essentially replicate Obamacare, albeit with slightly different policy objectives: “The Cassidy plan would give states the ‘flexibility’ to do what Bill Cassidy wants them to do, and only what Bill Cassidy wants them to do. That isn’t flexibility at all.”

Block Grant Reductions with Multiple Risk Pools

On Page 31, the bill includes new language requiring a reduction in block-grant funds, by a percentage not specified, for states electing to create multiple risk pools. Under current law, Section 1312(c) of Obamacare requires insurers to place all individual insurance market enrollees—whether they purchase coverage through the exchange or not—in a single risk pool.

If a state elects to choose multiple risk pools and uses a “substantial portion” of its block grant to subsidize insurance with an actuarial value of under 50 percent, then the state would see an unspecified reduction in its block grant. This language contains many of the flaws of the other provisions described above: It nowhere defines what comprises a “substantial portion” of the block grant, and penalizes states that may choose to create multiple risk pools and subsidize only catastrophic insurance coverage, thus belying Graham-Cassidy’s promise of “state flexibility.”

3 New Requirements for State Waivers

The revised Graham-Cassidy text moves and alters language regarding state waivers of Obamacare’s federal insurance requirements, and in so doing makes three substantive changes. (The original language started in the middle of page 143 of the bill; the new language begins on the top of page 42 of the revised bill.)

First, and perhaps most disturbingly, the revised bill requires the Department of Health and Human Services to waive Obamacare’s insurance requirements for a state only if “such state establishes an equivalent requirement applicable to such coverage in such state.” Taken literally, this provision could mean that states could “opt-out” of Obamacare’s federal requirements if and only if they enshrine those exact same requirements in state law—rendering any supposed “flexibility” under Graham-Cassidy completely nonexistent.

Graham and Cassidy may not have meant to craft language with such a literal interpretation. They may mean to say, for instance, that a state can waive out of Obamacare’s age-rating requirements (which prohibit insurers from charging older people more than three times what they charge younger people) if they establish a more permissive regime—for instance, five-to-one age rating—on the state level.

But taken literally, that’s not what the current bill text says. That vague language raises serious questions about the authors’ intent, and why they chose such unclear, and arguably sloppy, bill language.

Second, the section imposes two new requirements on states selecting multiple risk pools. As noted above, those states would have to comply with the 18 new requirements regarding “adequate and affordable” health coverage, and states creating multiple risk pools could see their block grant reduced as a result.

In addition, however, states must also guarantee that insurers offering coverage in one risk pool offer coverage in all of them. Moreover, premiums charged “by a health insurance issuer for the same health coverage offered in different risk pools in the state [may] not vary by more than 3 to 1.”

The first requirement echoes the Consumer Freedom Amendment offered by Sen. Ted Cruz (R-TX) last year. That amendment allowed insurers to offer plans that did not comply with Obamacare’s requirements, so long as they continued to offer one Obamacare-compliant plan. The second requirement would effectively limit the extent to which insurers could charge individuals more on the basis of pre-existing conditions or health status.

Two Dozen (More) Reasons for State Concern

Both individually and collectively, these two dozen new requirements inserted into the most recent version of Graham-Cassidy present problems for conservatives. The myriad requirements would sharply limit the bill’s ability to deliver lower premiums to consumers—one major goal of “repeal-and-replace” legislation.

More broadly, though, the revised bill drifts further away from any semblance of conservative objectives. While Graham-Cassidy purports to provide more flexibility to states, the revised bill would instead ensnare them in numerous requirements that would impede any attempt at innovation.

Like the proverbial Lilliputians who attempted to tie down Gulliver, the new bill looks to rob states of their ability to manage their own insurance markets and lower premiums for residents, one federal requirement at a time.

This post was originally published at The Federalist.

Graham-Cassidy and Conservative Health Reform

In its February budget submission to Congress, the Trump administration endorsed legislation “modeled after” the bill Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) introduced last year, which would devolve much of Obamacare’s entitlement spending to the states.

The budget claims this legislation “would allow states to use the block grant for a variety of approaches in order to help their citizens.” But based on the most recent public version, the Graham-Cassidy bill needs significant changes to deliver true flexibility to states.

The administration endorsed Graham-Cassidy because it believes the legislation would give states flexibility to embrace a “variety of approaches” to health care and health insurance. But would the most recent version of the bill allow Idaho to implement its reforms without federal intrusion? In a word, no.

In at least two respects, Idaho’s plan violates the many federal requirements that would remain intact under Graham-Cassidy. Idaho’s proposal to allow annual limits of over $1,000,000, and its proposal to allow surcharges of up to 50 percent for individuals who do not maintain continuous coverage, both contravene the Washington-imposed regulatory apparatus Graham-Cassidy retains.

This raises an obvious question: If the only state-based insurance reform plan proposed to date violates Graham-Cassidy, then how much “flexibility” does the legislation really provide? To paraphrase Margaret Thatcher, conservatives have not spent the past eight years fighting to roll back a Washington-based, regulatory leviathan imposed by a Democratic Congress, only to see that leviathan reimposed by a Republican one.

To its credit, the Trump administration has worked to roll back Obamacare’s regulatory regime. Consistent with its promise in the budget to generate “relie[f] from many of [Obamacare’s] insurance rules and pricing restrictions,” the administration has proposed rules allowing greater access to short-term insurance coverage and association health plans, both of which are exempt from some or all of the Obamacare statutory restrictions.

But make no mistake: While these actions will give some individuals freedom from Obamacare’s restrictions, they will not give states the control they deserve over their own insurance markets. To give the states the freedom that the Trump administration promised, Congress must repeal the federally imposed regulatory superstructure Obamacare created. Only by doing so will Washington give states the true flexibility to explore alternative visions of health care for their citizens—Graham-Cassidy’s stated goal.

If Congress does not act to give states freedom, a future Democratic administration will reimpose each and every health care regulation the Trump administration loosened—and many more besides. The Center for American Progress made as much crystal-clear recently, when in releasing the Left’s next plan for (more) government-run health care, it proposed legislation that would “leave little to no discretion to the Administration [of the day] on policy matters.”

To the Left, Obamacare isn’t about power so much as control. As President Reagan famously stated, the “little intellectual elite in a far-distant capital” think they can “plan our lives for us better than we can plan them ourselves.” To liberals’ unquenchable desire to arrogate more power in Washington, conservatives must respond with freedom—freedom for states, and ultimately to businesses and individuals, to buy the coverage they want, and innovate in ways that can lower health spending.

The Graham-Cassidy bill has other flaws. It retains most of Obamacare’s spending (albeit disbursed to the states through the block grant) and all of its major tax increases. But at its core, the debate over health care remains one of control: Whether Washington will try to micromanage 50 states and more than 300 million people, or whether states and citizens can lead the way. We stand with the people—and hope that, after eight years of promises, the Republican Congress finally does likewise.

This post, co-written with former Sen. Jim DeMint, was originally published at The Federalist.

What You Need to Know about the Proposed Short-Term Plans Rule

On Tuesday morning, the Trump administration issued a proposed rule regarding short-term health insurance plans. The action represents the second prong of the Trump administration’s strategy, outlined in last October’s executive order, to offer regulatory relief to insurance markets. The Department of Labor acted on the first prong, issuing a proposed rule expanding access to association health plans, in January.

As I noted in October, the Obama administration issued a rule in October 2016 designed to limit short-term plans. The Public Health Service Act specifically exempts “short-term, limited-duration insurance” from the definition of “individual health insurance coverage,” exempting such plans from all of Obamacare’s new, federally imposed regulatory regime (though they are regulated by states).

The Trump Administration’s Proposal

The Trump administration’s proposed rule would revise the disclosure slightly (in part to reflect the repeal of Obamacare’s individual mandate, set to take effect in January 2019), and restore the prior definition of short-term coverage to “less than 12 months.”

The proposed rule also requests comment on the ways to facilitate streamlined renewal of short-term plans. As I noted in an article last year, limiting individuals’ ability to renew policies harmed people who develop illnesses while on short-term plans:

Jimmy Kimmel forgot to mention it, but prohibiting coverage renewals harms individuals with pre-existing conditions, because it forbids customers who develop a pre-existing condition while on short-term plans from continuing their coverage. In discouraging these short-term plans, the Obama administration preferred individuals going without coverage entirely over seeing anyone purchase a policy lacking the full panoply of ‘government-approved’ benefits.

The Trump administration can and should rescind this coercive rule and its perverse consequences immediately.

Effective Dates and Impact

The administration estimates that the proposed rule would lead only about 100,000-200,000 individuals to switch from individual coverage to short-term plans, only about 10 percent of whom would have qualified for Obamacare insurance subsidies on exchanges. The administration also estimates the rule would raise spending on premium subsidies by $96-168 million annually. Because the individuals shifting to short-term coverage would be younger and healthier than average, they would slightly increase premiums, and thus premium subsidies, on the insurance exchanges.

However, these comparatively modest estimates on both the coverage and cost fronts suggest that short-term plans may have less of an impact than conservatives had hoped—or liberals have feared. Time will tell if the predictions prove an over-estimate or under-estimate; perhaps more definitive actions to allow for the guaranteed renewal of short-term coverage will increase their popularity.

What Should Be the Next Steps?

Now that it has proposed this rule, the administration should take regulatory action on another front, by stopping a movement in Idaho to offer non-compliant health plans. Last month, the state’s insurance department offered guidance to insurers about new coverage offerings. The new plans could:

  • Impose limits on pre-existing conditions for individuals without continuous coverage;
  • Limit benefits provided to $1 million annually;
  • Not offer maternity care in all cases (although each carrier must sell one plan with maternity coverage); and
  • Charge older individuals up to five times as much as younger individuals when calculating premium rates.

But the Idaho guidance hints at one big problem. It instructs insurers selling the plans in question to disclose to consumers that “This policy is not fully compliant with federal health insurance requirements.”

Therefore, as a matter of law, I cannot support the Idaho effort, not because I support or want to sustain Obamacare—I don’t—but because I support and want to sustain the rule of law, which is more important than any single piece of legislation. Unfortunately in this instance, federal law supersedes state law, which means the federal law must prevail.

I wrote in January 2017 that the Trump administration had an obligation to enforce the individual mandate. Likewise here, the administration has an obligation to enforce the Obamacare statute, and either redirect Idaho’s efforts to bring them into compliance with the law—perhaps through a Section 1332 innovation waiver, although that waiver may not bring the state sufficient flexibility—or quash them. The administration has a constitutional obligation to “take care that the laws be faithfully executed,” and it should not follow the Obama administration’s example of picking and choosing which laws it wishes to enforce.

Better yet, Congress can and should repeal the regulations that represent the beating heart of Obamacare. They have a roadmap to do so, even with a slim Senate majority. Such action would allow Idaho, and 49 other states, to innovate to their heart’s content to provide more affordable coverage to their residents—an outcome consistent with the rule of law, and federalism, that conservatives could embrace whole-heartedly.

This post was originally published at The Federalist.

Biden Precedent Provides Roadmap for Repealing Obamacare with 51 Votes

With Congress having effectively repealed its individual mandate in the tax relief bill, what should Republicans do about Obamacare now?

While eliminating a penalty for Americans who cannot afford government-approved health insurance removes a financial burden on low-income families, it does not give people the freedom to purchase the coverage they do want to buy. Doubtless the president’s October executive order, when implemented, will provide more affordable options through regulatory relief. But ensuring that relief remains intact through future administrations will require legislative action.

How Joe Biden Used His Senate Presidency

While Democrats did not use budget reconciliation—a Senate procedure allowing bills to pass with a simple 51-vote majority, instead of the 60 votes needed to overcome a filibuster—to pass Obamacare, they did use a reconciliation bill to “fix” the law they passed. In March 2010, the Senate considered, and President Obama eventually signed, a reconciliation bill that removed the odious “Cornhusker Kickback” for Nebraska, and made other amendments to the health law.

That reconciliation bill also changed Obamacare’s regulatory regime. Specifically, Section 2301(a) of the reconciliation measure applied four insurance requirements—limiting waiting periods to join employer plans, banning lifetime limits, ending rescissions by insurers, and extending coverage to “dependents” under age 26—to “grandfathered” health plans established before the law’s enactment. In addition, Section 2301(b) of the bill amended Obamacare itself, removing language that limited under-26 “dependent” coverage to unmarried individuals.

During consideration of the reconciliation bill on the Senate floor, Iowa Republican Chuck Grassley objected to including these provisions. He argued that Section 2301 of the bill violated the Senate’s “Byrd rule,” designed to prevent the inclusion of matters with a merely incidental fiscal component on a budget reconciliation bill. In a colloquy memorialized in the Congressional Record, Vice President Biden, acting in his capacity as president of the Senate, overruled Grassley, and said the provisions in question did in fact comply with the “Byrd rule.”

“Grandfathered” plans do not qualify for Obamacare subsidies, and many do not qualify for any tax preference. Yet Biden held that the new requirements on “grandfathered” plans held enough of a fiscal nexus to comply with the “Byrd rule” for budget reconciliation. As a result, the “Biden precedent” allows the Senate to enact—or to repeal outright—health insurance rules through the reconciliation process.

Democrats Paved the Way for Obamacare Repeal

Moreover, the particular insurance requirements included in Section 2301(a)—especially the restrictions on employer waiting periods and the ban on rescissions—carry a relatively small fiscal impact. Because Vice President Biden ruled that Democrats could enact these comparatively small requirements in a reconciliation bill, Senate Republicans should have every right to repeal more costly restrictions, such as those on essential health benefits and actuarial value, outright through budget reconciliation, rather than relying upon the cumbersome state waiver processes included in last year’s bills.

Senate sources indicate that, recognizing the “Biden precedent” would allow for a robust Obamacare repeal, Democratic staffers tried to limit its impact last year. They argued to Elizabeth MacDonough, the Senate parliamentarian, that changes covered by that precedent were targeted in scope, technical in nature, and limited only to plans that qualify for subsidies.

But a textual analysis of the 2010 reconciliation bill shows that it changed requirements for all types of health insurance, not just “grandfathered” plans, and not just those that qualified for subsidies. And because Biden overruled Republican objections that these changes to insurance rules exceeded the scope of budget reconciliation in 2010, Republicans can and should use that precedent to undo Obamacare’s regulatory regime.

Obamacare’s insurance rules represent the beating heart of the law, necessitating a massive system of subsidies and tax increases to make this newly expensive coverage “affordable.” Because Democrats used the “Biden precedent” to impose some of those rules through budget reconciliation, Republicans have every opportunity to repeal these requirements outright through a reconciliation bill. They should take that opportunity, for removing the regulatory regime would effectively repeal Obamacare—and permanently restore health care freedom to the American people.

This post was originally published at The Federalist.

Lessons of the AHCA Collapse

Like the British evacuation of Dunkirk more than seven decades ago, Friday’s abrupt decision to halt proceedings on the American Health Care Act (AHCA) prior to a House vote represented victory only in that it averted an even costlier defeat—an embarrassing floor vote seemingly destined to fail, or passage of a bill unloved by wide swathes of the public and lawmakers alike.

Whether that decision is ultimately viewed as a “deliverance”—as Winston Churchill dubbed the 1940 Dunkirk evacuation—will depend in no small part on whether lawmakers can, both individually and collectively, learn the right lessons from an entirely predictable defeat.

Republicans Need to Remember How to Govern

Leadership outlined its strategy—such as it was—in a February 27 Wall Street Journal article: “Republican leaders are betting that the only way for Congress to repeal the Affordable Care Act is to set a bill in motion and gamble that fellow GOP lawmakers won’t dare to block it.”

Irrespective of what one thinks of the bill’s policy particulars—whether the bill represents a positive, coherent governing document and vision for the health care system—this thinking demonstrates that Republicans have to re-learn not just how to govern, but also how to legislate.

As a legislative strategy, the House’s gambit represented a puerile cross between the “chickie run” in “Rebel Without a Cause” and Hans Christen Andersen’s “The Emperor’s New Clothes.” Daring lawmakers to challenge the process, and attempting to bully and browbeat them into submission—“testosterone can get you in trouble,” as Rep. Mark Sanford (R-SC) reportedly noted during one meeting—does not a durable process make. Unsurprisingly, that process broke down after a mere 18 days.

In circumstances such as these, there is a fine line between learning lessons and pointing fingers. Focusing on the personalities behind the legislative failure would only further enflame tensions, while serving little productive purpose. On the other hand, understanding the reasons the legislation was in many ways doomed from the start can help prevent future calamities. Of the flawed premises that lay behind the legislative strategy, three seem particularly problematic.

1. Starting with the House

The House’s decision to consider the legislation first seemed ill-considered at the time, given the difficulties the chamber encountered the last time it moved first on repealing Obamacare. In the fall 2015, Congress considered and passed, but President Obama vetoed, repeal legislation under special budget reconciliation procedures. Passing the bill represented a “dry run” testing what a Republican Congress could do to dismantle Obamacare, but for the Democratic president who remained in the White House.

But as I noted the week after last November’s election, the House’s 2015 repeal reconciliation bill suffered from numerous procedural flaws. That legislation originally repealed Obamacare’s Independent Payment Advisory Board (IPAB), even though such Senate procedures meant that this provision, with an incidental fiscal impact, could not remain on a budget reconciliation bill. The House-reported legislation also increased the deficit in the years beyond the 10-year budget window, subjecting it to a potentially fatal point-of-order in the Senate.

Given that near-death experience fewer than 18 months ago, it made much more sense for the Senate to take the lead in crafting a reconciliation measure. At minimum, House staff needed to solicit greater feedback from the Senate regarding that chamber’s procedures during the drafting process, to ensure they wrote the bill consistent with the Senate’s budget reconciliation rules. Neither happened.

House leadership claimed they wrote their bill to comply with the Senate’s reconciliation rules. But experts in Senate procedure could readily see that AHCA as released suffered from multiple procedural flaws, several potentially fatal to the entire bill. Last week, days before its scheduled floor consideration, the relevant House committees released a managers amendment re-drafting the measure’s tax credit, precisely because of the procedural flaws in the initial version.

All of which makes one wonder why the House insisted on initiating action. The Senate not only has more detailed and arcane procedures to follow than the House, Republicans also hold a narrower majority in the upper chamber. While no more than 21 of 237  House Republicans (8.9 percent) can defect on a bill passing solely with Republican votes, no more than two of 52 Senate Republicans can defect in the upper chamber, a much narrower (3.9 percent) margin.

2. The Unrealistic Timetable

The day before House leadership released a document outlining their vision for what became AHCA, I published a lengthy analysis of the legislative environment. I concluded that any legislation featuring either comprehensive changes to Medicaid or a refundable tax credit—the former I generally favored, the latter I did not—just could not pass in the timetable allotted for it:

The likelihood that House Republicans can get a comprehensive “repeal-and-replace” bill—defined as one with either tax credits, Medicaid reform, or both—1) drafted; 2) cleared by the Senate parliamentarian; 3) scored favorably by CBO [the Congressional Budget Office]; and 4) with enough Member support to ensure it passes in time for a mark-up on March 1—two weeks from now—is a nice round number: Zero-point-zero percent.

Likewise the chances of enacting a comprehensive ‘repeal-and-replace’ bill by Congress’ Easter recess. It just won’t happen. For a bill signing ceremony for a comprehensive ‘repeal-and-replace’ bill, August recess seems a likelier, albeit still ambitious, target.

Nothing in the above passage proved inaccurate. House leadership even skipped steps in the process I outlined—going forward with markups without a CBO score, and not writing the bill to comply with Senate procedure until just before a scheduled House vote—yet still couldn’t meet their targets. This would lead most people to believe those targets were just too ambitious.

Two vignettes show the problems caused by the sheer haste of the process. First, the managers amendments released last Monday night had to be re-written on Tuesday night. In both cases, the House committees had to submit second-degree amendments “to address drafting issues,” because the original managers amendments had no fewer than ten separate drafting errors among them.

Second, the managers amendment included an extra pot of funds to increase the refundable tax credits given to those near retirement age. However, the legislation created that pot of money not by increasing the refundable credits, but by lowering thresholds for a deduction available to those who itemize medical expenses on their tax returns.

The decision to provide the additional funds through a deduction, rather than by adjusting the credits themselves, was almost certainly driven by the mechanics of budgetary scoring, and ultimately the bill’s timetable. While the Joint Committee on Taxation (JCT) could estimate the relatively straightforward financial effects of a deduction quickly, altering the tax credit levels for individuals aged 50-64 would create knock-on effects—would more individuals take the credit, would more individuals retire early and drop employer-sponsored coverage, etc.—taking CBO staff a week or more to model.

So, rather than “wasting” time coming up with a policy and finding out the effects of said policy, prior to House passage, congressional staff instead created a $90 billion “slush fund” and pledged to sort the details out later.

Just before Obamacare’s passage in March 2010, former House Speaker Nancy Pelosi infamously said “we have to pass the bill so that you can find out what is in it.” House Republicans took her multiple steps further: By including a “slush fund” designed to change later in the process, and proceeding to both committee markups and a vote on House passage without a final CBO score, congressional leadership guaranteed that anyone who voted for AHCA would not by definition have known what was intended to be in the bill, let alone the fiscal effects of such policies.

The end result was a group of members in vulnerable districts who voted for the bill in committee without a CBO score—and could suffer serious, if not fatal, political consequences for having done so. Some of these moderates hold substantial disagreements with conservatives on how to structure an Obamacare repeal. But it was not conservatives that compelled the moderates to cast a tough vote for the legislation in committee without a CBO score analyzing the bill’s fiscal and coverage impacts—it was the hyper-aggressive timetable.

3. Unproductive White House Coordination

While publicly President Trump and others made statements insisting that his administration was “100 percent behind” the House Republican plan, the divisions within the administration were an open secret on Capitol Hill. From staff to officials, many had misgivings about the policy behind the bill, the legislative tactics and strategy, or both.

Those differences helped affect the ultimate outcome. Ryan attempted to turn his legislation into a “binary choice”—either support this bill, or support Obamacare—granting conservatives some concessions during the drafting process, but few thereafter. By contrast, factions within the administration attempted to woo conservatives and fought House leadership, which resisted making changes.

Ironically, had the administration halted negotiations sooner, and demanded an immediate vote earlier last week, they might have had a better chance of winning that tally. (Whether that victory would have ultimately proved Pyrrhic is another story, but they might have eked out a victory nonetheless.) But because the White House and congressional leadership weren’t on the same page, the former’s negotiations with conservatives left moderates to slowly trickle away from the bill, such that by Friday, it was virtually impossible to find a coalition to reach 216 votes whichever way leadership turned.

Even as the momentum slowly sapped from the bill, the administration and Capitol Hill leaders remained at odds on tactics. The New York Times reported on Saturday that some in the administration wanted to hold a House vote, even an unsuccessful one, to find out who opposed President Trump. But making such a demand misunderstands the dynamic nature of votes in the House of Representatives.

While AHCA might have passed narrowly, it would not have failed narrowly. Once a critical mass of 30 or so Republican “noes” signaled the bill’s clear failure, members would have abandoned the politically unpopular legislation en masse—likely with the implicit or explicit support of House leadership. Having witnessed these “jailbreak” votes in the House, it’s possible that, had the White House forced the issue, the bottom could have fallen out on support for the bill. As a tactic to snuff out disloyal behavior, calling a vote on a doomed bill would have yielded little in the way of political intelligence—only more political damage.

Underneath Tactical Errors Is Philosophical Disagreement

Beneath the obvious tactical errors lie some fundamental disagreements within the Republican party and the conservative movement about Obamacare, the future of our health-care system, and even the role of government. As I have written elsewhere, those differences do not represent mere window-dressing. They are as sizable as they are substantive.

That divide between ‘repealers’ and ‘replacers’ represents a proxy for the debate between reducing costs and maximizing coverage.

On the one hand, the conservative wing of the party has focused on repealing Obamacare, and lowering health costs—namely, the premiums that have risen substantially under the law. By contrast, moderates and centrists remain focused on its replacement, and ensuring that those who benefited from the law continue to have coverage under the new regime.

That divide between “repealers” and “replacers” represents a proxy for the debate between reducing costs and maximizing coverage, a debate that precedes Obamacare by several decades, if not several generations. Some have argued that facts on the ground—the individuals gaining coverage as a result of Obamacare—necessitate an approach focused on maintaining coverage numbers.

Others believe that “repeal means repeal,” that Republicans ran, and won, elections on repealing the law—including as recently as five months ago—and that breaking such a deeply ingrained pledge to voters would represent political malpractice of the highest order.

The drafters of the House bill attempted to split the ideological divide, in part by retaining the popular parts of Obamacare while minimizing the law’s drawbacks. Both the House bill and the Better Way plan that preceded it maintained Obamacare’s restrictions on pre-existing conditions, its requirement that insurers cover dependents under age 26, and its prohibition on annual and lifetime limits for health insurance.

But policy decisions come with trade-offs, and in health care in particular those trade-offs can prove troublesome. Barack Obama did not wish to impose a mandate to purchase health insurance, having fought against one during his 2008 primary campaign; but CBO scoring considerations forced him to endorse one in the bill that became Obamacare. Similarly, the “popular” insurance regulations that Republican leadership maintained in its bill were the same ones that raised premiums so appreciably when Obamacare went into effect.

The AHCA approach of repealing Obamacare’s mandates and subsidies while retaining most of its insurance regulations created what Yuval Levin, a policy wonk close to Ryan, called a “twisted, fun-house mirror approach” to prior conservative health policy that yielded “substantive incoherence.” Dropping the individual mandate while retaining most of the insurance regulations created a CBO score that showed substantial coverage losses while failing to lower premiums appreciably—the worst of all possible policy outcomes.

The ideological divisions within the Republican Party, and the incoherent muddle of legislation that attempted to bridge the two, may have been overcome had the House released its bill the morning after the election, on November 9. But it did not release the bill on November 9, or on December 9, or on January 9, or even on February 9. The House introduced its bill on March 6, with the goal of passing legislation through both chambers by April 6. That timetable didn’t envision reconciling ideological differences so much as it hoped to steamroll them. It was all-but-guaranteed not to end well.

Lessons For the Future

What then of the future? One can only but hope that Republicans follow the example of Kipling’s poem “The Lesson,” written during the Boer War: “Let us admit it fairly, as a business people should; We have had no end of a lesson: It will do us no end of good.”

But what are those lessons, and what good might result from heeding them? While the policy differences within factions of the Republican Party are sizable, the only way to bridge them lies through an open, transparent, and deliberative process—negotiating outcomes among all sides from the start, rather than imposing them from on high through fiat.

If, as President Reagan famously noted, “personnel is policy,” so too then process provides a key to optimal policy making. A good process by itself cannot create good policy, but bad process will almost assuredly result in bad policy outcomes. In the short- and long-term, five principles can provide the initial glimmer of a path forward from last Friday’s dark outcome.

1. Let the Senate Lead

The procedural details surrounding budget reconciliation, and the narrower margins in the upper chamber, both augur toward the Senate re-starting any action on health care. As a practical matter, tensions remain far too high—with tempers short, friendships among members and staff frayed, and patience thin—for the House to initiate any legislative action for at least the next few weeks.

On upcoming legislation ranging from appropriations to tax reform to additional action regarding Obamacare, the “world’s greatest deliberative body” will have to exercise its deliberative powers. The ideological gaps are no less narrow in the House than in the Senate—can Mike Lee and Susan Collins reach consensus on a path forward regarding Obamacare?—but the recriminations and scars of the past month smaller.

If the Senate, with its smaller margins and arcane procedures, can deliver a quality policy product, the House, having seen its legislation sink in mere weeks, might be much more inclined to adopt it as its own.

2. Listen

House leadership rightfully notes AHCA had its origins in the Better Way policy white paper released last June. Prior to that document’s release, leadership staff spent significant time and effort reaching out to members, interest groups, the think-tank community, and others to gain thoughts and feedback on their proposals.

But actual legislation is orders of magnitude more complex than a white paper. Moreover, Better Way and AHCA deviate from each other in multiple important respects. The Better Way proposal includes numerous provisions—incentives for wellness, conscience protections for health care professionals, and proposals to repeal sections of Obamacare regarding Medicare, and Medicare Advantage—never included in AHCA, or mentioned in any great detail as part of the House’s “three-phase” approach.

Meanwhile, AHCA doubles the funding for grants to states when compared to the Better Way proposal, and uses significantly different parameters for the state grants than the 2009 House Republican alternative to Obamacare referenced in the Better Way document.

It’s possible to speculate on why House leadership made all these changes, but leadership itself made very little attempt to communicate exactly why they made them, or even that they were making them at all. Saying that Better Way led to AHCA is like saying the Model T led to the DeLorean. The former are both health-care proposals just as the latter are both cars, but each differ in significant ways.

The process that led from Better Way to AHCA was almost as significant as the process that led from the Model T to the DeLorean, but was opaque to all but a few closely held staff. Even lawmakers who understood and supported every single element of the Better Way plan could rightfully feel whipsawed when presented with AHCA, told it was a “binary choice,” and they had to publicly support it within a few weeks of its introduction, or otherwise they would be voting to keep Obamacare in place and undermine a new president.

When the Republican Study Committee unveiled its health-care legislation in 2013, its public release culminated a months-long process of consultation and scrutiny of the legislative text itself. RSC staff reached out to dozens of policy experts (myself included), and spent hours going through the bill line-by-line to make sure the legislation would accomplish its intended goals, while keeping unintended consequences to a minimum.

AHCA would have benefited immensely from this type of under-the-radar analysis, rather than subjecting legislation not yet ready for prime time to the intense scrutiny that came with a white-hot political debate and a hyper-accelerated timeline.

3. Trust Experts

A note at the bottom of page 25 of a leaked draft of AHCA provides an important hint toward a larger issue. The bracketed note, in a passage regarding per capita cap reforms to Medicaid, calls for staff to “review with CMS [the Centers for Medicare and Medicaid Services] any conforming amendments required.”

Congressional staff I spoke with over the past few weeks questioned whether anyone within the relevant agencies had in fact reviewed the legislation, to provide the technical expertise necessary to ensure that AHCA could be implemented as written, and would actually result in a workable health-care system.

Games of legislative hide-and-seek and talk of ‘binary choices’ preclude the received wisdom of all but the select few participating in the policy-making.

At the time the legislative process began, the Department of Health and Human Services (HHS) had relatively few political appointees—no more than a few dozen out of about 150 total spots filled, and a CMS administrator not confirmed until the week prior to the scheduled House vote. The combination of a stretched staff and mistrust between political and career appointees within the agencies could well have limited the exchange of critically important details regarding how to draft, and implement, the legislation.

In addition to working with career personnel at the agencies, congressional staff should also utilize the institutional knowledge of their predecessors. While working for the House Republican Conference in 2009, I made it a point to start the Obamacare debate by finding out what I didn’t know, reaching out to those who had gone through the “Hillarycare” debate 15 years prior. My idea came from an unlikely source—former senator Tom Daschle, who in his 2008 book “Critical” described how lawmakers went through a “Health Care University” of policy seminars in 1993. In trying to replicate those seminars for both members and staff, I hoped we could obtain some of the collective wisdom of the past that I knew I lacked.

As I had previously noted in November, most of the senior Republican health-care staff working on Capitol Hill during the Obamacare debate in 2009-10 have moved on to other posts. But they, and others like them, are not far removed from the process. Based on my experience, most would gladly offer technical guidance and expertise; in many cases, even the lobbyists would do so with “client hats” removed, in the hopes of arriving at the best possible product.

But reaching out in such a manner requires a deliberative and inclusive process; games of legislative hide-and-seek and talk of “binary choices” preclude the received wisdom of all but the select few participating in the policy-making.

4. Be Honest

The House Ways and Means Committee’s section-by-section summary of AHCA illustrates the dilemma lawmakers faced. Page three of the document, discussing verification of eligibility for the new tax credit, states that “the Secretary of the Treasury is empowered to create a system—building upon already developed systems—to deliver the credit.”

There’s just one minor detail missing: The “already developed systems” for verifying eligibility Ways and Means referenced are Obamacare eligibility systems. This goes a long way toward explaining the omission: If the House is using an Obamacare eligibility system to deliver a refundable tax credit (also included in Obamacare), how much of the law is it really repealing?

Capitol Hill leadership could never reconcile the inherent contradictions in their product. On MSNBC, Ways and Means Chairman Kevin Brady (R-TX) called AHCA “the best opportunity to deliver on our promise to repeal the awful law of Obamacare”—eliding the fact that the bill explicitly retains and utilizes portions of that “awful law.” When pressed, leadership staff relied upon absurd, legalistically parsed statements, afraid to admit that the bill retained portions of Obamacare’s infrastructure.

These Clintonian definitions—“It depends upon what the meaning of the word ‘repeal’ is”—do nothing but build mistrust among members and staff alike. At least some in the policy community felt that House leaders were relying upon Elizabeth MacDonough, the Senate’s parliamentarian, as a de facto human shield—claiming the House couldn’t repeal portions of Obamacare under budget reconciliation, when in fact leadership wouldn’t, for policy or political reasons.

The fact that House leaders claimed their bill comported with reconciliation requirements, yet had to re-write major portions of AHCA at the last minute because it did not, gives added credence to this theory.

Whenever “repeal-and-replace” legislation comes back before Congress, the leaders and committees preparing the legislation should include a list of all the major provisions of Obamacare not repealed by the measure, along with clear reasons why. Even if some members want a more robust repeal than that offered, transparency would at least prevent the corrosive mistrust—“You’re not being up-front about this, so what other things are you hiding?”—that comes from an opaque process.

5. Be Humble

More than perhaps any bill in recent memory, AHCA represented a feat of legislative hubris. As a policy matter, Obamacare imposed a more sweeping scope on the nation’s health-care system. But the tactics used to “sell” AHCA—“We’re doing this now, and in this way. Get on board, or get out of the way”—were far more brutal, and resulted in a brutal outcome, an outcome easily predicted, but the one its authors did not intend.

There is a different approach, one I’ve seen on display. Some job interviews are thoroughly unremarkable, but two during my tenure on Capitol Hill stand out—the chief of staff who described himself as a “servant leader,” one who ensures all the members of the team have the tools they need to succeed; and the legislative director who told me, “We want to make sure you have a voice.” Of course I took both jobs, and felt myself privileged to work in such inclusive and empowering environments.

In some ways, the process that led to AHCA represents the antithesis of servant leadership, with members being given a virtual ultimatum to support legislation many neither liked nor understood. But in its purest form, public service should be just that—service—to one’s constituents, and, in the case of elected congressional leaders, to the members who chose them.

A more humble, inclusive, open, and transparent process will not guarantee success. The policy differences among the disparate Republican factions are real, and may not ultimately be bridgeable. But an opaque, authoritarian, and rushed process will almost certainly guarantee failure, as it did in the case of AHCA.

Listening Is Crucial

Ultimately, the failure to legislate on AHCA lay in a failure to listen to the policy concerns of Members, and to the warning signs present from the start. One can only hope that Republicans learn from this proverbial mule-kick, and start listening to each other more carefully and more closely. That process can yield the wisdom and judgment that comes from understanding, which can only help to heal the many breaches within the party following the events of recent weeks.

On November 8, Republicans received an important gift from voters—the chance to serve the country. Recovering from last week’s setback will require leaders of a humbled party to recommit themselves to service, both to the American people and to each other, in service of a common good. The chance to serve the American people is solely within the public’s gift. That gift, if and when squandered, will likely not be renewed for a long time.

This post was originally published at The Federalist.

What You Need to Know about Republicans’ Newest “Replace” Legislation

Below please find some quick fast facts on House Republicans’ “repeal-and-replace” legislation, introduced on Monday evening. (The Energy and Commerce title is here, and the Ways and Means title is here.)

What’s changed since the leaked discussion draft, dated February 10?

Several provisions have been revised, updated, deleted, or added in the intervening three weeks:

  • Increase in funding for community health centers, from $285 million to $422 million;
  • Revision to the repeal of Disproportionate Share Hospital (DSH) cuts—the cuts are restored two years sooner for states that have not expanded Medicaid under Obamacare (in the prior draft, the cuts were restored immediately for all states);
  • Several new Medicaid program integrity provisions, including those prohibiting lottery winners from retaining benefits, restricting retroactive eligibility, prohibiting presumptive eligibility for individuals who cannot provide proof of citizenship, and requiring states to make eligibility re-determinations every six months in many cases;
  • A $10 billion pool of funding ($2 billion per year for calendar years 2018 through 2022) for states that did not expand Medicaid under Obamacare;
  • Change to the inflation formula (medical inflation, instead of medical inflation plus one percent) for Medicaid per capita caps when adjusted forward from 2016 to 2019—for years after 2019, the formula remains unchanged at medical inflation plus one percent;
  • Change to the Patient and State Stability Fund, including a change to the title (previously called the State Innovation Grant program), language permitting CMS to intervene in a state if a state declines to apply for grant funding, and change in the formulae and criteria, which generally focus more upon achieving stability (based on insurers’ medical loss ratios)—the funding levels remain unchanged, at $100 billion from 2018 through 2026;
  • Removal of language requiring HHS to verify special enrollment periods, codifying a change proposed by the Department in regulations last month;
  • Removal of language permitting the perpetual offering of “grandmothered” health insurance plans—that is, plans purchased after Obamacare’s enactment, but prior to its major insurance regulations taking effect in 2014;
  • Prohibition on “grandmothered” plans receiving Obamacare subsidies in 2018 and 2019—although individuals in grandfathered plans (i.e., those purchased prior to Obamacare’s enactment) and coverage purchased off of Exchanges could qualify for subsidies;
  • Delayed repeal of Obamacare’s tax increases until 2018, as opposed to 2017 in the leaked discussion document;
  • Repeal of the Obamacare “Cadillac tax” only until 2025;
  • Removal of repeal of Obamacare’s economic substance doctrine tax increase;
  • Means testing to the refundable tax credit—individuals with incomes below $75,000, and families with incomes below $150,000, would qualify for the full credit, while individuals with incomes above $215,000, and families with incomes above $290,000, would not qualify for the credit; and
  • Removal of a cap on the exclusion for employer-provided health insurance.

What’s changed since the reconciliation legislation passed in 2015/2016?

  • Longer transition period (three years, instead of two)
  • Expansion of Obamacare subsidies during the transition period
  • Medicaid expansion remains, albeit at state option and with enhanced funding sunset for beneficiaries who enroll after January 2020
  • Elimination of repeal of risk corridors and reinsurance
  • Delay of repeal of Obamacare taxes (take effect next year, not this year, and “Cadillac tax” repeal sunsets in 2025)
  • Elimination of repeal of economic substance doctrine

What remains since the reconciliation legislation passed in 2015/2016?

  • Repeal of prevention “slush fund”
  • Defunding of certain Medicaid providers, which will eliminate federal funding for Planned Parenthood for one year
  • Repeal of Exchange subsidies (albeit delayed)
  • Repeal of enhanced federal funding for Medicaid expansion (albeit delayed, and with a phase-out/freeze instead of a funding “cliff”)
  • Repeal of DSH cuts (albeit delayed/modified)
  • Elimination of individual and employer mandate penalties
  • Repeal of most of Obamacare tax increases (albeit delayed)

What major parts of Obamacare does the bill repeal?

  • Prevention “slush fund”
  • Exchange subsidies, beginning in 2020
  • Enhanced federal match for states that expanded Medicaid, beginning with individuals enrolled after January 1, 2020
  • The individual and employer mandates (penalties set to zero) effective December 31, 2015—mandates would not apply to 2016 tax filings currently taking place
  • All tax increases, except for 1) the economic substance doctrine (not repealed at all); 2) the “Cadillac tax” on high-cost health plans (repealed only until 2025)

What major parts of Obamacare does the bill NOT repeal?
Entitlements

  • Exchange subsidies revised and expanded (extended to off-Exchange populations) through 2020
  • Exchange subsidies would expire in 2020—one year later than the 2015/2016 reconciliation bill
  • Medicaid expansion available to states as an optional population beginning in 2020—the prior 2015/2016 reconciliation bill repealed categorical eligibility for able-bodied adults entirely

Tax Increases

  • “Cadillac tax”—only repealed until 2025
  • Economic substance doctrine
  • Other tax increases (except the employer and individual mandates) not repealed immediately

Major Insurance Regulations

  • Pre-existing conditions (the bill modifies the existing requirements, by allowing insurers to vary premiums by up to 30 percent for those without continuous coverage)
  • Community rating by age (the bill expands existing rate bands, and permits states to opt-out of the federal standard if they so choose)
  • Under-26 mandate
  • Prohibition on annual and lifetime limits
  • Medical loss ratio requirements
  • Preventive service mandate (including coverage of contraception)
  • Insurance Exchanges
  • Risk corridors and reinsurance

ALL the Medicare savings

“Repeal and Replace” Becomes “Repeal vs. Replace”

In the past few weeks, various articles summarizing Republican moves on health care have attempted to analyze the factions and dynamics driving the debate. Why, some reporters have asked, are Republicans struggling to draft a consensus alternative to Obamacare, given that the party had seven years to create such a plan?

Apart from the point that Democrats faced their own not-insignificant divisions on health care eight years ago, much of the debate within Republican ranks has its roots in fundamental disagreement about what an alternative to Obamacare should do. If two people or factions can’t agree about the ultimate goals of legislation, it shouldn’t be surprising to find them disagreeing on the policies to include in said bill.

For all the emphasis on the “repeal and replace” slogan since the day Obamacare passed Congress in March 2010, the current debate might be characterized as “repeal vs. replace.” Repealers focus more on eradicating the law, while replacers wish to make sure that an alternative does not leave many of Obamacare’s newly covered uninsured.

Repealers
The repeal faction generally comes from the conservative wing of the party. It wants every word of Obamacare repealed — lock, stock, and barrel — and, in some cases at least, is willing to consider blowing up the Senate filibuster (aka the “nuclear option”) to do it. Repealers generally do not want to maintain many, or any, federal regulations on health insurance, deferring to the states (as was largely the case prior to Obamacare).

When it comes to alternative policies, some repealers don’t care about “replacing” Obamacare at all and would content themselves with a return to the status quo ante. Other repealers would focus more on enacting reforms to lower health-care costs rather than expanding coverage or providing subsidies to previous Obamacare recipients. Some repealers would go beyond repeal to examine prior federal encroachments on health policy that preceded President Obama’s tenure.

Of particular import: Repealers believe that repeal means the elimination of all of Obamacare’s taxes and spending — and that these should go away, not to return. That directly contrasts with the approach of replacers, who focus on another policy objective.

Replacers
Whereas repealers want to eradicate the health law’s spending and taxes — to use the Washington lingo, they would return to the pre-Obamacare fiscal baseline — replacers focus on maintaining, or at least not eliminating, Obamacare’s coverage baseline. They would like an alternative to Obamacare to at least be competitive with current law when it comes to the number of individuals with health insurance — although for different reasons. Some replacers believe in the goal of universal health coverage, while others simply believe that an alternative, to be politically viable must offer something to those currently covered by Obamacare.

Coming from more moderate or establishment wings of the Republican party, replacers focus on preserving coverage gains as an objective of any alternative legislation, whereas repealers focus solely on lowering health-care costs. To preserve Obamacare’s expansion of coverage (albeit perhaps with reduced benefits), replacers would either preserve some of Obamacare’s tax increases, or repeal them all but institute new measures to raise revenue in their place.

Replacers also would maintain a greater level of federal oversight of health insurance than repealers. They would attempt to preserve policies such as Obamacare’s under-26 insurance mandate, ban on annual and lifetime limits, and the ban on preexisting conditions; repealers would either devolve these policies to the states or scrap them entirely.

As for the president, he has — as on many issues — given mixed messages. His public statements — “insurance for everybody,” “simultaneous repeal-and-replace” — tend to put him in the replacer camp. But candidate Trump’s platform on health care, with a minimalist approach focused largely on reducing health-care costs, emphasized the repealer elements of his agenda during the contentious Republican primaries last spring.

Rorschach Test
It is perhaps oversimplifying matters to view these two schools of thought as diametrically opposed. Members of Congress could agree with elements of both factions, depending on the specific issue.

But it does not oversimplify to say that the question of emphasis — who cares more about repeal, and who cares more about replace? — has driven much of the debate since the November 8 election results gave Republicans an opportunity to impose their will on health care. It explains why some replacers have argued in favor of keeping some or all of Obamacare’s tax increases, and it explains why conservative repealers have expressed opposition to replacing Obamacare’s subsidies with another system of refundable tax credits.

The New York Times recently profiled Josh Holmes, the former aide to Senator Mitch McConnell who coined the “repeal-and-replace” phrase when working for the Republican leader seven years ago. But while the phrase proved catchy among elected leaders, it did not solve the debate about which policies to include in an alternative plan. Instead, by creating a new Rorschach test, in which candidates could emphasize either the “repeal” or the “replace” elements depending on their political views and the audience of the moment, it effectively postponed the day of decision within the party.

With views on Obamacare alternatives not fully litigated during the 2016 campaign cycle (or, for that matter, the cycles preceding it), that day of reckoning has finally arrived. Whether and how Republicans resolve the conflict between the repealers and the replacers will help determine whether the catchy phrase “repeal-and-replace” gets dubbed with a catchphrase of its own: Too cute by half.

This post was originally published at National Review.