Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Health Insurance

Congress Achieves Bipartisan Failure on Obamacare

Your article was successfully shared with the contacts you provided.

For months, I’ve been watching in a sort of wonder as Republicans crafted the most unpopular major bill in living memory. Could they really mean to make a suicide charge at this — not some longstanding Republican goal, like dismantling the welfare state or slashing through the regulatory thicket, but pushing a sly parody of Obamacare even less likable than its awkward source material?

(Related: Cruz Pitches GOP Leaders to Allow Cheap Insurance in Health Bill)

When Republicans explained how this would actually be a strong campaign strategy for 2018, I had astonished flashbacks to Democrats saying the same thing in 2010… and wondered when it was that people in Washington started believing their own press releases. Were we really due for the Republican version of the 2010 Democratic lemming run?

No, apparently not. Sen. Mike Lee of Utah has always been the man to watch on this bill, the bellwether who was ultimately going to lead the Senate one way or the other. Yesterday, he announced that he would vote no on the Motion to Proceed, which translated from the original Parliamentarian, means that this bill is not going anywhere. Requiescat in Pace.

On both a political and a policy level, this choice is sensible, even though it leaves Republicans in a tough place. The exchanges in many states have been troubled for years, and those troubles will now deepen as insurers wonder what the heck Obamacare is going to look like in a year or two. The only saving grace for Republicans is that if and when those exchanges fall into a deep decline, they will still be able to assign some of the blame to Democrats for their original sin in passing Obamacare.

For those facing election in 2018, that is good news, I suppose. The bad news is that those exchanges are still in trouble, and Republicans are going to take a hefty share of the blame if something isn’t done about them. And Republicans are no closer to a consensus on what to do than they were six months ago.

This should also give pause to Democrats who want to cheer “Obamacare is saved!” Obamacare is now in worse shape than ever. And Obamacare was not exactly in good shape before. Obamacare was, in fact, wheezing and sweat-soaked every time it had to walk from the couch to the fridge.

Time has not been kind to its individual market provisions, and now even more regulatory uncertainty surrounds the program. While Republicans deserve some of the blame for this state of affairs, Democrats cannot evade a much fuller measure of responsibility, because most of the program’s problems are congenital, not lifestyle-induced.

Consider what would have happened if Democrats had followed the Republican Party’s sterling example of political expedience: They would have scaled back to a more modest ambition, probably a Medicaid expansion, while keeping their hands off the individual market. Since most of Obamacare’s coverage gains came from the Medicaid expansion, they could have gotten a substantial portion of the coverage gains that the law achieved.

Creepy surgeon (Image: Thinkstock)

(Image: Thinkstock)

More to the point, they wouldn’t have needed to touch most peoples’ insurance at all. Most people like their insurance (while thinking that the system as a whole is terrible). Messing with people’s insurance was what fed the ensuing political firestorm. That, a mostly avoidable conflagration ultimately ended up torching a number of careers, and the Democratic majorities, leaving the party unable to repair a jury-rigged bill that had never been strong enough to survive without substantial political support.

Legal challenges to a more modest bill probably would never have reached the Supreme Court level. So states would not have had the option of declining the Medicaid expansion, an option given to them by a Supreme Court looking for a compromise on the controversial NFIB v. Sebelius case, one that would loosen the law’s strictures without striking down decades worth of Commerce Clause jurisprudence. So all 50 states would probably have expanded their Medicaid programs, thereby not only providing more coverage, but also making even Republican senators reluctant to touch a program that was providing their states with a lot of money.

Instead Democrats fixated on “fixing” the individual market, and passed a draft bill never meant for prime time. In doing so, they broke both that market, and their own party’s majority. The survival of their jury-rigged “temporary” solution in the face of the Better Care Reconciliation Act is not much reason to cheer; the program is still on life support, and there is no doctor in the house. Or in the Senate, either.

Both parties are therefore deeply responsible for the mess we are now in. At this moment, however, neither party looks likely to take responsibility for its own failures, much less for fixing the problem. Which leaves the rest of us wondering what the heck is going to happen to the health care market.

The late economist Herbert Stein once observed that “If something cannot go on forever, it will stop.” That is as true of Obamacare as everything else. Eventually, if Obamacare’s problems get bad enough, something will have to be done, and something will be, as frightened politicians survey the smoking rubble of the individual market and the fleeing voters headed straight for the ballot box.

But as Rudi Dornbusch, another late economist, observed, “In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.” That they stop eventually, we know. But not where they will eventually come to rest, or who they might run over en route.

— Read 3 Ways an ACA Lifeboat Form Is Spamming the CEOs  on ThinkAdvisor.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.