GOPCare — The Republican vacuum as the Supreme Court prepares to rule.
June 19, 2012 Leave a comment
· Updated June 15, 2012, 7:38 p.m. ET
The Republican vacuum as the Supreme Court prepares to rule.
No one knows how the Supreme Court will come down in its decision on ObamaCare, expected in a little over a week. No one knows how President Obama will respond if the court overturns some or all of the law, though we have a pretty good idea. And no one knows how the Republicans will respond either, including the Republicans.
In short, the GOP may be positioning itself to become the dog that caught the car. Political and policy uncertainty is perhaps inevitable given the range of what the Court could do. But the Republicans need a more coherent strategy, and more credible alternatives, to avoid reprising the payroll tax holiday debacle of last Christmas, except with generational consequences.
Republicans are down the line opposed to the individual mandate, but there’s an internal debate about what to do if the Court also overturns the main insurance regulations. A sizable cargo cult within the GOP wants to preserve some Affordable Care Act provisions and favors passing stand-alone bills reinstating them if necessary. The idea circulating is that the Republican Party should consider a "keep the good stuff" approach.
In other words, one of the first Republican moves amid an historic constitutional ruling and thunderclap political victory would be the remarkable feat of protecting the entitlement they’ve now spent years castigating and promising to repeal in toto. Concessions on this scale make zero political sense—never mind the economics, which are much worse.
The supposedly popular planks are mandates requiring insurers to cover people with pre-existing conditions at below-market prices and allowing parents to keep their adult children on their health plans until age 26. The third is closing the Medicare drug benefit "donut hole," which asks seniors to contribute to their prescriptions above a certain level (with protections for catastrophic costs).
So despite claiming that more consumer cost-sharing will promote health-care cost containment—for instance by choosing generics over name brands to avoid running over the donut hole limit—the GOP would gut it in Medicare. Tiered formularies and copay scales are routine in the private sector.
Despite claiming that government mandates distort markets and drive up the cost of insurance, the GOP would resurrect the under-26 mandate. This was part of the party’s official "alternative" to ObamaCare in 2009 and some Members want to lift it to age 31—honestly. So Mark Zuckerberg would be eligible for "free" dependent coverage. Because young people have lower health costs, the mandate’s effects on premiums aren’t particularly large, estimates range from 1% to 3%, but the precedent is awful.
Pre-existing conditions are tougher, because the problem while minor is genuine. If Republicans had any wit they’d consult the innovative work of the scholars Tom Miller and Jim Capretta on continuous insurance coverage and "guaranteed renewability" while still allowing insurers to price risk. Instead many of them want to maintain ObamaCare’s blanket pre-existing conditions rules, which is insane. That’s the reason Democrats cooked up the individual mandate in the first place, to help mitigate the cost spiral that these rules cause.
If the Court strikes down the individual mandate only, President Obama may express his disappointment and continue full steam ahead. He’s likely to blame Republicans and the insurance industry for the inevitable market turmoil. The individual mandate is enormously important Constitution-wise, but as a policy matter the subsidies are ObamaCare’s real central nervous system and they’ll still flow unless Congress stops them.
If the Court deletes the insurance rules and other provisions but leaves the subsidies intact, liberals will also claim the plan is still feasible and then pocket any compromises Republicans are prepared to make. Thus the plan’s putative opponents may end up ratifying a deeply unpopular plan in the name of "popular" coverage mandates.
The larger problem is that despite two years of incanting "repeal and replace," Republicans still haven’t formed an intellectual let alone popular consensus for the "replace" part. There’s no private insurance market analogue to Paul Ryan’s premium support reform for Medicare.
One thing that comes up again and again in conversations with Republicans is that they favor smaller incremental reforms that do some modest good and avoid the liberal mistake of overhauling the entire system. That’s fine as far as it goes, though the pre-existing dysfunctions that antedate ObamaCare require an Actually Affordable Care Act that increases competition and health-care choice. Something more than, say, tort reform.
Over the short term, however the Court rules—including upholding the law—Republicans ought to capitalize on the growing recognition that the bill as written is simply unworkable in practice. The Administration has missed nearly half of its statutory deadlines and talk of a one-year delay is rising within the health-care industry and even among pragmatic liberals.
An orderly unwinding of ObamaCare was always going to be difficult. But based on its disarray and confusion so far, the GOP may be making it harder.
A version of this article appeared June 16, 2012, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: GOPCare.