Say ... where's the Democratic plan to fix ObamaCare, anyway?

Remember “mend it, don’t end it”? Democrats have floated that slogan for three years while trying to convince voters that their unhappiness with ObamaCare doesn’t mean throwing it out entirely. A year ago, Chelsea Clinton argued that the “crushing costs” of the ACA needed immediate attention, but not repeal. Even Barack Obama went on the road in October to champion some “tweaks” to ObamaCare after skyrocketing premiums made it even less popular than usual right before the election.

Now with Republicans gathering their forces to “end it,” shouldn’t Democrats go public with their plan to “mend it”? At Roll Call, Jonathan Allen wonders when the Democratic master plan to make ObamaCare work will emerge:

Democrats are in lockstep against Ryan’s bill. Several Republican senators have criticized the bill’s treatment of Medicaid. And members of the House Freedom Caucus, backed by conservative Sens. Ted Cruz of Texas, Rand Paul of Kentucky and Mike Lee of Utah, have said that it doesn’t keep faith with the GOP’s promise to unravel Obamacare. Outside groups from The Heritage Foundation to the Tea Party Patriots agree with them.

With Republicans predictably divided over their effort to do something anathema to the party — write legislation providing for a major entitlement program — Democrats should step in and do it for them.

By providing a serious alternative, Democrats could give Trump the choice of moving toward them for a deal or sticking with a foundering Republican plan. If he chooses the former path and it works, Democrats will get credit for working with the president and Trump will get his repeal-and-replace law. If he stays in a partisan corner, he’ll end up with either nothing or a law that takes benefits away from Americans who voted for him. …

The safest path is for Democrats to sit back with popcorn and watch this campy horror film play out, knowing that Trump and Republicans will be blamed no matter what. But if they truly care about preventing regular folks from taking a devastating hit — and the richest Americans from consolidating wealth at the expense of the poor — they’ll offer a serious substitute bill that addresses the shortcomings of Obamacare.

All of that may be true, but it doesn’t explain why Democrats didn’t try fixing it before now on their own. In 2014, Democrats still had a majority in the Senate and control of the White House, and yet neither entity pushed a bill to fix ObamaCare’s obvious shortcomings when they still had some leverage to force the issue. Nancy Pelosi declared at the time that her fix would be a single-payer system, strongly suggesting that even Democrats saw ObamaCare as unfixable and unworkable. And in the following two years, even as the Clintons all agreed that ObamaCare was crazy and costly and Obama talked about “tweaks,” no Democrats stepped forward with a plan at all.

The conclusion that Allen avoids isn’t that Democrats could box Trump in with a serious alternative. It’s that no serious alternative exists that fixes the problems within the ObamaCare architecture, and that’s because the ObamaCare architecture is what’s causing the systemic problems. The combination of mandates, taxes, and subsidies is a stew of contradictions whose inherent failures have matured even faster than its critics predicted. Any fixes (or “tweaks”) they could suggest that would have an impact on the coming collapse would make that very clear, and expose their years-long effort as a failure. Bernie Sanders at least ran honestly on that point, even if his proposal of “Medicare for all” was even more insane than ObamaCare.

On the other hand, former CBO director Douglas Holtz-Eakin writes in the Washington Post that the Republican AHCA is a good first step toward fixing those problems:

Given these circumstances, any bill designed to achieve 218 votes in the House and 51 votes in the Senate is going to generate some dissatisfaction for all involved. Nevertheless, the bill is an important step away from the ACA and a clear step forward on health-care policy.

Some broad themes are clear. The ACA was a one-size-fits-all, top-down approach to policymaking. In contrast, the AHCA moves decision-making to the grass roots by providing funding, but permitting states flexibility in how to deal with costly preexisting conditions, provide reinsurance and other stop-loss protections that permit insurers to function effectively, and trusting state insurance regulators to run their markets. Even the significant Medicaid reform needed to ensure the program’s long-term sustainability carries enormous freedom for states to tailor their programs to their populations. …

Other differences between the two proposals will also influence the final budgetary impact of the legislation, but the most significant factor will be the total savings from AHCA’s Medicaid reforms. H&E expected Medicaid changes in A Better Way — which are largely repeated in the AHCA — to save $636 billion. Ultimately, the total savings obtained from the proposal’s Medicaid reforms will likely determine its effect on federal spending.

A final consideration is that the reconciliation legislation is only one part of the replacement process. There will also necessarily be a host of rulemaking and administrative guidance forthcoming from the Trump administration. And additional legislative fixes and changes to the health-care system that can’t be undertaken through reconciliation are already underway. But the bottom line is simple: Early criticism notwithstanding, the AHCA is a good start to reform the federal government’s role in the health sector.

Philip Klein isn’t convinced. He agrees that this may be a first step, but it’s not a conservative first step:

If Republicans were to have pushed a true free market plan, it would have removed the regulations and mandates on the type of insurance that must be sold and drastically reduced spending through Obamacare. By reforming the tax code, it could have used money from changing the bias in favor of employer-based coverage to help individuals purchase coverage in an open market. To be sure, under this scenario, Republicans would still be fighting off attacks that their plan covers fewer individuals than Obamacare. But they’d also be able to credibly argue that their plan reduces premiums, increases choices, reduces spending, and cuts deficits. This would all fit into the narrative that they’ve been trying to push for months: Obamacare was an unsustainable promise, they inherited a mess, and they had to act responsibly to clean it up.

If Ryan wants to limit his argument to insisting that this is the best Republicans can come up with given the fragile Senate majority and the complicated parliamentary maneuvering required to secure passage, it would still be a faulty argument, but at least it would be within the realm of debatable. But calling this federal healthcare scheme “conservative” just because Republicans were the ones to concoct it is a farce.

Some of that will come at later stages, or at least that’s what Ryan is promising. As I wrote yesterday at The Fiscal Times, Republicans are stuck between reconciliation and campaign promises from Donald Trump and other Republicans:

One challenge facing Republican leadership is the reconciliation process in the Senate. Harry Reid famously used that budgetary exception to pass Obamacare on a majority vote, eliminating the use of the filibuster. However, only legislation with a specific impact on the federal budget can cite reconciliation to avoid the filibuster. That limits what the repeal bill can do and still be passed on a majority vote. The AHCA necessarily only addresses those portions which qualify under Senate rules.

The next complicating factor is Donald Trump’s promise to ensure that Americans don’t get abandoned in the process. That’s almost certainly why the AHCA does not eliminate the Medicaid expansion immediately, as House conservatives had hoped, and why this plan continues the practice of subsidies for health-insurance purchases. The need to extend both of those for the next few years stems from the difficulty of getting a full replacement program through the Senate; Republicans clearly hope to have a filibuster-proof majority after the 2018 midterms, but need to leave some measures in place before then.

They’d better be prepared to deliver on a conservative, free-market system in the end, though:

To get conservatives and moderates on board, Trump and the rest of the Republican leadership will need to commit to a free-market end solution when they have more political weight to replace the rest of the ACA while pointing to these efforts as just a transitional effort that protects voters in the meantime. If this really does represent the end game of the Obamacare repeal and replace effort, though, then not even Trump’s Art of the Deal prowess can salvage this sale.

Right now, the choices appear to be a default slide into a single-payer system as ObamaCare collapses or at least a first step away from it. The AHCA may not be a great option, but it’s better than the alternative, and possibly the only start Republicans can get through Congress under present circumstances.

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