New in National Review: “A Blueprint for Repealing and Replacing Obamacare with Bipartisan Support”

November 11th, 2016

Passing Obamacare on a straight party-line vote was a mistake. Repealing it on a straight party-line vote would be an even bigger mistake. Republicans should not repeat the Democrats’ naïve and arrogant blunder from eight years ago. Swapping Obamacare for Trumpcare would simply flip the politics: Half the country would support it, and the other half would hate it. For health-care reform to be successful beyond 2020, it must be bipartisan.

In a new piece in National Review, I provide a blueprint of how the ACA can be repealed with support from both sides of the aisle.

It was hubristic of President Obama to think that after enacting a monumental law, without any bipartisan buy-in, opponents would simply fall in line. As history played out, Republicans had no problem undermining a law they had no part in enacting and felt no attachment to. Senator Max Baucus, chairman of the Finance Committee that drafted the health-care bill, “fret[ted]” about the ACA’s origin. “It is my belief,” he said in December 2013, “that for major legislation to be durable, sustainable, it has to be bipartisan. I mean, one party can’t jam legislation down the other party’s throat. It leaves a bitter taste.” Baucus was right.

Republicans have floated the budget-reconciliation process as a means to repeal Obamacare with 51 votes, but the problem is that it would not rescind all aspects of the law:

However, as Avik Roy writes at Forbes, it can’t eliminate everything. “The partial repeal bill does not get rid of Obamacare’s tens of thousands of pages of insurance regulations,” Roy explains, as well as “the regulations that are responsible for the law’s drastic premium hikes.” If Republicans choose the reconciliation path, as some members are already considering, we would be stuck with Obamacare’s hollow shell. Gutting the subsidies, without eliminating the regulations that make insurance expensive, would be counterproductive: Premiums would continue to increase, and people would be unable to purchase policies. Even worse, it would permanently poison the well for prospects of future reform. That “bitter taste” Senator Baucus spoke of would linger in perpetuity.

A better way is to gin up some leverage: eliminate the illegal executive action that provides special subsidies to members of Congress.

In September 2009, when the ACA was being drafted, Senator Chuck Grassley of Iowa proposed an amendment requiring members of Congress and their staff to use the newly created Obamacare exchanges. “The more that Congress experiences the laws we pass,” Grassley said, “the better the laws are likely to be.”  The veteran fiscal hawk added, “My interest in having Members of Congress participate in the exchange is consistent with my long-held view that Congress should live under the same laws it passes for the rest of the country.” The amendment, which was merged into the final Senate bill, provided that the federal government could offer members of Congress and their staff only health-insurance plans that were “created under” the ACA, or “through an Exchange established under” the new law.

As a result of Grassley’s amendment, members of Congress and their staffers, unlike all other federal workers, would no longer be eligible for the generous Federal Employees Health Benefits Plan (FEHBP). Under FEHBP, the government pays approximately 75 percent of an employee’s annual premium. This annual tax-free contribution of between $5,000 and $2,000 was far more generous than the income-adjusted subsidies available on Indeed, many well-compensated congressional employees—starting with a family of four that earns more than $100,000 a year — would be ineligible for any subsidies on the exchange. Under Grassley’s plan, they would now be put in the same position as other Americans who had to pay the full cost of their insurance, without any governmental assistance.

This amendment was quite unpopular, so as has become routine, President Obama engaged in an illegal executive action to provide the exact same level of employer-contributions to the plan:

Where Congress would not act, President Obama did so unilaterally. The Office of Personnel Management (OPM) announced that members of Congress and their staff would be able to purchase health insurance on the District of Columbia’s Small Business Health Options Program, known as the D.C. SHOP exchange. The ACA authorized these new SHOP exchanges to offer a health-insurance marketplace for workers at small businesses with fewer than 50 employees. At President Obama’s direction, OPM determined that after a congressional employee enrolled on the District of Columbia’s SHOP Exchange, the government could then provide the same 75 percent contribution that was offered under the FEHBP. Thus, there would be no meaningful disruption in benefits for Hill staffers. This is a benefit that no one else on the SHOP exchange would be eligible for. Notwithstanding the Grassley amendment, which expressly sought to put congressional employees on the same footing as all other Americans on the exchanges, now congressional employees would be in the exact same position as they were before the enactment of the ACA. The OPM fix was a blatantly illegal effort to bypass an unpopular law.

Senator Johnson of Wisconsin filed a challenge to the payments, but the case was tossed on standing grounds. But this doesn’t stop the new President from rescinding this policy.

With the stroke of a pen, President Trump can direct his Secretary of the Office of Personnel Management to rescind the old policy: Eliminate all special subsidies for members of Congress and their staff, and force them to buy insurance on like all other Americans. But this deal would not be so simple.

But rather than eliminating the illegal payments right away, they can be used as leverage.

The subsidies should not be eliminated right away. Rather, the administration can use the largesse as leverage. Here’s the pitch to Democrats: Negotiate on a bipartisan ACA compromise, or else your staffers will have to go onto the ACA. If a deal is not reached by some specific date, then the subsidies are cut off. This cudgel will hit close to home, and bring Democrats from across the spectrum to the bargaining table, at the risk of a mass exodus of staffers. I seriously doubt the American people would shed tears for the plight of well-compensated government employees who are receiving generous and illegal health-insurance benefits. The optics here inure to President Trump’s benefit.

A colleague on Twitter described it as something of Russian Roulette–indeed!

Once at the table, there would have to be serious discussions of a bipartisan reform. Again, if Republicans unilaterally advance their wish list of repealing Obamacare without any Democrat buy-in, health-care reform will remain mired in partisan politics. Majority Leader McConnell seemed to acknowledge this dynamic after the election. “We have been given a temporary lease on power, if you will,” he said, and the Senate must “use it responsibly.” The Capitol Hill veteran added, “I think what the American people are looking for is results. And to get results in the Senate, as all of you know, it requires some Democratic participation and cooperation.” If there is any hope to create a sustainable alternative to the ACA, compromises must be made — and it will likely take more than 100 days to unravel a law that has been in effect for nearly 100 months. This blueprint, at a minimum, suggests how to start the art of this deal.

This is but one plan to force Democrats to negotiate. If Obamacare is repealed with 51 Republican votes in the Senate, the situation will remain untenable.