Saturday, December 24, 2016

The ACA's fate may be determined this week

While Republicans have made amply clear their intention to swiftly pass an ACA repeal-and-delay bill in early 2017, it seems to me that a few facts about this looming prospect have not fully sunk in.

The first is that success is not a foregone conclusion. If three Republican senators balk at ripping up the ACA without a replacement in hand -- or at least, without a clear blueprint of how to get to replacement without throwing the individual market for health insurance into turmoil -- then the process slows, and the damage may be mitigated or avoided entirely.

Second, Republicans will never pass "repeal" and "replace" together -- unless perhaps they win 60 senate seats in 2018. Repeal-and-delay is their only option for delivering on their promises.

Third,  the time to stop the train is now -- in the coming week, between Christmas and New Year's, when senators and members of Congress will be home. The ACA had its long hot summer of rabid town halls, demonstration and counter-demonstration. ACA repeal gets a cold short week. And a lot of action is in planning.

These rather basic points were confirmed to me by Christopher Condeluci, a healthcare consultant who was tax and benefits counsel to Republicans on the Senate Finance Committee in 2009, when the ACA was being drafted.

As he mapped out the options and decision dynamics facing Republicans in Congress, Condeluci emphasized that he was basing his analysis on his own experience, not directly channeling the current players' thinking. He laid out a specific menu of options for what might be repealed immediately, what might be delayed, and what new features might be written into the repeal bill.

Those options are relayed in Part 2 below. What I want to highlight now is how Condeluci framed the current moment. Call it the fierce urgency of now.

I asked whether it was possible that three Republican senators might balk at a swift repeal with no replacement, torpedoing the chance of passing a repeal-and-delay bill via reconciliation now. Condeluci responded:
There's certainly concern about that. You've got some moderate members, Collins, McCain, maybe others, who might say, we want a replace proposal immediately. That's not practical because we're not going to have a replace proposal. It's gonna take a long time to put it together. Will they still say, well then, we won't vote for repeal? Maybe.

On the other side of the coin, let's say you put a transition period on the individual mandate[i.e., delay its repeal], or let's say you transition everything. Are your more conservative members like Senator Cruz or Senator Lee going to be like, "we wanna repeal this thing now and you're transitioning everything? That's not really repeal." You might lose them.
With respect to the impact constituents may have during the current break, Condeluci said:
Now [the period prior to Christmas] is when the detail work gets done. Let's say you get to a point where staff people say, this looks pretty good.  You have a transition period for the Medicaid expansion, the premium subsidies, and let's just say the individual mandate. and then everything else you repeal immediately. You're happy with that because the budget numbers work...

Well, then you take all that to the Members, and that won't happen until the members come back from holiday break.  And the members during holiday break are going to get crushed with all the campaigns that the ACA proponents are undertaking...they're gonna hear a lot from constituents back home . Is that going to change their position when come back into town on Jan 3? And then when they hear what is being proposed, the details of it, will the members still be on board? It's an open question.
In a followup conversation, Condeluci elaborated on the week ahead:
You can't underestimate what happens at home, and we already know that ACA proponents are spending millions of dollars on an ad campaign, House Democrats have suggested town halls and organized events opposing repeal. So members will hear from their constituents, The question is, what's the overall impact on those members once they come back in, and what's gonna be their reaction to the repeal-and-delay strategy that they have decided on?

And then when it comes to the details, members are going to have to decide whether they're okay with those details or not. If they are, they go forward and reconciliation happens by February. If they're not comfortable with those details then they have to go back to the drawing board and come up with different ideas, and that will just extend the timeline on enacting reconciliation.
So there you have it. Democrats have a week to stop the train. Am I exaggerating? Condeluci:
I don't want to overstate the impact that could be had over this next week and a half, but you can't underestimate the impact that could occur based on how proponents of the law are lining up and planning organized events and organized ad buys to formally oppose repeal. And if that doesn't have an impact, well then the timeline is the timeline that has been discussed previously, which is that it happens in February.
*          *         *

If ACA proponents cannot stop passage of a repeal-and-delay bill, their arguments may influence its shape. Fear of dis-insuring 20-plus million people, wholly or in part, quickly or slowly, could have a large impact on what parts of repeal get delayed, pending a replacement bill. Condeluci was emphatic that repeal of the Medicaid expansion will be delayed, as will repeal of enough components of the ACA marketplace to prevent its precipitate collapse. The main variables may be 1) whether repeal of any or all of the taxes that fund ACA benefits is delayed, easing the path to restoring or replacing them in a "replace" bill, and 2) whether the repeal bill includes some concrete "replace" elements, or a transition to them. Here's how Condeluci laid out the menu:
When it comes to developing the reconciliation legislation, there's a number of ways staff could go. They could repeal all of the spending provisions and tax provisions and attach a transition period to every single provision that they repeal.  They could do that.

Alternatively they could do exactly what they did in 2015 [the reconciliation bill vetoed by Obama] and only attach a transition period to the Medicaid expansion, subsidies and cost-sharing and that's it.

Alternatively, they could attach a transition period to the individual mandate repeal. And they could pass a continuous coverage rule alongside repeal of the individual mandate.

Alternatively, they could also repeal the premium tax subsidies but at the same time enact a fixed tax credit proposal that Republicans have discussed over the years.
The possibilities are bounded by two poles of political pressure. On the one hand, Condeluci said,  "I firmly believe there is no chance that the 20 million people who have coverage will lose it within two years, or three years [the period to be allotted for a replacement bill to be enacted]. They will be protected for sure."  On the other hand, "Politically, it's difficult to not repeal as much as you can immediately." That includes the taxes, which fall on the wealthiest Americans and various components of the healthcare industry, and the individual mandate, which has become the chief symbol for Republicans of intrusive, coercive Democratic governance.

Two interesting options Condeluci outlined attempt to thread the needle, or make a down payment on the kinds of changes Republicans have promised. Taken together they would, it seems to me, make the bill something of a hybrid, including important "replace" components in the repeal. The first is to replace the individual mandate, requiring people to obtain insurance or face a tax penalty, with a continuous coverage provision, which would protect people from paying more for health insurance base on their medical history and condition only if they maintain continuous coverage -- that is, buy obtain a new policy more or less right away when they drop or lose a prior one. The second "replace" component is to swap the ACA's income-based tax credits for the fixed credits various Republican plan outlines have proposed. These would vary only by age, since insurance is much more expensive for older buyers, and Republicans would allow insurers to widen "age-banding" beyond what the ACA allows.

Both of these elements could be enacted with a phase-in period, to avoid an immediate shock to the market, Condeluci suggested. And both may be vital to passing the kind of replacement Republicans profess to want.  Without legislating the fixed tax credit now, Condeluci said, Republicans "may never get Democrats to be supportive of a fixed tax credit that varies by age. And maybe Republicans know that a fixed credit is not going to be enough for a low income person. They know that at some point they're likely to put into law some kind of income-based subsidy for low income folks. Are they maybe going to hold that negotiating piece as a chip to get Democrats to the table and to agree on replace?

Condeluci, in other words, envisions an eventual hybrid in which low income people get income-based support to render coverage affordable, while the somewhat more affluent -- or maybe everyone who buys in the individual market -- get a fixed tax credit to defray some of the cost. That works for me -- I've suggested myself that Tom Price's proposed age-based credits could be a useful graft onto the ACA for the many subsidy-ineligible people who find coverage in the individual market unaffordable at present.

But Condeluci is of a moderate cast. He stands as a kind of reality principle for Republicans to warn them off dis-insuring millions. Today's Republican party, alas, is not much bounded by reality. Or at least, not by the reality of what's required to advance public health and welfare. As to political reality, they're doing pretty well making their own-- or riding the train of he who does.

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