Since the system came on line, Republicans are facing a whole new reality. "Repeal and replace" is no longer viable. Consider. Suppose the Republicans win the triple crown in 2016. Suppose their first action is to finally repeal the monstrosity that is Obamacare in its entirety. That will mean stripping as many as 20 million people of their health insurance. Suppose they then tell the people who have lost their insurance, "Don't worry, we will have a replacement for you soon. It should come online in another two to three years." My guess is that the next election would not go well for them! Since Obamacare has come on line, "repeal and replace" has to be exchanged for "replace and repeal." Getting a new system up an running takes time -- typically about two to three years. (Obamacare passed in 2010 and did not actually insure anyone until well into 2013). Unless Republicans are willing to strip some 20 million people of their health insurance and face the electoral consequences, they will have to tolerate it until their substitute is up and running.
And at that point, they run into trouble yet again. First of all, Republicans don't want to come up with an alternative to Obamacare. They want to minimize the role of government in healthcare. How many people lose their insurance or are otherwise harmed makes no moral or ideological difference. In fact, I am sure that many people in libertarian think tanks would be quite happy simply to destroy Obamacare (and, if they could, Medicaid and Medicare as well) and replace it with nothing. To all the people who lose their health insurance as a result, they would offer the comfort that in the long run the unregulated free market would come up with something better. Of course, in the long run we're all dead, and for some people losing their health insurance is apt to make the long run come a lot faster that it otherwise would. Which means that the people who lose their health insurance make a political difference that Republicans are just going to have to cope with. And if the Supreme Court rules their way, Republicans will have to come up with a solution, and fast. So what are the options?
This article suggests five:
- Fix the glitch and continue the status quo;
- Fix the glitch in exchange for some other concession;
- Allow the system to crash;
- Repeal and replace;
- Build an off-ramp (which sounds a lot like replace and repeal).
One is out of the question because Republicans are unwilling to simply save Obamacare without getting anything in return. Three is extremely dubious. The pressure to do something is going to be overwhelming. Four, well, as I have said, repeal and replace is not going to cut it. It will have to be replace and repeal. So that leaves either two or five.
I have no objections to the second option, i.e., a quid pro quo, so long as the deal does not threaten the survival of the whole system. The Republicans do control both houses of Congress, after all. The people voted Republicans a landslide just a few months ago. These facts have to be taken into account. A certain amount of horse trading is appropriate here. I would favor exchanging fixing the glitch for repeal of the employer mandate and the medical devices tax.
As for the exit ramp a/k/a replace and repeal, the devil (as always) is in the details. The article quotes Republican wonk Ramesh Ponnuru as proposing to allow states to opt-out of most of the requirements of Obamacare, including the employer and individual mandates, the requirements that insurance companies provide a wide range of benefits, and the ban on rejecting customers for pre-existing conditions. That last is going to be a surefire political loser. As for the rest, I will discuss them in substance later.
A related proposal is to extend the subsidies for another 18 months to give Republicans time to come up with an alternative. Obviously the substance of such a proposal would depend on what (if anything) Republicans come up with. But the politics of it are disastrous, as I will discuss shortly.
What I oppose (and most fear) is Republicans refusing to take anything less in exchange than repeal of the individual mandate. This will mean exchanging rescuing Obamacare in the short run for sacrificing it in the long run. It will also be popular, since the individual mandate has always been the least popular part of the statute. It may be popular enough to peal off large numbers of Democrats. And (I suspect) it will reverse the perceptions of hostage taking. If Republicans refuse to restore the subsidies unless the whole law is scrapped, states are allowed to let insurance companies exclude patients with pre-existing conditions, or something else unpopular, they will once again look like they are taking hostages. But if Obama announces that he will veto any extension unless it leaves the individual mandate in place, it will look as if he is taking hostages. This is based on the assumption that the people do not automatically support the President in a showdown with Congress and see Congress as the ones taking hostages, but automatically see as hostage takers the side that is insisting on something substantively unpopular. Refusing to extend subsidies is substantively unpopular, and tying it to an unpopular or even neutral deal will look like hostage taking. But the individual mandate is also unpopular, and tying it to allowing the extension to go through will also look like hostage taking.
Republicans are not the only ones with good reason to pray for the Supreme Court to uphold the subsidies.