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January/ February 2012 Obamacare

It's toast.

By Harold Pollack

Like everyone else who supported passage of the Affordable Care Act (ACA), I’ve been worried about what will happen to Obama’s signature legislative accomplishment if he loses in 2012. Specifically, I’m wondering if a new president would really overturn the law, as all Republican candidates have vowed to do.

It’s easy to see Newt Gingrich following through on that promise, given his record of radicalism. (Remember the 1995 government shutdown?) But what about Mitt Romney, the GOP candidate with the best chance of actually beating Obama? Might he turn out to be a problemsolving moderate sheep in a conservative wolf’s clothing? Sure, he is now spouting the conservative rhetoric of Republican primary voters. But in his last political job, Romney shepherded through the precise precursor to the ACA. Tim Pawlenty’s sobriquet “Obamneycare” strikes me as an entirely fair description of both measures.

I suspect that if it were up to Mitt Romney alone, we would see surprisingly incremental changes to the act. For most of last year, the main way he promised to overturn the ACA was to sign an executive order on his “first day in office” that would give states waivers from the law’s mandates. The ACA already allows states to seek waivers in 2017 provided that they provide coverage as strong as what the federal law affords. Romney’s policy would be merely to grant those waivers immediately, and most experts think he won’t have the power to do even that. It’s hard not to wonder whether this is a pledge Romney trots out to make GOP primary voters think he’ll wipe out “Obamacare” if elected but that is actually calibrated to allow him to evade the task.

In any event, such speculation presumes that a potential President Romney’s policy preferences are the critical variable. They aren’t, because he won’t be the Republican decider regarding health care reform. As I write, the online prediction market Intrade lists President Obama as having a 51 percent probability of reelection, and gives Romney a 35 percent chance of being the person to unseat him (Gingrich’s chances are listed at almost 4 percent). Meanwhile, Intrade gives Republicans a 75 percent probability of taking over the Senate, and a 74 percent likelihood of retaining control of the House.

With majorities in both houses, Republicans would surely try to pass a full repeal of the ACA. If Obama is reelected, he will veto it. Yet if Obama loses, what leverage or incentive would President Romney really have, come January 2013, to wage an internecine party fight to preserve elements of his predecessor’s signature domestic policy legacy? None that I can think of.

Health care reform advocates are sometimes comforted by thoughts of the filibuster. Even if Republicans do win both elected branches of government, the Democrats will still probably retain well over forty seats in the Senate. Presuming they can stick together, that ought to be enough to block a Republican bill to fully repeal the ACA.

One is far less comforted, however, after considering some realities of the budget reconciliation process, the Senate procedure that allows budget-related bills to be voted on and passed with only fifty-one votes.

Paul Starr, in his masterful history of health reform, Remedy and Reaction, notes an infuriating fact: Washington’s de facto ground rules require sixty Senate votes for Democratic health policy measures, but only fifty for Republican ones. For historical and personal-political reasons, moderate and conservative Senate Democrats refused to allow their party to use budget reconciliation to pass health reform; they demanded the bill get sixty votes. As Thomas Mann and Norman Ornstein describe in their essay above, Republicans operate under no such constraints.

Moreover, conservatives are already building the political foundation for slaying the ACA in reconciliation through a massive “repeal and replace” bill passed on party lines with no possibility for a filibuster. Former George W. Bush Office of Management and Budget official James Capretta notes that Democrats themselves used reconciliation during health reform’s legislative endgame after Scott Brown’s election to iron out differences between the House and Senate versions of the final bill. GOP lawmakers can therefore present a politically plausible argument for using reconciliation themselves to repeal the law. Capretta told me he isn’t worried about voter backlash: “If the president has won based on repeal and replace, people will be expecting it.”

If anything, the experience of the last three years has pushed Republicans in the direction of greater boldness. When I suggested that many liberals regret not using reconciliation to pass health reform from the start, Capretta responded, “I think that’s probably true.” In October, under pressure from conservatives, Mitt Romney himself said that he favors repealing the ACA via reconciliation, leaving little doubt that Republicans in the House and the Senate would themselves attempt this route.

Unfortunately, even though reconciliation can only be used for budgetary measures, many key pillars of the law that expand access (subsidies within the new health insurance exchanges, Medicaid expansion) or that reform the health care delivery system (the newly created Patient- Centered Outcomes Research Institute) are budget related and can thus be cut or eliminated through the reconciliation process. Republicans bet that few voters would object, since few of these provisions will have gone into effect or had any discernible impact by the end of 2012. Meanwhile, Republicans will probably retain some aspects of the law the public clearly likes, such as the narrowing of the Medicare prescription drug “donut hole” and the provision that allows adults under age twenty-six to stay on their parents’ insurance plan. Republicans can try to quietly pocket other money-saving ACA provisions, such as Medicare cost controls, whose savings Republicans want to use to finance other legislative objectives.

Some key parts of the ACA are not related to the budget, and may be hard to expunge through reconciliation. Most prominent among these are the “community rating” measures that bar insurers from denying coverage to sick or injured people, and from charging people with costly conditions more for insurance coverage. The insurance industry originally hated this provision but ultimately accepted it, realizing that measures such as the individual mandate would lessen the need to cherry-pick healthy consumers. If the GOP wipes out the mandate through reconciliation but can’t get rid of these community rating rules, insurance companies may be deluged with sick (and unprofitable) new customers. With no way to offset that cost, the whole industry would be in serious trouble.

Harold Pollack is the Helen Ross Professor at the School of Social Service Administration at the University of Chicago.

Comments

  • jim on January 05, 2012 11:37 AM:

    Health care reform is a good and necessary thing.
    The ACA is a bad thing, for reasons too many to list here. Don't willfully confuse the two.

  • Rick Ungar on January 05, 2012 12:09 PM:

    Harold - an excellent analysis.
    Democrats are far too comfortable in their belief that the ACA is, ultimately, bulletproof from repeal. It most certainly is not as you have beautifully made clear.

  • Paurnvab on January 17, 2012 3:37 PM:

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  • David Martin on January 19, 2012 12:01 AM:

    Here in Florida, an impressive portion of the population is already uninsured, and there's no political consequences at all.

  • square1 on January 25, 2012 9:26 AM:

    Don't believe it for a second.

    ACA was always an industry-sellout: faux-reform that actually protected the insurance industry and Big Pharma.

    I don't believe that the GOP would dare to repeal it, wholesale. The GOP then have to take ownership for the problem of rising health insurance premiums...which the GOP can now lay at the feet of Obama, even if ACA didn't cause the problem.

    Also, the insurance industry knows full well that they aren't likely to get a better deal than ACA: Under the present system, all the young, healthy (read: profitable) Americans who now forego insurance will soon be compelled to buy in. Repeal ACA and those profits go bye-bye.

    Even worse, the American people will not idly sit back after a repeal. They will say, "Fine. If ACA isn't the solution then what is?"

    There will be renewed calls for a public option, possibly Medicare buy-in, and maybe even a single-payer system. That is a nightmare for the insurance and pharma industries. The whole point of passing ACA was to take genuine reform off the table for a couple more decades.

  • Captain Dan on February 09, 2012 8:16 AM:

    If Obama Care is trashed by the supreme court, the Progressive that will be swept into office will institute a better system, based on the Canadian health system!

  • Econ Guy on March 09, 2012 2:28 PM:

    I love this stuff! You Liberals do not get it......If the Supremes rule it Unconstitutional we win immediately! If the Supremes rule it Constitutional we win again, because the majority of Likely voters want it repealed. As a result, they will be more motivated than ever to remove Obama and the Dems in the Senate. And shortly thereafter they will eviscerate it in early 2013......And for fun, we will have 4 years to replace at least two of the Libs on the Court......This is fun!

  • Nash Equilibrium on March 12, 2012 9:29 AM:

    The way the ACA was passed with threats, coercion, and sleight of hand radicalism was despicable. The only way to restore any confidence in governement is for government to un-do this over-reaching legislative abortion.

  • Nash Equilibrium on March 12, 2012 9:30 AM:

    The way the ACA was passed with threats, coercion, and sleight of hand radicalism was despicable. The only way to restore any confidence in governement is for government to un-do this over-reaching legislative abortion.

  • Costa Rica's Call Center on May 04, 2013 7:10 PM:

    OBAMACARE promotes outsourcing in Central America. Enacted in July 2010, The U.S. healthcare reform (�ObamaCare� or the �Patient Protection and Affordable Care Act�) is intended to pressure large and small employers through force and taxation. The end result will show North American companies deciding to send customer support, sales, lead generation and appointment setting jobs offshore or risk going out of business. Many will decide to hire a dedicated bilingual employee who is 100% committed to their project. ESL call center employees in Costa Rica are just as or more effective than transitional in-house staff. In addition, giving the owners the freedom to scale up their offshore staff without getting caught in the Obamacare challenge in 2014.