Monday, January 02, 2017

How Democrats might lose the ACA insta-repeal battle and win the war

In the interview I posted last week with Chris Condeluci, who was counsel to Republicans on the Senate Finance Committee when the ACA was being drafted,  I foregrounded the most urgent point at present: ACA proponents have a very short window to deter lightning passage of a repeal-and-delay bill, and at least a handful of Republican senators may be responsive to pressure and balk at repeal with no replacement. Three defections would kill insta-repeal, if Democrats hold together.

I think this possibility has been underplayed. 21 Republican senators are in states that have enacted the Medicaid expansion, and many of those states have slashed their uninsurance rates by 40% or more.

Still, odds are probably that Republicans will go through with a repeal-and-delay, in which they preserve the ACA Medicaid expansion and marketplace subsidies for at least 2-3 years while they allegedly craft a replacement plan.

If that's the case, there's still a high-stakes battle to be fought. Its outline can be discerned in the detailed options menu Condeluci laid out for Republicans (or their aides) racing to draft a repeal bill. Since that interesting material was buried rather deep in the prior post, I've reposted it below.

The sticking point (to my mind) is whether repeal of the taxes that largely fund ACA benefits is delayed along with repeal of the benefits. If not, the Medicaid expansion is probably dead, along with marketplace subsidies that make coverage affordable for lower-income buyers. The negotiations with Democrats over a replacement bill that Condeluci envisions are really only possible if substantial tax revenue is still coming in.

Today Jonathan Chait suggests, not for the first time, that Republicans will "repeal" the ACA by putting it in perpetual purgatory, renewing it at intervals. That also is only possible if the funding remains in purgatory with the benefits.

Without further ado, here again is Part II of the prior post, in which Condeluci lays out repeal-and-delay options.
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Condeluci:
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.

Related
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2 comments:

  1. This cry of "repeal & replace", with the emphais on "replace", is a bit much to expect from the GOP. If they had extended any effort toward healthcare for all at any point in the past 30-40 years, maybe we could have faith. As it stands, they've only been interested in reducing taxes and letting the free market be our guide.

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  2. The GOP can't keep their promises to the rich people who write checks to them if they don't repeal the taxes. That wealth tax on the 1% has been making those folks spit bullets for years.

    I'm not sure how they reconcile the two issues. You can't "delay" and not throw millions off insurance without revenue for the expansion and the subsidies.

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