The Future of Obamacare

changeahead1-copyTrump’s cabinet choices make it clear that he really does mean to drive a stake through Obamacare. In particular, his choice of Rep. Tom Price to head Health and Human Services puts one of the foremost critics of Obamacare at the helm of its management. But – cliché alert – the devil is in the details. Republicans in Congress can effectively repeal it through a reconciliation process, which requires only a bare majority in each house. (See the postscript below for details.) They have only a two seat margin in the Senate, so caucus discipline must prevail if this is to work. But it seems unlikely that they would wound their new President by resisting. However there is a nuance. This cannot be done quickly. A reconciliation process can only be associated with a budget bill, so this stratagem must await development of a suitable budget. That will take months in the new Congress.

Replacing Obamacare with a plan more to conservative tastes is an entirely different story. This must go through the normal legislative process and would be subject to a likely filibuster in the Senate. However Trump has pledged that there will be no interim period where 20 million people have no alternative for medical insurance. The Senate could of course invoke the nuclear option and change their rules to forbid a filibuster. But that is a slippery slope that Senators would be loathe to risk. So what’s the plan?

Here’s what I hear. When they repeal Obamacare, they will delay its demise for enough time – they hope – to produce a replacement. This will probably push actual termination well into the future. The Republicans believe that given the choice of no plan or one that they don’t much like, Democrats in Congress will cave. But Chuck Schumer, the new Senate Minority Leader, begs to differ. He says he won’t budge on anything that Democrats consider to be minimum health coverage. Sticking points will likely be contraceptive coverage, federal subsidies, expanded Medicaid and the issue of pre-existing conditions, at the very least. And he evidently believes that Republicans will flinch before tossing all those millions over the cliff.

So, we are heading toward a colossal climax that will make our periodic budget battles look like child’s play. I hesitate to predict the outcome given my prognostication record during the election but, never daunted, here I bravely go.

Trump can’t give in on his first big policy fight or else his Presidency is toast. But Democrats desperately need a banner to wave in 2020 so they could be willing to sacrifice some people now for what they see as the greater long-term good. I predict that there will be no replacement at all and we will simply return to the situation before Obamacare was created. Eventually, of course, we will come up with some sort of solution to our nation’s healthcare crisis, but not now and not soon.

obamacare-cartoon-5I am not predicting this because that is my wish, but I am not so sure that it is actually a bad outcome. Obamacare is actuarially unsound and it is headed toward a catastrophic collapse in any case. Moreover, the number cited of those at risk, 20 million, is basically a lie. Many of those “benefiting” from Obamacare essentially have fake policies. If you have a massive deductible, as much as $14,300 for a family under the Bronze plan in 2017 for example, what use is this other than as disaster insurance? It should reduce the number of medically-induced bankruptcies, but for customary medical insurance it is close to useless. For the vast majority their premiums simply lower their standard of living. True, there are subsidies available under certain conditions that mitigate this problem, but they don’t eliminate it. If you live paycheck-to-paycheck, as even many relatively well-off families do, paying thousands of dollars out-of-pocket before insurance kicks in is out of the question.

The bottom line is that we will eventually, and for many conservatives reluctantly, acknowledge that a public, single-payer plan is the only workable solution. Most advanced societies have already reached that conclusion and predicted disasters have not occurred. So I finish my foolhardy prediction by saying that the eventual resolution will be something like Medicare for all. In the meantime, expect some pain and conflict.

[POSTSCRIPT] One of my smart followers has pointed out that the reconciliation process cannot achieve full repeal of Obamacare. That is correct. All that is possible is to delete those sections of the law related to taxes and spending. This would include subsidies to buy health insurance, tax credits, the full expansion of Medicaid and penalties for not having insurance (considered taxes by the Roberts Court). This guts the law and makes it even more obviously a financial disaster. True, provisions that allow children to remain on their parents’ plan until age 26 and the popular protection against refusal due to pre-existing conditions remain intact. Actually, Trump has already said he likes those provisions. But this will remove even the currently flimsy financial props of Obamacare, leaving at best a zombie law. Costs would be prohibitive and few insurance companies would even bother to participate.