Monday, May 11, 2015

A modest post-King proposal

Political science blogger Jonathan Bernstein is one King v. Burwell watcher who does not discount the likelihood that Republicans in Congress will come under intense pressure to keep the subsidies flowing through healthcare.gov if the Supreme Court rules for the plaintiffs, Knowing this, I was nonetheless a bit surprised to read this morning that he thinks a more or less unconditional Republican surrender is a real possibility.

Imagine, Bernstein writes, that Republicans write a bill restoring the subsidies along with a poison pill like repeal of the individual mandate, and Obama vetoes it. What then? With most GOP senators and House reps wishing the "opportunity" to throw 8 or 9 million people off their insurance plans to go away, the party could swing either way:
We've seen similar cases in the last Congress: Republicans eventually decided to allow Superstorm Sandy relief and the Violence Against Women Act to pass, while they never permitted votes on a comprehensive immigration plan or on a bill prohibiting employer discrimination based on sexual orientation or identity. In each case, most Republicans wanted to oppose the measure in the event of a vote, though there were enough votes to pass it anyway. The question was whether enough Republicans wanted the legislation to pass while publicly voting "no." And they probably didn't know what they would do until the situation played out.
And here's his call;
My guess is that if this does happen (the court may, and should, rule the administration has read the health-care law properly), Republicans would be under heavy pressure to allow a simple fix to pass, and would probably give in. But it's hardly certain.
I think there's a third possibility: with both sides under heavy pressure and public opinion as to who's to blame hanging in the balance, Republicans might settle for amending the ACA in a conservative direction without destroying it. (See Michael Leavitt, Bush Jr.'s HHS Secretary, on this.) But how much amendment would be enough to satisfy the wrath of the party's base?

Here's one possibility: detoxify Bernstein's poison pill a bit. Give each state the option of repealing the individual mandate.
Like most viable amendment proposals, this is really a version of enabling ACA innovation waivers without the waiver. Those waivers enable states to propose, subject to approval by HHS and effective in 2017, alternative schemes to meet the ACA's coverage and affordability goals. A post-King agreement could ease approval requirements and speed up the timeline. But how could a state repeal and replace the individual mandate? It's one half of a fundamental bargain with insurers: compensate them for agreeing not to vary the price of insurance according to a person's medical history by pulling healthy people into the "risk pool." So-called "guaranteed issue" -- offering the same price to every customer of the same age -- is rendered viable by the mandate.

In fact there are alternative methods of pulling the uninsured into a large enough risk pool to make guaranteed issue viable. A variant of one was in the "repeal and replace" legislative outlined floated in early 2014 by Senators Coburn, Burr and Hatch. It's a triple stool: 1) provide protection against "medical underwriting" to anyone who maintains continuous coverage. 2) When people lose insurance, if their income is low (e.g., has abruptly fallen after a job loss), default-enroll them into a subsidized catastrophic policy rendered free or affordable by the premium subsidy. 3) Have open enrollment seasons (with no medical underwriting) at long intervals ((the Coburn-Burr-Hatch plan provided for only one kickoff open enrollment, but previous similar proposals put them at intervals of several years).

The trouble with this let-the-states-decide proposal is that it presumes that Republicans would be interested in making the ACA work better by their lights, as opposed to just vilifying it and vowing to repeal it and replace it with forever-elusive alternatives. Making the mandate optional would force red state governors and legislators to put up or shut up -- accept the mandate as an essential tool in making insurance affordable to all, or find something that works better.And settling for changing the ACA while saving it might well be politically toxic to Republicans who have promised their constituents to fight it to the death.

On the other hand, if the public decides that the onus for destroying most states' insurance markets and throwing millions off their insurance is on the Republicans, being able to claim that they won a major concession with respect to the law's most vilified provision would constitute a victory of sorts. It just may not be a win they'd be willing to take

n.b. excuse typos and some shorthand: I'm writing this on a bus.



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