Republicans have no choice but to keep the rug under Obamacare’s newly insured
Democrat rhetoric over the past few days would have us believe that the “Republican plan to replace Obamacare” is “nonexistent,” as a New York Times op-ed by Nicholas Kristof declares.
The Republicans have no shortage of plans, but their real dilemma is that Obamacare added some 20 million previously uninsured Americans to the insurance rolls, and the Republicans have no choice but to allocate the funds to maintain coverage for those newly insured.
The Chicago Tribune emphasizes the importance of continuing coverage for the newly insured:
If millions of Americans lose coverage, whether by GOP inaction or action, guess who takes the blame?
And Vice President-Elect Mike Pence has acknowledged that “the Trump administration doesn't want – or plan to have – any coverage disruptions for the 20 million Americans insured.”
If the price of eliminating the Obamacare regulatory structure is paying for the newly insured, the Republicans should take the deal.
But covering the cost of maintaining that coverage does not mean following the Democrat definition of “replacement.”
As David Harsanyi, writing at The Federalist, says:
Now, if by “plan,” Kristof is using the contemporary Left’s definition, meaning a[n] expensive, constricting federal regulatory scheme that forces Americans to participate through a series of mandates, then one hopes Republicans never have a “plan.”
What really needs to be replaced?
Mandates and penalties, exchanges and taxes, boards and directives, and all the other strictures contained in the law and its regulatory offspring?
No. As Mr. Harsanyi observes:
The comprehensiveness and rigidity of Obamacare are things to avoid. So replacement plans can be passed piecemeal.
The real replacement issue for Republicans is to “not pull the rug out from under people currently benefiting from the plan,” as the Washington Post says, which translates to covering the cost of insuring the 20-odd million people added to insurance rolls by the Affordable Care Act.
That cost would include the exchange subsidies and the Medicaid expansion, along with pre-existing conditions.
The Kaiser Family Foundation (KFF) estimates “that 9.4 million Americans” will receive a total of $32.8 billion in exchange subsidies for 2016.
KFF also estimates that Obamacare added 11 million “newly eligible” adults to the Medicaid rolls, with an 18-month cost of $84 billion, or an annual cost of $60 billion in very round numbers for the 31 states that have opted for the Medicaid expansion.
Finally, Republicans look to high-risk pools to deal with pre-existing conditions, which Betsy McCaughey estimates would cost $16 billion annually.
Adding up all of that, the cost to address the concerns of not pulling the rug out from the newly insured would appear to be somewhere north of $120 billion annually.
That cost currently is funded by the Obamacare tax increases. Grover Norquist estimates that repeal of Obamacare’s “nearly 20 taxes” would “save taxpayers more than one trillion dollars over the next decade.” This is in the ballpark of the cost for the formerly uninsured.
Hence the dilemma for Republicans, as Robert Reich, writing at Real Clear Politics, sums up:
Revoking the tax increases in Obamacare – a key part of the repeal – would make it impossible to finance these subsidies.
Regardless of the smoke-and-mirrors budgeting used to pass Obamacare, Republicans have no choice but to designate the funds required to cover the newly insured. How they do that is the unanswered question. But doing so might even help them pick up the votes of red-state Democrat senators up for re-election in 2018, thereby creating bipartisan support for the new Republican plan.
As Mr. Harsanyi at The Federalist observes, paying for the newly insured would be a tradeoff for dropping the Obamacare regulatory structure:
I’m not sure how they plan to pay for it without a mandate, … but if the tradeoff is deregulation of Obamacare’s most intrusive components, it would be worthwhile in the long run.
The Republicans need to repeal the law and provide funding to keep the rug under the newly insured, potentially attracting bipartisan support for deregulation of Obamacare.