Healthcare Reform Is Not Dead

The spectacular failure of the GOP health care bill in July, along with the continued antics of the Trump White House, have limited good news for the GOP of late.  Arguably the only good news for the GOP of late has been the appointment of John Kelly to the White House.

As bad as the White House’s performance has been of late the Senate has been just as bad, if not worse.  The GOP is riven by ideological divisions and short of appointing Neil Gorusch to the Supreme Court the Senate GOP has few successes to point to.

Following the failure of the Senate GOP’s bill in every form (even the skinny repeal), few good options are left for the GOP to explore to repeal or reform the ACA.  As a result, GOP Committee leaders have signaled they are likely willing to work with Senate Democrats to provide subsidies to insurance companies to prop up the exchanges after they return from their August recess on September 5th.  Other Republicans are turning to tax reform for their signature legislative victory (though the politics there are fraught as well).

But, there is another option.  What if, Republicans shored up the exchanges for another year by subsidizing insurance companies (as queasy as that makes me feel), but also worked to restore power to the states by allowing the states to decide whether to accept the ACA or not?  States that expanded Medicaid could keep it and continue to receive federal funding from the ACA while states that have not expanded Medicaid and do not like the Community Rating system can opt out.

This is idea of Senators Bill Cassidy (LA) and Lindsey Graham (SC), which was introduced in July.  Despite the practical stance the idea has only gained traction of late as the GOP realizes they will not be able to fully repeal the ACA and cannot absorb the fallout from fully repealing the law.

Here is how it would work according to one of the bill’s authors, South Carolina Senator Lindsey Graham, “If you like Obamacare, you can re-impose the mandates at the state level. You can repair Obamacare if you think it needs to be repaired. You can replace it if you think it needs to be replaced. It’ll be up to the governors. They’ve got a better handle on it than any bureaucrat in Washington.”

Admittedly, the plan is not a full repeal.  Senator Bill Cassidy, a doctor and the bill’s other sponsor, illustrated this by pointing out, “The essential health benefits will still be there. We can’t repeal those as part of the process and so you’d still have the protection.”  In short, the plan could not be attacked politically as taking away protections for those with preexisting conditions or who are covered under Medicaid.

Better yet, at least from an electoral standpoint, by preserving the taxes in the law on the wealthy the law cannot be ridiculed as a tax cut for the wealthy.  Democrats and opponents would have a hard time attacking the law in general and would probably resort to the fallback argument millions of Americans would lose insurance.  But, under this law, Republicans could at least counter it is probably due to people forced to buy insurance under the mandate voluntarily opting out from coverage.  As long as the government continues to support insurance companies, which they could due to the taxes on the wealthy, the market would not go into a death spiral.

Not every tax would survive under the current plan.  The ACA tax on medical device makers would be repealed and both the Individual Mandate and Employer Mandate would be repealed.  States would be crucial to get the plan traction as Governors could lobby their Senators to accept the plan.  Additionally, more federal dollars might flow to states that possess inflators – which would allow states that find formulas for quality, affordable health care to keep the federal dollars they save by doing so. The amount of money each state gets will be based by region.

The biggest problem the plan may face is not lack of support but a condensed Congressional calendar.  Consider when Congress returns in September they will have to deal with the debt ceiling, have to mark-up multiple elements of the 2018 budget and simultaneously focus not just on ACA repeal but also move forward tax reform all while also stabilizing the insurance marketplaces.  Simple, right?

Hopefully, Graham and Cassidy’s idea did not arrive too late.  It’s likely no Democrat will sign onto the plan but at the least 50 Republicans in the Senate could support the plan.  What happens after that, in Conference Committee with the House, and beyond, nobody knows.

But, for Cassidy and Graham, the idea is a political winner.  Here is hoping the Congressional GOP agrees and moves the plan forward.

 

 

 

 

 

 

 

 

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