Dem senator: Chances of keeping ObamaCare are "very good"

Does ObamaCare stand any chance of remaining in place? Even after his colleagues set the table for its repeal in an early-morning vote, Sen. Jeff Merkley tells CNN’s Chris Cuomo that there’s a “very good chance” ObamaCare will survive. The reason? Americans love its components, Merkley claims, leaving little choice but to stick with the system that’s, er, already collapsing in states like Minnesota.

Cuomo sounds a little skeptical, and he should be:

“I think we have a very good chance of keeping the [Affordable Care Act] in place,” he said on CNN’s “New Day” early Thursday. “The reason why is the basic elements.”

“Now this is what the Republicans are struggling with,” Merkley told host Chris Cuomo. “They’re at a loss with what to do.”

“They have set up this false story about a government takeover and it turns out that the actual elements one by one are quite popular with America.”

A “false” story about a government takeover? The individual mandate enforced by the IRS is not “fake,” although Merkley’s welcome to try that explanation when he files his own tax returns if he doesn’t have federally compliant health insurance. Oh, wait — he’s in Congress. Never mind. He doesn’t have to buy health insurance that meets the federal requirements for coverage, most of which younger Americans don’t need and won’t use, but have to buy in order to subsidize coverage for people like Merkley — older, wealthier, and on average more in need of access.

Are Republicans struggling to deal with keeping the components of the ACA that Americans do like? Perhaps. Ron Johnson told CNN earlier that the GOP hasn’t quite settled on a plan for replacement, but they’re getting close:

Merkley’s wrong, though, on the need to retain federal control over the entire marketplace in order to keep the most popular components — and Republicans should know that simply amending the ACA won’t work. The problems are that a couple of components rely on federal mandates and price controls that have to be in place for those components to work at all — and it’s precisely those price controls and mandates that are collapsing the system.  I wrote about this issue two months ago for The Fiscal Times:

Obamacare includes three mandates which form the heart of the program: an individual mandate for comprehensive policies (including specific coverage mandates), a mandate on insurers to sell policies to those with pre-existing conditions (guaranteed issue), and a community rating mandate which prevents insurers from putting the risk burden on those with pre-existing conditions. The latter only allows deviations from normal pricing on age, location, family size, and tobacco use, and places strict limits on price changes even on those factors.

This results in a severe distortion of the risk pool, one that forces everyone within it to bear the costs of that risk regardless of whether they contribute to the risk of excess utilization or not. Obamacare forces younger and healthier consumers to buy comprehensive insurance policies, which they will almost certainly never use, to fund that risk – essentially creating a wealth transfer from younger, healthier, and less wealthy consumers to those older, less healthy, and more wealthy. The failure to convince healthier consumers to absorb that risk has resulted in risk-pool distortions that necessitated massive increases in premiums and deductibles.

Those mechanisms can’t be “amended” out of Obamacare; they are Obamacare. The mandate for guaranteed issue and the way in which the federal government forces insurers to handle that risk cannot exist without the other mandates. Eliminate the individual mandate, and especially the limitation requiring comprehensive policies, and you eliminate the wealth transfer necessary to subsidize older and less healthy consumers.

It’s either all in or all out. The all-in option, ObamaCare, will collapse under its own weight in a very short period of time, so that’s not an option at all. The “very good chance” in this case is that Merkley’s still stuck in denial.