A recommendation by Voltaire to House Republicans in crafting an Obamacare repeal and replace: Don’t let perfect be the enemy of the good.
Republicans need a win — they need to prove to their constituency, as well as to the Democrats, that they can indeed govern. For way too long, GOP leaders have told us they’ll repeal Obamacare if we give them the House, then the Senate, then they needed the White House. We’ve delivered. Can they?
House Speaker Paul Ryan’s repeal bill is messy — much like the health care system today. Much has evolved since 2009 when then President Barack Obama signed into law his signature health care bill. Unfortunately we can’t go back in time, and a bill that addresses the current marketplace — with its entrenched entitlements — is the only way to do so.
A full repeal in today’s marketplace — like many in the House Freedom Caucus are advocating for — would mean devastation to many in Middle America who would lose their insurance. Indeed, revisions to the current bill had to be made after the CBO score predicted higher premiums for older, rural Americans.
From Bloomberg’s Megan McArdle:
“According to the CBO, under Obamacare, a 64-year-old making 450 percent of the federal poverty line, or about $53,000 a year, can expect to pay $15,300 a year for a plan that covers 65% of their expected medical expenses. … While the 64-year-old in the above example actually benefits slightly from the Republican health care law, seeing their premiums drop by $700, their twin brother making 175 percent of the federal poverty line, around $20,000, will see their premiums rise from $1,700 to $14,600 — an amount that would be pretty much mathematically impossible for them to pay. Indeed, as you get nearer to the poverty line, it is theoretically possible for a 64-year-old to face premiums that actually exceed their income.”
On Tuesday, amendments were made to the bill that would allow the Senate to increase the value of tax credits for people age 50 to 64. Yes, some in the GOP feel this is replacing one entitlement with another. On the other hand, how would Republicans explain to the older, poor-but-not-so-poor voter in Middle America who put Donald Trump’s presidency over the top, that they will be losing their insurance? It’s a political loser.
To help conservative members swallow this, states were given more flexibility over managing their Medicaid programs, so they could search for inefficiencies. Work requirements can now be affixed to the entitlement, and block grants given. With this formula, the CBO predicts Medicaid will be 25 percent smaller by 2026 than if we were to remain with the status quo.
No, the bill isn’t perfect. None are. But if passed, it would represent the largest government reform in three decades. It would cut government spending on net by $1.22 trillion and gets rid of $883 billion in new taxes through 2026, while reducing the deficit by $337 billion.
Obamacare was written with the purpose of it being hard to extract once implemented. The GOP’s bill represents its best chance to start to peel those layers away, and rein in a runaway government. Once done, tweaks can be made, and further rollback can continue. But perhaps most importantly, the GOP can move onto tax reform, the essential ingredient in getting this economy humming again.