A “Grand Bargain” on Obamacare Repeal?

To know where you’re going, it helps to recognize where you’ve been. Examining the causes of Republicans’ legislative setbacks on health care—including last month’s dramatic failure of a “skinny” repeal bill on the Senate floor—provides the glimmer of a path forward for a legislative “repeal-and-replace” package, if they are bold enough to take it.

In both the House and the Senate, debate focused on a push-pull between two competing issues: The status of Medicaid expansion in the 31 states that accepted it, and what to do about Obamacare’s regulatory regime. During the spring and summer, congressional leaders attempted messy compromises on each issue, phasing out the higher federal match for Medicaid expansion populations over time, while crafting complex processes allowing states, insurers, or both to waive some—but not all—of Obamacare’s regulatory requirements.

A “grand bargain” in this vein would give Senate moderates a clear win on Medicaid expansion, while providing conservatives their desired outcome on Obamacare’s regulations. For this conservative at least, the regulations represent the heart of the law, prompting both its spending on exchange subsidies—to offset the higher premium costs from the regulatory mandates—and the taxes needed to fund that spending. Expelling the regulations from the federal statute books would represent a clear step towards the promise of repealing Obamacare “root and branch,” and return control of health insurance to the states, where it lay from 1947’s McCarran-Ferguson Act until Obamacare.

Federal Regulations Are Driving Up Health Costs

When coupled with structural reforms to Medicaid—a block grant or per capita caps—included in the House and Senate bills, repealing the federal regulations would enable the “laboratories of democracy” to reassert control over their health insurance markets and Medicaid programs. It would also contrast favorably with a recent proposal introduced by senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA). While Graham claims his plan would “empower each individual state to choose the path that works best for them,” in reality it would retain federal dictates regarding pre-existing conditions—the most costly of all the Obamacare mandates.

In a sad irony, some of the same senators who want Congress to respect their states’ decisions to expand Medicaid also want to dictate to other states—as the Graham-Cassidy plan does—how their insurance markets should function. But the true test of federalism applies not in the principle’s convenience, but in its inconvenience.

Yes, This Idea Is Imperfect

To be sure, even this attempted “grand bargain” includes noteworthy flaws. Retaining the enhanced Medicaid match encourages states to prioritize expansion populations over individuals with disabilities in traditional Medicaid, and may lure even more states to accept the expansion. Keeping the higher Medicaid spending levels would preclude repealing all of Obamacare’s tax increases. And the Senate parliamentarian may advise that repealing Obamacare’s regulations does not comport with the budget reconciliation process. But despite the obvious obstacles, lawmakers should seriously explore this option. After Republicans promised repeal for four straight election cycles, the American people deserve no less.

Throughout the repeal process, conservatives have bent over backwards to accommodate moderates’ shifting legislative goalposts. When moderates objected to passing the repeal legislation all but one of them voted for two years ago, conservatives helped construct a “repeal-and-replace” bill. When moderates wanted to retain the Medicaid expansion in their states—even though the 2015 repeal bill moderates voted for eliminated it entirely—conservatives agreed, albeit at the traditional match rates. And when Senate moderates complained, conservatives agreed to a longer phase-out of the higher match rate, despite justifiable fears that the phase-out would never occur.

Winston Churchill purportedly claimed that Americans will always do the right thing—once they have exhausted every other possibility. This “grand bargain” may not represent the “right” outcome, or the best outcome. But conservatives have exhausted many other possibilities in attempting to come to an agreement. Perhaps moderates will finally come to accept federalism—giving states a true choice over their insurance markets, rather than trying to dictate terms—as the solution to keeping their promise to the American people and repealing Obamacare.

This post was originally published at The Federalist.

The Binary Choice Behind a “Skinny” Health Care Bill

Are you for The Swamp—or are you against it?

It’s really that simple. Text of the supposed “skinny” bill—or the “lowest-common denominator” approach, if one prefers—has not yet been released. But based on press reports, it appears the legislation will repeal the individual and employer mandate penalties, along with the medical device tax, and little else, so the House and Senate can set up a conference committee to re-write the bill—if the House does not decide to pass this “skinny” bill outright.

  • It will embolden Senate leadership to keep bullying rank-and-file members on future pieces of legislation, pulling bait-and-switch moves at the last minute and daring members to vote no;
  • It will move the health-care debate from an open Senate floor process into a conference committee, where after one token public meeting most legislative work will occur behind closed doors;
  • It will concede that the “world’s greatest deliberative body” cannot deliberate as an institution, and instead empower unelected leadership staff in a secretive process to cobble together a new bill that can pass both chambers;
  • It will continue a process that Republican staffers themselves have described as “making it rain” on moderate senators through various backroom deals and spending sprees—bringing parlance heretofore used in strip clubs to the U.S. Congress;
  • It will raise premiums an estimated 20 percent, by eliminating the individual mandate penalty, but leaving all of Obamacare’s regulations intact;
  • It will all-but-guarantee a future Obamacare bailout, destabilizing insurance markets such that carriers will come running to Congress demanding corporate welfare payments to keep offering exchange coverage; and
  • It will prioritize K Street lobbyists who have fought for years to repeal the medical device tax, virtually guaranteeing that provision will remain in the final legislation, while raising premiums on hard-working American families.

If senators support the above scenarios, then they should vote for the bill. If not, perhaps they should consider another course.

Blast from the Past

Conservatives have seen these games played before—and rejected them. In 2015, House Republican leaders initially offered a bill eerily similar to the rumored “skinny” legislation. That bill repealed the individual and employer mandates, the medical device tax, the “Cadillac tax,” the Obamacare prevention “slush fund,” and a few other ancillary provisions. Conservative groups could have supported it—just to keep the process moving, and continue the momentum for a broader repeal—as leadership is asking them to do right now. They did not because:

The bill would not restore Americans’ health care freedom because it leaves the main pillars of Obamacare in place, nor would it actually defund abortion giant Planned Parenthood. This bill violates an explicit promise made in the budget, which ‘affirm[ed] the use of reconciliation for the sole purpose of repealing the President’s job-killing health care law.’

That statement comes from Heritage Action, which key-voted against passage of the “skinny” repeal bill in 2015. Likewise, in the fall of 2015 conservative senators Mike Lee (R-UT), Marco Rubio (R-FL), and Ted Cruz (R-TX) said publicly they could not support what they viewed as an insufficient attempt at repeal:

On Friday the House of Representatives is set to vote on a reconciliation bill that repeals only parts of Obamacare. This simply isn’t good enough. Each of us campaigned on a promise to fully repeal Obamacare and a reconciliation bill is the best way to send such legislation to President Obama’s desk. If this bill cannot be amended so that it fully repeals Obamacare pursuant to Senate rules, we cannot support this bill. With millions of Americans now getting health premium increase notices in the mail, we owe our constituents nothing less.

The bill does not even touch Obamacare’s main two entitlement expansions: The Medicaid expansion and the Exchange subsidies. The bill leaves all of Obamacare’s new insurance rules and regulations in place. It also leaves many of Obamacare’s taxes in place….

The Obamacare repeal movement has been successful in the last 5 years in keeping full repeal intact. It has recognized that it will be much easier to repeal Obamacare as a whole if all of the mandates and entitlement expansions are repealed at once, since we know that the law is vastly unpopular when taken as a whole. The threat is that ‘repeal’ is defined-down to simply mean repealing a couple high-profile provisions, while allowing the main pillars of the law to continue untouched. This package threatens that very outcome: defining down ‘full repeal’ and jeopardizing the entire repeal effort. [Emphasis mine.]

Need for Consistency

In the past several days, conservatives have attacked Senate moderates—rightly—for flip-flopping on a full repeal of Obamacare, voting for it in 2015 but opposing it now. Those who face a similar situation from the Right—that is, those who opposed a “skinny” bill two years ago—should not fall into the same trap as those from the center. On both policy and process, conservatives should reject the minimalist approach floated by leadership, and continue working to repeal Obamacare.

This post was originally published in The Federalist.