Thursday, November 21, 2013

Red states' ACA exchanges: lab or slab?

Austin Frakt has launched a multi-post-and-tweet campaign arguing that the Affordable Care Act is an essentially conservative chassis amenable to conservative reform, and that conservative healthcare wonks should be aiming to mend it, not end it. (Subtext: they'd be doing just that  if they were not playing for Team GOP.)

The penultimate post in the series dangles conservative wonk-bait via a list of potential reforms in ascending order of disruptiveness to the current ACA structure, e.g., paring back essential benefits and allowing more catastrophic plans on the exchanges (not so disruptive) and creating high risk pools or universal zero- or low-premium catastrophic insurance (very disruptive).  But how to move GOP lawmakers and their think tank supporters off their "repeal and replace" schtick and onto a "revise and reform" track?

Frakt's most recent post suggests an answer by misdirection:
My conclusion is that the ACA is far more amenable to more conservative reforms than to more liberal ones. Of course, this could change. A public option could be added, for example. But, having had that political fight recently, I doubt it will. The most likely pathway leftward (in the sense of toward single payer) would be if the ACA failed in a sense that could be interpreted as market failure.

In fact, I do expect the ACA to fail in some states, but not in the ones that are most likely to adopt a state-level single payer program. Exchanges may fail where support for and enrollment into them is discouraged by political leaders and other institutions. Ironically, this is more likely to happen in states whose leaders are more ideologically supportive of market-based approaches.
If some state exchanges fail, and Republicans do not at that time control presidency, Senate and House, then what? Looking back at GOP state governments' refusal to run their own ACA exchanges, Jonathan Bernstein offers a might-have-been that's also, it seems to me, a may-be-yet:
Imagine if, right now, there were only a handful of states in the federal exchange, and some of the more aggressive and innovative conservative governors were running their own exchanges...suppose that several Republican governors had pushed for a deal in which they would implement Obamacare, including setting up exchanges in their states, if and only if they were given waivers and allowed to try some conservative policy ideas. The pressure would have been intense on the administration to allow at least some of them. After all, the administration never wanted to build all those different state exchanges in the first place. And certainly the president didn’t want obstruction verging on sabotage from Republicans across the board, as is de rigueur now. In order to get some Republican buy-in, there’s a very good chance Obama would have been extremely willing to cut deals, even if liberals would have been appalled at the results for the affected states.
Recall also that back in 2011 Obama supported legislation that would have moved the starting line for state waivers enabling alternative means of reaching near-universal coverage from 2017 to 2014 -- and further, that the administration has proven receptive to rather radical, privatized variations of the Medicaid expansion.

In short, O'Barkis is willing.  Too bad Republican governors and legislatures are more interested in sabotage than in genuine conservative policy innovation.  If and when, however, they're stuck with the corpse of a state exchange (or one on life support), and the ACA is still the law of the land, Republican governors may cook up some fetching Frankenstein monsters of their own. 

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